Small businesses have the power to be a catalyst of transformation for our communities – and our economy. They also employ half of the nation’s private sector workforce and have created roughly two-thirds of net new jobs since 1995. Although interest rates have been kept at historically low levels by the Federal Reserve since the Great Recession began in 2008 in order to spur loan activity and borrowing to grow the economy, a major barrier cited by small businesses – especially non-traditional entrepreneurs – continues to be access to low cost capital.
“These barriers are especially true for women, veteran, and minority-owned companies who tend to be denied credit, receive lesser loan amounts, pay higher interest rates, and continue to remain in need of funding.”
As a result of these challenges in the traditional small business financing system, fin-tech alternative lenders have stepped in to fill the void left by the traditional banks and small businesses are turning to online lending platforms in record numbers. These online alternative lenders do more than fill the void left by the banks; they are also more likely to approve a loan for a small business, no matter the size or the ability to meet standards such as cash flow, collateral or credit score. Although online lending platforms deliver a more streamlined and expedited application and approval process by utilizing technology and innovative algorithms, this comes at a tremendous cost to the borrower in the form of significantly higher and sometimes predatory interest rates.
SourceFunding.org will be the first financial technology platform utilizing an innovative common application and matchmaking algorithm to more rapidly facilitate and streamline access to low-cost financing alternatives available through the thousands of community banks, credit unions, economic development organizations, and CDFI’s.
Given the option, small business applicants prefer to borrow from these more traditional lenders rather than the high cost online lenders, which will give SourceFunding.org a competitive advantage. The platform will also differentiate itself by having a focus on creating sustainable and responsible pathways for financial and economic inclusion by facilitating access to low-cost and responsible capital lenders for under-served small businesses and entrepreneurs.
To find out more about how this fin-tech company is leveling the playing field by fostering financial inclusion, community development, job creation, and pathways to economic stability for historically under-served and marginalized populations please visit: SourceFunding.org
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