As a business owner, having an efficient cash flow system is essential to the sustainability of your company. If you’re strapped for cash, it’s hard to scale or grow. There’s even a saying in business that ‘you need money to make money’. If you’re running a retail business, you need to spend on raw materials and manufacturing before you can sell the finished product and earn revenues. If you own a web-based company, you may have to spend on a developer to create and maintain your website. Without said website, you’re not utilizing the full potential of your business model. If you run an internet company, why not invest in your online infrastructure?
The issue is that these scenarios are easier said than done. Especially for small- and medium-enterprises (SMEs), an efficient cash flow system is a common concern, and business owners tend to use their personal assets or seek financing. When it comes to financing, access to capital doesn’t get easier. This is because of the strict requirements of banks; however, this difficulty in gaining access to working capital is now a thing of the past. Digital lenders, also called online lenders, have now entered the finance and banking industry, and they provide the access to capital SMEs need.
In the Philippines, digital lending is still in its infancy stage, and there are only a few players in the market for both consumer and business loans. Because of this, small business owners are wary of digital lending. During the loan application process, your business’ financial information and history are scrutinised, so why opt for a digital lender and have your financial information online? This scares owners of SMEs. You might be one of them; however, there’s no need to be scared.
Consider digital lenders. There’s no need to fear them. Why? For the reasons below:
Better safety and security features
Digital and online lenders aren’t only financial companies; they’re also technology ones since most of their processes and systems are done using online software. When it comes to applying for a loan and receiving the funds, both are done through the worldwide web with digital lenders. You won’t even have to leave the comforts of your home or office, and the loan is automatically deposited to your account after approval. Because digital lenders are heavily reliant on technology and the internet, they’ve made sure that their online infrastructure only features the most sophisticated software, which include firewalls, encryptions, and internal controls, which fight against intrusions and security breaches and protects stored data.
It's not scary if you do your research
People fear what they do not know. If there’s a new product in the market, potential customers are hesitant to try it because they don’t know what to expect. Business owners may be wary of online lending because it’s the first time they’ve come across the idea; however, if you do your research, you’ll find there’s nothing to fear. To prove the legitimacy of a digital lender and avoid falling victim to scammers out to get your hard-earned money, do your own research by looking for the following: a full-functioning website that wasn’t created yesterday and barely contains any information on the company, customer and client reviews (positive reviews, of course), and positive news stories. These show that the lender is credible and legitimate to borrow from.
It’s here to stay
Digital lending is a new idea, but it’s here to stay; thank you to the internet. More than that, there’s a need for digital lending. Because traditional lenders employ stricter application requirements and are more hesitant to loan money especially to small and new businesses, accessibility to working capital becomes an issue, which digital lending resolves. With online lenders, small and new businesses who need additional working capital are given access to it. Especially in the Philippines where SMEs play a large part in the country’s economic growth, measured by gross domestic product (GDP), SMEs aren’t going anywhere and so is the need for additional capital, which online lenders provide.
As you can see, there’s no need to fear the digital sphere, online lending included. You use online software every day. It’s hard to imagine not being able to connect with friends and family through social media apps. Online shopping makes it easier and more convenient to get the items you need. Even when it comes to your finances, online banking, be it checking your account balances or making payments, has become the norm. As a business owner, you want to keep your hard-earned assets safe and secure, and you may be hesitant to provide your information online; however, with the 3 reasons above, you can understand why there’s no need to be scared, and if you’re in need of additional capital, consider going to a digital lender.
Ready to begin expanding the enterprise with the business loan you need? Sign up with First Circle today to book a financial consultation.