How New Technology Is Improving Your Business Loan Process

Georgia McIntyre

Georgia McIntyre

Finance Writer at Fundera
Georgia McIntyre is the resident Finance Writer at Fundera. She specializes in all things small business finance, from lending to accounting. Questions for Georgia? Comment below!
Georgia McIntyre

How many industries has technology fundamentally changed in the past few decades?

Let’s rattle off a few: travel, print, media, television, retail, hospitality, shipping, manufacturing, education… The list goes on and on.

And thanks to the introduction of online alternative lending, here’s another industry to add to the list: small business lending.

By using new technology, these alternative lenders have revamped the business lending market—bringing speed and efficiency to an industry that’s been known for the exact opposite.

Here’s a rundown of how technology has changed the business lending industry and what these changes mean for your small business loan application.

Applying For a Small Business Loan 10 Years Ago

Rewind to 2006.

If you were a small business owner looking for capital 10 years ago, how would you go about getting a small business loan?

You could go the equity route and approach investors, or you could get creative and look for financing from family and friends—both tried-and-true methods.

But if you wanted to get a commercial business loan from a financing institution, your best (and only) option was going to your local bank.

If you’ve ever applied for a bank loan before, you know what to expect. The application process is involved. You spend time and effort putting together a seemingly endless amount of paperwork for your application, you submit, and then you wait. And after waiting weeks—or even months—you hear back from the bank. Most likely, you can expect to get a big, fat “no.”

All that time putting together your small business loan application… With nothing to show for it. And your small business still needs those funds.

Bill Gates summed up the whole bank loan application process nicely in 1994: “Retail banks are dinosaurs.”

Applying For a Small Business Loan Now

Don’t get us wrong, a traditional bank loan is a fantastic financing solution for small businesses—you can get long-term and low-cost capital to meet a variety of business needs.

But it’s a slow process and hard for most small business owners to qualify for. So if you (or the bank) decided that a bank loan isn’t the right move for your business, you still have financing options.

Around 2007, non-bank, online lenders joined the small business lending industry to provide business owners other financing options when they don’t qualify for a bank loan or don’t have the time to wait around for one.

And thanks to these alternative lenders, applying for a small business loan now is a totally different process than it was 10 or 20 years ago.

Why is it so different now?

Well, there are a few factors that set alternative lending apart from traditional lending.

But it was technology that really took small business lending out of the dinosaur ages.

How Technology Has Changed Your Small Business Loan Application

According to this Harvard Business School study, business owners on average spend 25 hours completing a bank’s business loan application.

Meanwhile, business owners who work with online lenders spend only 30 minutes on their business loan application—and that’s a change largely due to technology.

Speed & Efficiency

Online business loan applications are highly automated and efficient, only asking the questions they need to ask for your application.

On top of that, you won’t spend hours at the printer putting together all the paperwork you need for your loan. In general, alternative lenders require less paperwork for your loan and most online applications let you upload any of those documents straight from your computer. (Fundera even lets you sync your bank account to your loan application to make the process even more seamless.)

And when you get your application submitted, you won’t have to wait for weeks or months to get the capital in your bank. Alternative lenders can approve you in minutes or hours, sometimes getting you the money you need in just a few days.

They can approve your business loan quickly by using efficient underwriting algorithms to process your application, instead of relying on human underwriters and outdated programs.

In the end, it all comes down to this: because of fast-paced technology, the small business loan application process is simpler, speedier, and easier for business owners.

Can You Trust Technology in Your Small Business Loan Application?

By using technology to make the business loan application process faster and smarter, alternative lenders have a leg-up on traditional banks.

That’s all well and good, but can you trust these online lenders and their new technologies?

Let’s clear up a couple concerns you might have about technology and your small business loan application.

Is My Information Safe?

When you apply for a bank loan, you physically go to a bank, hand over your application, and shake hands with the bank’s representative. You know exactly who has your loan application—and you can be confident that they’re not sharing your sensitive financial information with anyone else.

On the other hand, if you upload all your documents from your computer to an online loan application, you might be a little nervous that your information isn’t as secure.

While that’s an understandable worry, you can rest assured that your information is safe with online lenders: when you submit your loan application to alternative lenders, all your information will be encrypted—barring access for anyone you don’t want seeing your financial information.

Put simply, the best online lenders use technology that’s bank-level secure. You can be confident that your information will be under the same level of security as if you went through a bank.

Should I Hand Over Access to My Online Accounts?

Some online lenders might have you sync up your online bank account with your loan application, giving them access to your online account either before or after you’ve been approved for your loan.

This might seem a little fishy to you—why should you hand over your bank account login?

Well, online lenders want to continuously monitor your bank account for the benefit of your loan application process. By having access to your online bank account during the underwriting process, they can see how your financials stand—only approving you if they can see themselves that you can realistically take on debt and repay your loan.

And if an online lender wants you to grant them continuous access to your online account after you’ve been approved, that’s for your benefit, too.

By monitoring your financials throughout the term of your loan, lenders can stay on top of any red flags that might come up in your bank account.

If your funds are dipping too low or there’s the smallest risk that you might default on your loan, the lender can see that right away. Instead of waiting until it’s too late to make changes in your loan repayments, lenders can help you through any issues you might have with your loan the moment they arise.


If you’re used to the old-school bank loan application process, filling out a loan application online might be a little unfamiliar and nerve wracking. But the bottom line on technology and the small business lending market is this:

Technology has opened up credit access for small business owners, making the loan application process smarter, easier, and faster—without compromising the security that a bank offers.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
Georgia McIntyre

Georgia McIntyre

Finance Writer at Fundera
Georgia McIntyre is the resident Finance Writer at Fundera. She specializes in all things small business finance, from lending to accounting. Questions for Georgia? Comment below!
Georgia McIntyre

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