Welcome to 2018–a year full of new opportunities. Have you had time yet to assess your business’ performance and explore new industry trends? Staying up-to-date can help you remain competitive and ensure your clients come back for more.
From a business lending perspective, we anticipate several trends to take off this year: diversification of brokers’ product portfolios, new and faster technology innovations and, at the same time, the growing importance of human interaction and interpersonal relationships.
Brokers will diversify their offering…
Financial intermediaries work in a fast-paced and ever-changing environment–gone are the days where it was sufficient to offer only one service or product. Businesses nowadays expect their brokers to help them with all sorts of financing needs. As a result, many brokers have started to diversify with new financing options which, traditionally, weren’t part of their product portfolio.
For example, many asset-based lenders have started offering unsecured loans either as a stand-alone product, or in combination with a secured option. With a fully unsecured loan, businesses don’t need to provide a security and–more importantly–no personal or director’s guarantee.
Many businesses ask for a fully unsecured loan to comply with short term business needs, such as buying new stock, bridging a cash flow gap or upgrading business technology. SMEs can apply for a short-term fully unsecured loan, even if it already has a longer-term secured loan in place. This is possible because there are no asset claims and the loan is complimentary, giving the business more flexibility.
Another way brokers can add value is by re-evaluating their clients’ loan portfolio on a regular basis. This way, they can ensure that existing loans are still offering the best market rates and if not, suggest relevant re-financing options. This can save SMEs valuable money and position the broker as a trusted partner, with the client being more likely to return to the broker with new business opportunities.
…and technology will further automate manual tasks…
Technology innovations have helped automate certain manual and more laborious tasks over the last years. This has freed up valuable time, made employees more productive and business decisions more exact.
For example, many lenders are now using self-learning algorithms, credit score technology and other software solutions to automate part of the credit decision making process. This, in turn, helps credit underwriters to determine the level of risk and make a credit decision much faster than in the past, sometimes even within one business day.
Going forward, we expect to see further innovation with more and more lenders, brokers and SMEs using technology to streamline business processes–exciting times are ahead!
…to leave time to strengthen relationships
But despite the general belief, the rise of technology will put an increased value and appreciation on human interaction and personal relationships–something which cannot be replaced by a computer.
Face-to-face meetings and phone calls will form an important part and help further interpersonal relationships between lenders, brokers and their clients. At Spotcap we believe that building trustworthy relationships is based on the combination of technological progress with human interaction which will become an important differentiator. And those brokers who are able to master this balancing act will have the most success.
In short, regular evaluation of your business offering, that of your clients and the overall industry is paramount. Only then can you spot trends and innovations and use them to your and your clients’ advantage, future-proofing your business for 2018 and beyond.
Originally published in NACFB Magazine January 2018.
Originally published January 5 2018 , updated February 25 2020