Over the past few years, alternative lending options for small businesses have evolved into a robust and innovative industry. Banks are clearly no longer the only direct source for working capital.

Swift Capital is one of the more established and experienced companies in alternative lending, and as the Chief Product Officer, I am always looking at major trends and how we can meet the demands of our customers in a space that is rapidly changing.

Here are six trends that I think will gain traction in 2016 when it comes to getting small businesses the funding that they need:

1. More affordable choices for small businesses. Competition, innovation, and increasing industry awareness will continue to reduce the costs of small business funding. As alternative lenders gain scale, continue to refine their businesses, and can access different sources of funds, they will in turn pass those scale savings on to their customers to increase their competitiveness with traditional banks.

2. Customer relationships and empowerment will take center stage. Lending companies that have built their businesses on sound principles, transparency, and trust with their customers will start to pull away from the pack. Customer reviews and word of mouth will be a key marketing tool. New products will emerge as a result of customer feedback–relationship based pricing, long-term account managers, and innovative products and digital features that give businesses more control and customization.

3. Transparency takes hold in the form of simplicity. Reputeable lenders will continue to lead the industry wide movement towards transparent terms and price calculations. How interest is calculated and the schedule of payments determined should be clear and easy to understand.

4. Interesting partnerships will emerge. Some large well known banks have admitted that they do not have an optimal customer experience for their small business customers and are seeking help from innovative alternative lenders. This could be a large win for customers if these partnerships are focused on broadening access to credit and allow for innovation in underwriting.

5. Economic uncertainty will tighten access to capital. While the unemployment rate continues to show encouraging signs, the economy is sensitive to the global factors, central banks, and gyrations in oil prices. If trends from early 2016 continue, funding for small businesses may start to tighten from larger financial institutions that tend to be highly sensitive to macro-economic factors.

6. Direct lenders will move to the forefront. With all of the trends outlined above, look for direct lenders (lenders that actually lend their own capital), to be the most focused on building their long term relationships and service capabilities. Comparison services are a great way to get a quick view of options, but direct lenders are most interested in winning your business and being your long term working capital solution.

The industry continues to evolve and mature for the better. Here at Swift Capital, we’re hoping to propel it forward. The most important focus for Swift in 2016 is our continued commitment to helping small business owners get access to working capital and building a long term relationship with our customers.


Jay Lee is the Chief Product Officer at Swift Capital, a leading direct provider of working capital solutions to small businesses. For over 20 years Jay has been focused on marketing and technology in the lending, payments, and loyalty industry. He has held senior executive positions in strategy and marketing at Aimia, American Express, GE Capital, and FleetBoston Financial. 

Our mission at Swift Capital is to unleash the potential of every small business by providing them with fair and convenient access to working capital. We harness data and technology alongside personalized human expertise to see the true potential in every business. Did you like this post? Tell us what you’d like to see on our blog. Email us at [email protected] or tell us here.


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