19 July 2018
Tomer Guriel

All things lending

Tomer Guriel - ezbob

1Posts 12,384Views 0Comments
Finextra community

Transaction Banking

A community for discussing technology trends, views and perspective in global transaction banking

Light at the end of the loan origination tunnel

08 June 2018  |  12385 views  |  3

When buying products online, ordering a taxi or booking a vacation, the modern consumer expects a simple, streamlined experience and instant satisfaction. I have often questioned why the same service is not available to SMEs (small or medium enterprise firms) when they apply for business finance? Despite the fact these firms play such an important role in the global economy, for far too long they have been very poorly served by the lending community as a whole. There can be many reasons for this, but most often it is due to the inherent inefficiencies of fragmented legacy applications and the continuing dependency on manual procedures that still exist within many banks. The negative impact on the SMEs, as a result of lengthy and complex loan application processes, protracted decision making and the associated high cost of service, is profound. Invaluable business opportunities are lost, and competitive positioning is compromised, all because of the onerous journey to securing a much-needed loan. However, times are a changing and with the availability of the ‘Lending as a Service’ concept, finally there is light at the end of the loan origination tunnel.

Transforming SME lending capabilities within banks is one of today’s ‘must do’ initiatives and has captured the attention of the Board. And although there are only a handful of early adopters such as Esme Loans and a few others, the industry perception of Lending as a Service, as a potential game changer, is definitely gaining momentum. Thanks to modern technology and availability of a wide array of data sources, financial services providers are now able to provide instant financing – anytime, anywhere. Just consider some of the proven benefits this revolutionary approach to SME lending provides. Reduced operating costs, significantly improved operational efficiency and risk management, accelerated decision making capabilities, together with an enhanced client experience, what’s not to like?  We are now also seeing a growing number of new players, not just the traditional lenders, who are looking to offer a variety of instant financing solutions alongside established products such as mortgages, asset finance, invoice finance, commercial real estate finance, line of credit, and overdraft facilities, at a potentially lower price point.

These new competitors and the expanding range of funding alternatives that Lending as a Service provides, at last will truly empower the SME community. Not only will it enable them to achieve their business development goals faster and more efficiently than ever before, it will help to create even more employment opportunities and fuel future economic growth. My personal hope is that the positive impact on the global economy of a streamlined and highly cost effective virtually ‘on-demand lending’ capability will be far reaching and is for the common good of all. It’s time to head towards the light. 


a member-uploaded image TagsInnovationTransaction banking

Comments: (3)

Marc Philippo
Marc Philippo - Ezbob - London 09 June, 2018, 06:08 Excellent points that get to the heart of what is wrong with traditional approaches to SME finance today. As evidenced by recent surveys, SMEs are the under-served sector of society yet are the backbone of our economy. 5.7m SMBs employing16 million people
Be the first to give this comment the thumbs up 0 thumb ups!
Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 09 June, 2018, 20:04

I agree that SMEs have a lousy experience while applying for bank loans. However, I disagree about the root cause. Bob Hope once said, "A bank is a place that will lend you money if you can prove that you don't need it." SMEs can't. That - more than technology - explains why banks treat SMEs shabbily. IMO, SMEs will get a good borrowing experience only from nonbank loan providers viz. NBFCs (Non Banking Financial Companies) in India.

Be the first to give this comment the thumbs up 0 thumb ups!
Dharmesh Mistry
Dharmesh Mistry - Temenos - Reading 11 June, 2018, 10:02

Good post. I think you can look at what Coconut and WorkSolo are doing in the sole tradesman/contractor market. And also Holvi and OakNorth in the SME space specfically... its just a gap in traditional banks... though listening to HSBC on Trade Finance, its' probably that the change in SME is coming, but just behind retail...

Be the first to give this comment the thumbs up 0 thumb ups!
Comment on this story (membership required)

Latest posts from Tomer

Light at the end of the loan origination tunnel

08 June 2018  |  12385 views  |  3 comments | recomends Recommends 0 TagsInnovationTransaction bankingGroupTransaction Banking

Tomer's profile

job title Co-Founder & CEO
location London
member since 2018
Summary profile See full profile »
Tomer is the Co-Founder and CEO at EZBOB, an innovative online financing company. EZBOB has developed a sophisticated and automated online lending platform that provides immediate funding for any qual...

Tomer's expertise

Member since 2018
0 posts0 comments
What Tomer reads
Tomer writes about
InnovationTransaction banking
Tomer's blog archive
June 2018 (1)

Who's commenting on Tomer's posts

Dharmesh Mistry
Ketharaman Swaminathan
Marc Philippo