How are fin-tech companies different from banks?
Fin-tech companies are the modern day pioneers of SME financing scenario and are helping SMEs reach new heights with their technology-driven, flexible capital solutions. Unlike banks, fin-tech companies offer unsecured business loans and credit lines which are customized solutions to help SMEs function better and grow fast.
In addition, fin-tech companies are also creating capital solutions that focus on solving SME problems like bulk raw-material procurement through their strategic tie-ups with reliable manufacturers. This helps SMEs procure quality bulk raw-material at competitive prices. Also, credit lines allow SMEs to save interests and get better quotes on material.
Some of the key-features of business loans being provided by fin-tech v/s banks are:
- Fast Processing – Fin-tech companies aim at providing quick business solutions to SMEs for their short-term capital needs. For this, NBFCs have designed methods that help them approve a business loan with 3-5 days of document submission.
- Collateral-Free – Fin-tech companies are growing exponentially by offering capital solutions to emerging SMEs with limited or no collaterals. Unsecured business loans and credit lines offered by fin-tech companies do not require any collateral for loan approval. This makes their offerings more client-centric.
- Increased savings – Fin-tech companies offer loans and credit lines at an interest rate of 1.4-1.6% per month which is 1% per month less than traditional lenders. Thus, SMEs can save interest payouts upto 3% over a period of 90-days.
- Saved material costs- By offering money right away, SMEs can negotiate better with the supplier for raw-material price and even save upto 3% of the total payout in some cases. Therefore, unsecured business loans by fin-tech help SMEs access the best of everything to optimize their savings.
- Hassle-Free – Fin-tech companies ensure user-friendly credit application procedure through fast response, online application,
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