Proper management of inventory and working capital expected to drive the growth of the Global Online Financing Platform for SMBs

Published | February 2020

Online financing is a procedure of debt financing under which different individuals can lend and borrow money using the online platform. The systems eliminate the involvement of middleman or banking institutions. The loans provided by the lender assist the lender in producing income in the form of interest. Additionally, the borrowers can have easy access to financing, which is difficult for them to procure if they approach a standard financial intermediary. The amount of interest levied against the loan is lower compared to the traditional prime loans that offer to repay lenders for bearing the risk of non-payment from the borrowers. Investors fund only a part of the loan and spread the amount of the loan across many buyers. The investors receive steady, appealing returns while providing the least risk to multiple borrowers. Global Online financing platform for SMBs market is expected to grow at a CAGR of around 53% during the period from 2020-2026.

Marketplace lending and invoice financing to drive the growth of the Global Online Financing Platform for SMBs Market

After several global financial crises, changes in banking regulations and fluctuations with financial institutions are trying to deleverage the off-balance sheet items to meet the penal capital adequacy requirements. The difference in policies and market fluctuations has led to the reduction of loan finance for SMBs and individual borrowers as they are considered to be risky. An increase in lending to SMBs, borrowers having quicker access to credit, and proper management of inventory and working capital is expected to drive the growth of the Global Online Financing Platform for SMBs Market in the forecasted period. Marketplace lending, invoice financing, supply chain financing, trade financing, and merchant and e-commerce finance are few of the factors expected to drive the growth of the market in the forecasted period. Innovations such as equipment lease finance have helped in the expansion of the market to ease the lending procedure.

The market also witnesses the use of such services by SMBs during their start-up and growth stages as during these phases; the companies find it difficult to raise finance due to lack of data about their performance histories. Online platforms for financing for SMBs offer moderate to high risk along with scenario analytics for different products and services along with real-time pricing and capital management of multi-asset portfolios. The unique tool provides for a detailed and transparent lending solution to SMBs and individuals to buy products and services from an online platform. The online lender's professionals that trade-in with the online platform for use during credit data management and deal with information to generate cash flows and analytics at the portfolio level. The practical process of pricing the product should help manage individual portfolios and avoid firm-wide risks through automation, consistency, and transparency.

Advanced authentication Online financing Platform for SMBs contributed the largest in the market in 2019

Based on type, the Global Online Financing Platform for SMBs Market can be segmented as advanced authentication, identify proofing services, and others. Based on the application, the Global Online Financing Platform for SMBs Market can be classified as personal and commercial. In the year 2019, the advanced authentication Online financing Platform for SMBs has contributed the largest in the market. Both private and commercial Online financing Platforms for SMBs are expected to provide for the highest contribution in the market in the forecasted period.

Asia-Pacific to emerge as the highest contributor in the Global Online Financing Platform for SMBs Market in the forecasted period

Americas, EMEA, and APAC are the major regions where the presence of the Global Online Financing Platform for SMBs Market. Asia-Pacific has emerged as the highest contributor in the market in the recent decade. The extension of the market in the region can be attributed to factors such as Marketplace lending, invoice financing, supply chain financing, trade financing, and merchant and e-commerce finance.

Global Online financing Platform for SMBs Market: Key Market Players

CircleBack Lending, Kabbage, Lending Club, OnDeck, Peerform, Prodper, Daric, Funding Circle, Borrowers First, Pave and SoFi are few of the key market players in the Global Online financing Platform for SMBs Market.

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