Three major banks in the Netherlands have turned to digital lending for small SMEs. This is due to increased competition from new parties who insure credit within 24 hours. One of the reasons is the decline in turnover, the largest banks have found a solution to provide funds for small SMEs. Various platforms have been prepared to provide digital loans. Think of websites like Fundr, New10, and Funding Options. How do these parties come about?

The situation for small businesses is getting worse, partly due to the credit crisis which is now getting worse. In recent years, these companies have had difficulty obtaining a wide range of products business loan. Only large companies can still invest by taking out loans. In recent years, this picture has changed. However, mutual trust is at a low level. Investments are stopped and small companies seek 100% security just by saving.

Funders

Rabobank is the latest major bank to introduce a digital lending platform, called Fundr. The platform uses digital techniques that make lengthy procedures through local offices unnecessary. This is how it works apply for a loan much faster and Rabobank can compete with alternative lenders. Other major banks have previously launched their own online lenders. “With Fundr we have seen how we can save our customers time with data, machine learning and PSD2, which allows us to look at SME current accounts,” the bank said.

New10

Two years ago, ABN AMRO presented New10. A place where every SME can apply for business credit. Of the more than a thousand small loans the company now provides, most are in the 20,000 to 250,000 euro range with a maximum interest rate of 9 percent. Lending companies now also want to sell products from other providers, thereby increasing the distance to parent company ABN AMRO.

Funding Options

ING collaborated with UK lending platform Funding Options for its digital lending process. Funding Options is a marketplace for business financing. After a trial period, ING added the UK to the bank’s services portfolio at the start of this year. To date, the bank has helped more than two hundred entrepreneurs with capital through Funding Options.

It is not surprising that banks are now offering digital credit. Over the past seven years, the number of bank business loan customers has decreased by 40%. That’s why ABN AMRO introduced New10, ING introduced Funding Options and Rabobank introduced Fundr. So it became borrowing money it is easier for small parties through banks.