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.