Building a Better Small Business Borrower Experience
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Recording; http://web.sageworks.com/small-business-borrower-experience/ Banks, CUs and alternative lenders alike are competing for small business loans as a potential source of growth. As a result of the competition, progressive institutions are evaluating how to improve the borrower experience for SMEs. In this webinar, we review research showing how institutions can better meet this segment's needs and expectations.
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Building a Better Small Business Borrower Experience
- 1. Steven Martin Vice President steven.martin@sageworks.com Elise Hauser Marketing Manager elise.hauser@sageworks.com
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- 7. 7 Businesses dread borrowing from banks We can make it better Businesses will look elsewhere
- 8. 8 5,000,000 “EMPLOYERS” APPLIED FOR CREDIT 24 million
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- 12. 12 Source: Barlow Research Small Business Rolling 8 Quarter Data, 1Q2014-4Q2014 MONTHLY TOUCHPOINTS OF SMALL BUSINESSES annual revenues $100K to >$10MM
- 13. 13 Search Relief or disappointment Apply & Wait Typically 2 - 4 weeks
- 14. 14 MAJOR COMPLAINTS • Lack transparency • Long wait for decision • Difficult process • Repayment terms • High interest rate
- 15. 15 Access to Capital Ease Speed Good Deal Transparency
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- 17. 17 Access to Capital Ease Speed Good Deal Transparency B+ C- C+ B C-
- 18. 18 Access to Capital Ease Speed Good Deal Transparency “Very few (small businesses) say, ‘I can’t get a loan.” Jamie Dimon | Chairman and CEO of JP Morgan Chase “Small business owners also reported an increase in the ease of obtaining credit” Wells Fargo / Gallup Small Business Index
- 19. 19 Access to Capital Ease Speed Good Deal Transparency SMALL BANKS APPROVE MORE
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- 21. 21 ARE THEY RECEPTIVE TO ONLINE? Access to Capital Ease Speed Good Deal Transparency CANNOT APPLY ONLINE Source: Barlow Research Annual Payments Study 2015 Data
- 22. 22 ONDECK MAKES APPLYING EASY Access to Capital Ease Speed Good Deal Transparency
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- 24. 24 SURVEY SAYS... Access to Capital Ease Speed Good Deal Transparency Submitted 3 applications 26 hours searching for credit Contacted 3 institutions
- 25. 25 Access to Capital Ease Speed Good Deal Transparency
- 26. 26 Access to Capital Ease Speed Good Deal Transparency ...TO LENDING SYSTEMGETTING FROM TAX RETURN...
- 27. 27 Access to Capital Ease Speed Good Deal Transparency EXPECTATION MEET NOT MEET Requested amount All or nearly all Substantially less Rates and fees Reasonable (e.g. 5-7%) High (e.g., > 10%) Loan terms Customary Onerous
- 28. 28 Access to Capital Ease Speed Good Deal Transparency
- 29. Traditional in person, multi-step app, 1 week, 5-7% APR Online simple app, 48 hours, 10% + APR 29 Access to Capital Ease Speed Good Deal Transparency Source: Barlow Research Flash Data Panel 2015 Data
- 30. 30 TRANSPARENCY ENABLERS At ABC Bank, we want to get to know your business and your concerns so that we can create banking solutions that meet your unique needs. blah blah blah ▌ Term Loans ▌ Real Estate Financing ▌ Revolving Lines of Credit For more information, contact your branch Access to Capital Ease Speed Good Deal Transparency MOST WEB SITES TODAY Business Lending ▌Unsecured Line of Credit ▌Equity Financing What you offer - credit box Steps in the process Required documents Frequent communications Fees and prices
- 31. 31 Access to Capital Ease Speed Good Deal Transparency
- 32. 32 Access to Capital Ease Speed Good Deal Transparency
- 33. 33 Searching Waiting Relief or disappointment 2 - 5 days
- 34. 34 Before After
- 35. 35 Access to Capital Ease Speed Good Deal Transparency
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- 37. 37 Steven Martin Vice President steven.martin@sageworks.com Elise Hauser Marketing Manager elise.hauser@sageworks.com