The FinTech ecosystem is a financial evolution in itself. Right from money transfers to personal loans, from account management to asset management, FinTech is rapidly making its way into the lives of the tech-savvy microentrepreneurs of today. Just a few years ago, the only way to start a business was to approach a bank or an investor for financial assistance. Thanks to FinTech, the micro or small businesses now can choose to no longer go through the conventional methods to get microloans for starting, running or scaling up their businesses. FinTech companies with their range of financial products are offering easy and affordable options to them. Let’s delve deeper into how FinTech is all set to change the world of small business owners.
3 Ways FinTech is Boosting the Growth of Small Businesses
1. Digital Lending
Microbusinesses need microloans to either start, run or scale up their business. If you are an entrepreneur, you have probably experienced the difficulty in dealing with traditional financial institutions for getting a personal loan for businessmen.
Micro and small businesses have always played an important role in the economy. Ironically, traditional financial institutions are not very big on lending to them because the amounts they require are small and their activities are inconsistent.
Additionally, the conventional loan application process requires an endless list of documentation with high turnaround time, plus numerous visits to the bank. The advances in technology have potentially put an end to the monopoly these banks have enjoyed since time immemorial.
FinTech is helping businesses of all sizes by bridging the gap between the banks and the businesses with technology. Fintech innovations have eliminated inconveniences by making the lending process a lot easier. The personal loan process is online, instant, paperless, and convenient.
2. Track Expenses and Monitor Cash Flow
To thrive and succeed in business, small business owners must be able to draw their salaries and also keep a check on their expenses. Therefore, it is essential for them to have an accounting system in place that monitors their cash flow in real time to ensure that their business is running smoothly. Quite a few FinTech companies have introduced expenses and invoices apps for small businesses. These apps are free, and you don’t need to have advanced IT skills and accounting knowledge to use these apps.
3. Business Beyond Boundaries
Before FinTech came in existence, accepting overseas payments were costly for small businesses as credit companies charged a huge amount of fee. There was a huge cost associated with money transfers across borders too. FinTech has changed all of that. Accepting overseas payment and transferring money overseas have become cheap and easy. Thus, increasing the ease of doing business overseas.
The bottom line…
FinTech has opened a whole new world of opportunities for small businesses. They can now offer more and better services at a reduced price. But, if you want to not only sustain but succeed in your business, it is important that you embrace technology and stay up to date with the latest FinTech developments.