There are also new entrants that facilitate lending among peers – termed, social lending, that is more community based lending than anything. Based in part off the old and forgotten credo of credit unions where the community supported each other by pooling excess cash from some members and lending it others in need. The real key here is that loan decisions are not based on some far away executed formula but by actual communication between borrower and lenders.
There are also new entrants that look at lending as 소액결제현금화 more of an investment in companies than actual loans – thus they do not require elements like time in business, profitability or collateral. They are more interested in accessing the business’s ability to generate cash flow from the loan proceeds. Not only are there non-bank lenders applying these new techniques but many private equity companies are entering this arena. However, these players are taking it even one step further by approving entire loan requests, but tranching the funds at intervals that are conducive with business growth and development – called milestones.
This type of thinking has also benefited Micro Lenders, who have some of the lowest levels of default in the industry. While Micro Lenders may be able to lend much more than they do on average, there success stems from helping business owners build solid track records while providing them needed capital. Many Micro Lenders usually only approve amounts smaller than those requested in the beginning. But, as the borrower moves forward demonstrating their ability to service that loan amount, the Micro Lender then encourages the business to come back for more capital at larger amounts (even if the original loan is not yet paid off) – it is essentially similar to teaching a infant how to walk by making them craw first.
Lastly, there is the community bank model. While much of the community bank’s underwriting is based on current practices, community banks are the only real shinning example of traditional lending still working. The reason is that these organizations underwrite requests not only by solid lending standards but also via relationships – relationships with the borrower, with the community or neighborhood, with the local business climate as well as with local knowledge of assets used as security. Thus, allowing these lenders to approve loans to businesses that other regional or national banks would run away from.
While many of these new business loan models are still relatively young and have not yet strayed very far from traditional underwriting methods, they are making improvement in the industry; an industry that may take centuries to evolve. But, one never knows how quickly new, disruptive, entrepreneurial companies can impose changes on industry participants that are blinded by the status quo.