Competition between companies in the “non-traditional business loan” sector is likely going to benefit entrepreneurs looking for financing. Any concerns? What kind of interest rates are being charged? It varies. Regardless, it’s hard to argue (from an entrepreneur’s perspective) that having alternatives when it comes to borrowing is not great for business. This, along with peer-to-peer lending, just might be the future of the banking industry.
http://www.bloomberg.com/bw/articles/2014-08-19/square-wants-to-compete-with-small-business-lenders
This is very interesting. I like that they decide how much to lend based on daily credit card sales. It allows both the lender and the borrower to be realistic about how much money can be realistically repaid.
This definitely seems like a disruptive technology. I think it’s interesting how they are able to base the advance on the existing credit card processing data.
The end of the article talks about how the environment for Square is good right now because there is little government regulation. It probably won’t be very long until the government does regulate this time of lending. I would be weary about how government regulation would effect their current lending business model. Compliance could potentially be expensive.