On the Fourth of July, Americans celebrate the country’s founding principles of freedom and liberty, which are exemplified by the American Dream of entrepreneurship. Small businesses are the lifeblood of the American economy, fostering innovation and resilience in their quest for financial freedom.

But no dream of free enterprise is possible without the financial resources to see it come to fruition. Access to capital can make the difference in whether or not a startup grows and thrives, or the American dream disappears altogether.

This is where small business loans and banks come in. With a small business bank loan, entrepreneurs can hire the right staff, open storefronts, invest in equipment and technology, and foster innovation. A small business loan is the instrument that makes the American Dream come to life.

From Main Street America to tech startups, the entrepreneurial spirit lives on. And community banks and financial institutions are front and center, making it all happen. 

But the lending atmosphere is changing. Small business owners want innovative financial solutions that cater to today’s business needs. Small business loan automation is the answer for forward-thinking banks and the modern entrepreneur.

The Role of Small Businesses in the U.S. Economy

American entrepreneurship is achieved through hard work and innovation. Small businesses have shaped the U.S. business world from the pre-industrial colonial economy to today’s tech-driven landscape.

How Banks Grow Local Economies Through Small Business Loans

For businesses to stay competitive and drive local economic growth, they need financial support and small business loans. According to the Census Bureau, more than two-thirds of small businesses have applied for a bank loan to grow their business or meet another business purpose, while just over half were approved for financing.

Common reasons for seeking a small business loan include needing capital for the business’s day-to-day operations and a business expansion opportunity. Other reasons entrepreneurs seek bank loans are to refinance current business debt, boost cash flow, or purchase equipment.

Without bank loans, many small businesses would have a hard time staying on their feet or reaching a sustained level of growth. Job creation would slow down, and local economies would struggle.

Here’s how small business loans power the local economy:

  • Facilitating Job Growth: They contribute to workforce development, hiring, and wage growth.
  • Keeping Money Circulating in the Community: Small businesses spend loan money on local suppliers and vendors, local services, and employee wages. 
  • Supporting Tax Revenue Growth: Thriving businesses pay more in taxes, and local and national governments invest more in services and infrastructure, further driving economic activity.
  • Fostering Innovation and Productivity: Small business loans fuel innovation, boost efficiency and productivity, and keep prices competitive.

With loan products like term loans, commercial real estate financing, equipment financing, and lines of credit, businesses can position themselves for success and contribute to their local and national economies.

Helping Small Businesses Qualify: The Digital Difference

Things have changed a lot since America’s pioneers built the new world. Today’s business world thrives on innovation, customer-centric strategies, and fast solutions. 

Unfortunately, the old way of banking doesn’t meet these needs. The traditional bank underwriting process is full of red tape and slow, complex processes, especially for small business loans. In addition, banks often limit their financing options for entrepreneurs.

While bank loans may have lower interest rates, many small business owners are going online to digital platforms for loans rather than applying in-person at banks. This means banks are having to rethink how they do business. 

To effectively serve today’s entrepreneurs, banks must prepare and go beyond basic underwriting to determine creditworthiness. 

While evaluating a borrower’s business plan and credit score is still an important part of the process, modern lending involves a more comprehensive view of a borrower’s financial standing. This is especially true when working with new businesses that lack a long credit history or business credit. 

Digital loan origination platforms integrate data from multiple sources to determine the best business financing option, loan amount, and repayment plan. Digital platforms also recommend the down payments and collateral that reduce the loan risk. 

Other benefits of a digital lending platform include:

  • Improved credit assessments
  • More accessibility for underserved business owners, such as those with a rural business
  • A streamlined application and qualifying process
  • Instant or faster loan decisions
  • Improved loan performance
  • Enhanced borrower experience 
  • Better regulatory compliance

Biz2X Empowers Banks and Entrepreneurs With Fast, Smart Lending Solutions

Biz2X is helping banks adapt their strategies and streamline their small business loan processes. With cutting-edge innovation and scalable, digital technology, Biz2X enables smarter risk assessments, reduced processing times, faster loan approvals, and an enhanced customer experience for entrepreneurs.

Through advanced data analytics and small business loan automation, the Biz2X SaaS platform offers a faster, smarter way to provide the capital small business owners need. 

The Biz2X Advantage for SBA Loan Automation

U.S. Small Business Administration (SBA) loans have huge advantages for entrepreneurs. But for banks without a software automation process, managing SBA loans can be time-consuming and complicated. 

Between seeing if a borrower meets strict eligibility requirements to exhaustive paperwork and a lengthy application process, the traditional SBA lending process isn’t optimal for banks or small business owners.

But with SBA loan automation software, Biz2X makes it easier for banks to participate as SBA lenders and process SBA loan programs faster and more efficiently. 

With tools tailored for SBA 7, 504, and microloan programs, Biz2X helps banks:

  • Automate several processes, including application intake, eligibility checks, and documentation
  • Digitize communications with borrowers and third-party services
  • Ensure compliance with SBA regulations
  • Track performance and reporting with built-in dashboards

Banks that use SBA automation can serve more small business owners and increase approval rates. But smart lending isn’t just about speed and approving more loans. It’s about helping your bank become a better finance partner for its clients. 

As a trusted advisor, you can position your bank for long-term success and engagement with the entrepreneurs who are leading the charge in today’s economy.

Main Street Success Stories

BayFirst Leverages Biz2X’s Branded SBA Platform and Becomes Top SBA Lender

BayFirst Financial partnered with Biz2X to power its SBA lending through the CreditBench portal. They needed a scalable system for their SBA lending products like Bolt, FlashCap, and Premier loans. They wanted to streamline credit policies, workflows, and documentation.

Biz2X’s automation and integrations reduced manual tasks and enabled instant online processing. A broker portal added pipeline visibility and improved the borrower experience. The bank saw almost immediate results, with 50-plus new small business applications a day and almost 3,500 decision applications processed over the year.

Plus, BayFirst reduced the time from application to decision-making to 16 days, instead of the weeks to months it previously took. The improvements in efficiencies helped BayFirst rank among the top SBA lenders for the past three years, all while growing their SBA loan volume and supporting rapid access to capital for small businesses. 

Newity Streamlines SBA Workflows, Sees More Than 500 SBA Loans Funded in One Year

Chicago-based Newity, a small-business capital provider, partnered with Biz2X in November 2021 to streamline SBA 7(a) lending through Biz2X’s platform. Rather than underwriting loans themselves, Newity facilitated access for its business clients by integrating with Northeast Bank, an SBA-preferred lender. 

They leveraged Biz2X’s customizable digital workflows to enhance application efficiency and ensure smooth handoff from Newity to the bank. The results were impressive. By 2023, more than 500 SBA loans were funded, and over 6,500 applications were reviewed by Newity’s underwriters and relationship managers through the Biz2X platform.

Conclusion

The American dream is the same as it’s always been. To build a business from scratch and achieve the highest level of success that results in more financial freedom for those who dare to dream. 

Today, tech-powered digital lending platforms are the driving force behind small business lending success.

As small business owners seek faster and easier ways to get small business loans, it’s essential for banks to meet the needs of their clients. Banks that leverage digital platforms will be in the position to lead the way toward success for both their financial institution and small business owners.

FAQs About Small Business Loans

1. How do lenders support the American Dream for entrepreneurs?

Lenders provide small business loans that enable entrepreneurs to launch, grow, and sustain their ventures. They help them bring their business ideas to life and build businesses that contribute to their local communities.

2. How are small business loans important to the U.S. economy?

Small business loans are essential to driving job creation and boosting local economies. Small business bank loans also encourage innovation and help to sustain national economic growth. Access to capital also empowers entrepreneurs to invest in operations and expand their workforce.

3. What are the best small business bank loans to help businesses grow and succeed?

The best bank loans are tailored to meet the business’s current needs. This includes term loans, business lines of credit, commercial real estate financing, working capital loans, SBA loans, and equipment financing. 

4. Can banks survive without automation in 2025 and beyond?

A smaller community bank may be able to survive without automating its processes, but it’s unlikely it will thrive. Small business owners and banking consumers expect digital offerings from the companies they do business with. Many customers want to do all of their banking and borrowing online.

5. How can small business loan automation help banks and small businesses? 

Automated, cloud-based lending software streamlines application intake, speeds up approvals, ensures compliance, and improves the borrower experience. With more borrowers being pleased with their experience, this often results in higher customer engagement and loyalty, with small business owners returning for more banking services. This translates to a higher ROI for your bank.

Ready to power up your bank’s small business lending division? Biz2X’s leading digital platform can help. Contact our experts and request a demo showing how your bank’s digital transformation can lead to increased applications, faster decisioning, and more loan approvals and revenue for your financial institution.