January 30, 2019

How Innovations in Payment Apps Can Impact Alternative Lenders’ Approval Rates for SMBs


Small businesses can often find themselves in a catch-22 situation where the very reason they apply for a loan could be the reason they’re not approved. As an example, many businesses apply for loans to improve their cash flow but their poor cash flow could, in fact, get them rejected. According to the Biz2Credit Small Business Lending Index, from November 2018, banks rejected 73.1% of small-business loan applications and alternative lenders rejected 43.3% of SMBs that applied. In my experience of working in the lending industry, the most common reasons for rejection include low cash flow, insufficient time in business, bad credit score, minimal assets, low monthly revenue, and, sometimes, application errors. Sadly, as I’ve seen time and time again, these criteria for rejection don’t reflect the true financial state of a business. An SMB could *appear *to have bad cash flow or asset limitations but really this is because…

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