While small business lending has been turned upside down this year with the pandemic and all the government programs, innovation is still happening. We continue to move towards a world that relies on real time data and provides instant decisions for small business borrowers. This is the promise of Lending 3.0.
There is a new white paper out from Marqeta’s UK office titled, “Lending 3.0: Building a better world for lenders and borrowers”. It takes us through the different stages in the recent history of small business lending. Lending 1.0 was traditional bank lending where loan applications were complex, credit decisions took a long time and a great deal of effort was required from the small business owner. Lending 2.0 was about the arrival of fintech lenders that were digital-first and provided an online journey for loan applications with quicker lending decisions.
We are now entering Lending 3.0. This is all about real-time data and that doesn’t just include bank account information but also how funds are being spent. With new card technology lenders can provide funds on a virtual or physical card instead of a bank transfer. This will not only help the lender stay top of wallet for purchase choices but also provide key insights into how the loan proceeds are being spent. It bridges the gap between lending and payments and this data will help lenders make better credit decisions.
The white paper goes into some depth about how Lending 3.0 works, its seven key attributes and what it means for the different functions of a lending business. It also provides commentary from 10 industry leaders including yours truly.
LendIt Fintech is proud to partner with Marqeta on the distribution of this white paper. You can download your copy here.