The Alternative Loan Market For Small Businesses Keeps Growing
Online lending platform Credibly has announced its first extended-term loan offering. The "Business Expansion Loan" -- with rates ranging from 9.99 percent to 36 percent, terms of 18 and 24 months, and multiple payment options-- is the newest product from the data-driven fintech site.
As is the trend with alternative lending providers, this loan can be accessed much faster than loans from traditional banks. The Business Expansion Loan can be accessed with in 24 hours with amounts from $10,000 to $250,000.
Part Of Broader Industry Transition
Credibly is among the leading alternative lending providers, a subset of the traditional lending industry that has seen dramatic growth in the last few years.
According to Forbes there are over 1,300 companies in the alternative lending market, and that number is only expected to climb.
The sheer number of these firms has made it easier than ever for small businesses to get loans. Unsurprisingly, this has made the industry particularly profitable for those who've managed to stand out.
Small businesses took out loans of approximately $595 billion in the first quarter of 2015, and a survey from the Aite Group of 1,000 domestic companies with less than $20 million in annual revenue found that over a quarter would consider using an alternative lender.
As a result, startup non-traditional lenders such as Kabbage (which specializes in small business lines of credit) and RabidAdvance (a cash advance offering service) have both provided hundreds of millions of dollars in loans to small businesses. Credibly itself has increased revenue by 100% in the last year. The success of some lenders has even led them to go public, such as LendingTree Inc (NASDAQ: TREE).
With these firms constantly releasing new loan products, it's becoming more difficult for banks to keep up.
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