Mobile Small Business Loan Applications Jump; Entrepreneurs Apply Outside Typical Banking Hours
Improvements in technology enabled banks to offer retail customers quick access to check account balances, pay bills and transfer funds between accounts. Eventually, banks and other lenders developed applications for business, and entrepreneurs increasingly looked to conduct transactions and secure funding via online platforms rather than in person at bank branches.
The prevalence of smartphones and tablets has further -- and quite dramatically -- impacted business financing. Borrowers are becoming more reliant on mobile devices and round-the-clock ability to submit requests for small business loans, according to a 12-month analysis of transactions between October 2015 and September 2016.
More than half of small business loan applications came via mobile devices (55.8 percent) in September 2016. In comparison, less than 40 percent of entrepreneurs were applying for funding via mobile device a year earlier. This seismic shift is a result of increased demand consistent with the mobile-first customer experience that financial companies are offering.
Quite often, small business owners conducting transactions outside of traditional business hours. During weekdays, 40 percent of small business credit applications online take place outside regular business hours of 9:00 a.m. and 5:00 p.m. About 16 percent occur during night hours after 9:00 p.m. and before 5:00 a.m.
Further, more than 20% of all small business credit applications occur during the weekend. Monday and Tuesday were the days during which the most credit applications were made. The first two days of the week accounted for one-third of all credit applications.
Financial institutions are now adapting to the marketplace. Millennials have grown up with the ability to do just about anything on their phones, including conducting business transactions. They've helped to spur the technological advances that have brought efficiency to the small business lending marketplace. They are very adroit in the use of smartphones and tablets.
Advancements in technology are making it much more convenient for consumers to apply for loans with tools at their fingertips. It is less intimidating for borrowers to request funding virtually, and they are becoming more trusting in engaging in loan applications on their mobile devices. They do not have to go into the bank, which can be intimidating for minorities, immigrants, and first-time borrowers. The evolution of technology has simplified the loan application process and small business owners, often strapped for time, are finding this method more useful.
When businesses in the US, quickly needed an infusion of capital, he started working the phone -- not making phone calls, but inputting a digital loan application via Pelican Capital's mobile application platform. He was approved in December 2016 for a $130,000 business loan less than a week after submitting his documents.