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How Fintech Advances Are Creating New Opportunities for Micro-Businesses




Fintech companies are filling in the gaps in SMB finance that the banks left wide open.

6 min read

Opinions expressed by Entrepreneur contributors are their own.

I’ve been a small business owner for over 30 years. When I started my small accounting firm in 1984, I had three clients. And, in the years since, I’ve had my ups and downs. I remember one Monday morning walking into my local bank trying to get a $25,000 loan; I’d just landed a major client and needed the cash to make payroll.

Related: The Next 5 Steps to Take After You’ve Been Denied a Small Business Loan

But, after spending over three hours with the bank owner, I came home empty-handed and had the same result with each of the four different banks I tried, even though I had my financials in order. To raise the cash, I ended up selling my truck along with my stamp collection — in a fire sale. (Yes, I had a stamp collection!)

Nowadays, things are significantly different for business owners, and fintech can take some of the credit.

Clearly, this category is no passing fad but rather a game-changer for micro- and small- and medium-sized businesses (SMBs). While these businesses previously struggled due to the lack of support from traditional banks, they’ve found affordable solutions from fintech.

Those solutions benefit business owners, ranging from freelancers, to founders of startups, to leaders of burgeoning small businesses and other enterprises.

How I wish we’d all had this years ago.

A range of fintech product and service solutions

As the Financial Times reported, this support from fintech companies comes in the form of lending, advice, foreign exchange and various financial products and services. A recent BI Intelligence research report reached similar conclusions. For example, the BI report said, unlike traditional financial service providers that focus on large corporations, fintech companies have carved out increased revenues by filling in gaps in credit, bank accounts and digital business services for SMBs.

A World Economic Forum report gave this trend even more credit, portraying it as a global paradigm shift in which fintech companies are enabling entrepreneurs in developing countries to join in the global business environment. This is due in large part, the report said, to such solutions from these companies as peer-to-peer lending, merchant and ecommerce finance, invoice financing, supply chain financing and trade financing.

Related: 8 Reasons Your Business Loan Was Rejected

As a result, small businesses are gaining market share in the online and offline business environment, and attracting consumer and business targets that appreciate their personal service and unique offerings while still benefiting from secure transactions.

Here are some of the fintech advances helping SMBs.


Lending is one of the most critical areas where fintech has filled a gap for small businesses. As smaller businesses often don’t need a considerable amount of money when they seek loans, they’ve struggled to get any financial assistance. That’s because banks and other lending institutions often don’t see any profit in providing loans of less than $100,000.

Typically, a bank also demands collateral that a small business owner doesn’t have. Both factors created a space that fintech companies could fill by offering what are termed “microloans,” which the Small Business Administration defines as loans of up to $50,000.

An example of a fintech company offering such loans is Kabbage, which provides a way to tap into this type of credit in just a few minutes through a mobile app. Fintech companies like Kabbage offer unmatched speed and convenience; plus, their overall lending requirements (e.g., credit score levels) are less restrictive than banks’, and their interest rates, lower.

I personally tried them out and was instantly approved for $25,000. Business owners don’t get how far along we’ve come and what they have available to them instantly: The money was in my account the next day.

Another online lending platform, LendGenius, allows small business owners to compare financing options without having to fill out reams of paperwork. Instead, you log in and receive a list of the lenders that best match your business needs. You complete just one simple application, even if you apply to multiple loan sources. And the platform gives you fast approval and funding — sometimes in just 24 hours.

Expense tracking and invoicing

In order to make money, small business owners must get paid and monitor their expenses. That’s when they could use a small business accounting process that is affordable and addresses their unique needs.

Enter Sage, a fintech company that offers Sage Expenses & Invoices, an expense-tracking and invoicing app just for smaller-sized businesses. This free app provides an integrated accounting, payment and payroll solution that simplifies the accounting process and reduces the time spent on these necessary aspects of a business.

Nor does the business owner need IT skills or accounting knowledge to get the most out of this fintech app. Other accounting software assumes a business owner understands accounting jargon, but Sage Invoices & Expenses uses ordinary language — like “Money In” and “Money Out” — that anyone can understand.

Receipts can be captured with the click of a smartphone and be stored within the app, enabling access to them for various needs. In addition, invoicing can be taken care of on the go, and overdue invoices generate an automatic reminder. On top of making life easier for the small business owner, a fintech invoicing solution like this one improves the customer experience and offers new insight into the state of business finances.

More cool fintech tools for small business

There are innovative and disruptive fintech companies emerging each year to offer even more direct assistance to small businesses. For example, Domuso is a unique payment service for rental property owners that leverages full-stack rental-payment technology.

Related: 5 Main Reasons Banks Turn Down Small-Business Owners for Loans

Landlords can use the fintech platform to accept risk-free payments online through a credit card, debit card or automated clearing house transfer, and residents can use the platform to make rent payments online or through their smartphones. Domuso also offers installment loans, which residents can pay back over six to 12 months, while landlords still get paid up-front. Such loans can cover security deposits and other move-in costs, helping landlords attract more tenants.

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6 Trends Impacting the Future of Payments




Blockchain. Cryptocurrencies. Mobile payments: The internet of things: Fintech has sure got its hands full.

4 min read

Opinions expressed by Entrepreneur contributors are their own.

Fintech underwent a revolution of sorts this past year with the rise of crypto assets: Cryptocurrencies like Bitcoin and Ethereum have been dominating financial news outlets, and other applications of blockchain technology are being explored to streamline different elements of finance.

Related: 4 Emerging Fintech Trends Relevant to Every Entrepreneur

As blockchain technology continues to filter into the mainstream, it’s important for entrepreneurs to keep an eye on the effects it has on payments, in particular. Here are six trends in fintech that are poised to change the way we pay — and receive payments.

1. Government regulation

While the popularity of cryptocurrencies in 2017 proved that it has the potential to gain mainstream acceptance, the volatility of crypto tokens has caused considerable concern among financial regulators around the world.

International Monetary Fund chief Christine Lagarde, for instance, has said “it’s inevitable” that cryptocurrencies will come under government regulation. And the Securities Exchange Commission and the FBI, this past December, began to crack down on shady practices associated with crypto fund-raising.

In addition, top government officials at the World Economic Forum have expressed concern over the technology. And U.S. Treasury Secretary Steven Mnuchin indicated that regulation would be directed toward markets participating in illicit activities, although Mnuchin did not elaborate on what such regulation of crypto markets might entail.

2. Blockchain P2P transactions

While current popular crypto assets struggle to function as reliable methods of payment due to their volatility, a new breed of cryptocurrencies called stablecoins aims to solve this problem. By utilizing either complex economic models to manage supply and demand or by collateralizing their tokens with real world assets, these startups are creating stable and trustworthy crypto platforms.

Related: Trends the Fintech Industry Should Adopt in 2018

As some of the more promising players in this field of tokens gain more traction, expect cryptocurrencies to be accepted as salary and general payments in the near future. With all of the speed and security benefits that crypto offers, it will be hard to ignore the impact stablecoins will have on financial markets.

3. Cryptocurrency use by consumers and businesses alike

Bitcoin and Ethereum have a total market volume of around $500 billion dollars. But there are very limited ways for people to spend cryptocurrency because most merchants simply don’t accept them. Blockchain development is still at an early stage, and many of the needed tools and infrastructure simply don’t yet exist. 

A Silicon Valley-based blockchain startup called OPEN Platform is solving this problem by creating an application programming interface (API) to enable application developers to connect to OPEN’s API and begin accepting cryptocurrency immediately, with no technical knowledge required.

Just as Stripe simplified credit card payments for merchants with an easy-to-implement API, OPEN aims to simplify payments over the blockchain.

4. Generation Z-friendly

Accenture predicts that, by 2020, Gen Z will make up over 40 percent of United States customers. As financial institutions begin to deal with a generation that’s never known a time before Google and the internet, it would not be surprising see the payment and banking industries begin to shift in a way that’s friendlier to the younger generation.

One of the main demands of Gen Z is user experience, making UX design extremely valuable for businesses competing for the attention of this new generation. Its members view customer experience as the prime differentiator between competing companies, making simple payment transactions more important than ever.

5. Mobile payments

Mobile payments have become immensely popular, with platforms like Venmo making money transfers very simple. More companies are jumping on the bandwagon and begging to offer financial solutions that allow people to pay for goods, pay one other or split bills on the go without having to wait a long period of time for money to transfer.

6. The internet of things

Another recent buzzword, the internet of things (IoT), describes the integration of devices in the home, in public and in stores, using the internet. This integration allows centralized control of a variety of elements in an environment as well as the ability to interact easily within each element.

Related: How Fintech and Payments Innovations Will Disrupt Global Ecommerce

As IoT becomes more popular in homes around the country, expect companies to follow the example Amazon is beginning to set: “If you want to buy something, just tell Alexa.” This means utilizing the internet of things for easy and simple payments — and connecting up more and more with the new trends in fintech.

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