Veterans are known for being entrepreneurial. In fact, despite making up only a small percent of the population, they are responsible for 8% of the new businesses that are being started . The U.S. military is known for creating strong leaders and building responsible, driven individuals who care deeply about their teams. These skills translate directly to the civilian world with the result that veterans often have many of the skills a small business needs to succeed.

Unfortunately, skills alone aren’t always enough to get a business off the ground. Capital is also needed. Digital lending provides easier access to small business lending solutions.

By partnering with a digital platform, banks can play an essential role in providing the capital veteran entrepreneurs need.

Veteran-Owned Businesses at a Glance

Challenges For Veterans Seeking Small Business Lending Solutions

Like other small business owners, veterans may experience difficulties in getting the funding they need for a business.

These include:

  • Problems building credit or getting small business loans
  • Lack of collateral
  • Tough loan underwriting and credit approval processes
  • Not having the right business skills
  • Navigating red tape from government regulations
  • Hard time finding mentors or business networks
  • Problems navigating the resources available to veterans

Fortunately, many of these problems have a solution. Banks can offer small business lending solutions to veterans through digital lending platforms that provide easier, faster, and more inclusive access to funding.

What is Digital Lending?

Digital lending is a seamless way for borrowers to apply for small business lending solutions. The entire underwriting process takes place online.

This process includes:

  • Applying for the loan
  • Uploading documents
  • Real-time verification of documents
  • AI-driven risk assessments
  • Approving the loan

Digital lending solutions include fintech platforms, peer-to-peer lenders, and online banks. In many cases, small and regional banks partner with a digital lending platform like Biz2X. This allows them to provide more flexible and inclusive small business lending solutions to veterans.

Benefits of Digital Small Business Lending Solutions

Digital lending increases access to capital for many small business owners. There are also other advantages of these platforms.

Speed and Convenience

Digital small business lending solutions enhance convenience and speed for veterans seeking funding. Veterans can complete their small business loan application online. This removes the need for a borrower to go in person to a bank branch.

With a digital footprint, there is less paperwork and more efficiency during the loan process. This frees up workflows for banks and enhances the customer experience.

A borrower will often receive an answer in hours or days. Faster approval means faster funding. This ensures veterans have the capital they need ASAP for business growth opportunities, much-needed inventory or equipment, or to boost cash flow during seasonal downturns.

Better Loan Management

Digital tools help lenders and veterans manage the loan better. With small business loan management software, banks make smarter loan decisions. Your underwriting department can even determine which thresholds to enter into the system to assist with loan automation.

Users can track a business’s financial health, evaluate its performance, and monitor the loan. Digital platforms also make it easier for banks to flag a problem early. That way, the bank can step in and proactively prevent a loan default.

More Inclusive Access to Capital

Digital lending looks at more than just credit scores. Alternative data is considered to determine a borrower’s creditworthiness. This provides more flexible eligibility criteria tailored to the unique needs of veterans.

These types of data include:

  • Cash flow
  • Annual revenues
  • Spending patterns
  • Account receivables
  • Business banking and checking account information
  • Payment histories from rent and utility payments
  • Potential collateral or down payment
  • Business performance
  • Military service history
  • Online reputation, including social media mentions and reviews

This alternative data can help qualify veterans who may not qualify for a traditional loan. Digital lending platforms also increase access to small business lending solutions for borrowers living in underserved areas.

Digital Small Business Lending Solutions

Digital platforms offer many customized small business lending solutions for veterans to grow their businesses.

These include:

These small business financing solutions have previously been provided through traditional banks. However, digital platforms integrate technology and software to make the process for these loans more efficient.

Case Study of a Successful Veteran-Owned Business

Rafael Cuellar, a U.S. Navy veteran, started his own business and needed funding to grow. After consulting with an online lender that used a digital platform, Cuellar received the funding he needed.

But he received more than capital. The platform’s funding specialists helped him explore flexible funding options. They also mentored him about business development, which helped him grow his business portfolio.

Cuellar has since run several companies and has become a successful, prominent businessman, serving on many important boards in New Jersey.

His story illustrates the role digital lending can play in supporting veterans and helping them succeed.

Choosing the Right Digital Lending Platform

If your bank is exploring small business lending solutions through a digital platform, selecting the right platform is essential.

Look for these key features:

  • Automated underwriting
  • Real-time application tracking
  • Clear loan terms, interest rates, and fees
  • Reputable loan management software
  • Flexible lending options
  • Compliance and regulatory features
  • Strong security features
  • Tailored solutions to match your bank’s requirements

Banks should also partner with a digital provider that has a deep understanding of small business lending solutions. In addition, look for platforms that have shown excellent recovery histories during past disruptions.

Final Thoughts

Investing in veteran entrepreneurship fosters innovation, contributes to job creation and growth, and drives long-lasting economic impact.

Digital small business lending solutions help veterans secure funding faster and easier. Small and regional banks can serve veterans better by partnering with a digital platform.

As digital lending becomes more popular among small business loan borrowers, there’s never been a better time for banks to explore their options. Choosing small business loan management software with compatible tools and processes for your bank is essential to success.

By adopting digital tools, your financial institution can remove many of the barriers veterans have in getting business financing. This can better empower them to grow their businesses and achieve sustained success.

Biz2X is a premier online business lending platform that was built for lenders. We understand small business lending and have developed solutions for banks of all sizes. With leading experts across all disciplines, our platform can help your bank achieve success as it moves towards digital small business lending solutions. Contact our team today at (877) 590-3365 to get your bank’s transition started.

FAQs About Small Business Lending Solutions

What type of software is used in digital small business funding solutions?

Most lending platforms use loan origination software, which helps simplify documentation, streamline the application process, and increase the efficiency of the loan underwriting process through automation.

Reputable platforms also use software with scalable technology to customize needs for each client. Accounting software that accesses real-time financial data is also helpful.

What key software features does a bank need when offering small business lending solutions digitally?

Your bank should look for a platform that customizes the loan origination process to your bank’s lending preferences. A platform that offers real-time risk assessment is also crucial, as are robust security measures. It should also have flexible small business lending solutions to meet the varying needs of businesses.

Is SBA loan underwriting easier through digital platforms?

Digital platforms that connect directly to the SBA’s systems are easier than traditional loans. It streamlines loan processing and renders faster approvals. But not every small business lending platform offers this. So, it’s essential to ensure that the one you partner with does.

How can a digital platform help veterans in ways that a bank alone cannot?

All digital platforms aren’t created equal. But an effective platform enhances the overall borrower experience by offering faster service and more flexible loan options for veterans.

Is Fintech the future of small business lending?

McKinsey predicts that through 2028, revenue in the Fintech industry will grow nearly three times faster than traditional banking revenue. Many small businesses now prefer digital lenders. As more banks adopt digital small business funding solutions, it’s important to keep up to stay competitive.