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FinTech: New ways to finance self-employment and SMEs

The term FinTech – combination of financial services and new technologies – is an abbreviation for financial technology. Among them, various modern technologies are subsumed, which are assigned to the financial sector. A FinTech company – often referred to as FinTech – is thus a company that offers modern, usually Internet-based finance technologies. With their unconventional ideas and innovative business models, FinTech companies whirl around the classic financial and banking world.

FinTechs offer alternatives to the classic bank loan

Professionally self-employed, tradesmen, freelancers and small companies do not have easy to get loans. The tightened credit conditions in Basel III are the reason for this. Demand for alternatives to conventional bank credit is high. Therefore, more and more fintech companies (FinTechs) are trying to establish themselves as an alternative to the house bank. This article provides an overview of today’s FinTech companies for the self-employed, businessmen, freelancers and small companies and their financing models.

FinTech applications for customized financing offers

FinTech applications lead to customized loan solutions for SMEs. FinTechs are in competition with long-established financial institutions. The winner is the customer: new offers – easy to use, lower costs, greater transparency!

Unlike the house bank, FinTech offers tailor-made financing options, i. E. offers tailored to the individual needs of the customer. In the lending business, tailor-made offers are always for the benefit of the customer, as they only pay for services that they consume.

This is quite different with traditional banks (house banks): the customer, often in the role of the petitioner, receives a standard offer from the bank with fixed conditions for interest and repayment modalities, regardless of their individual needs. For example, a client has very different credit requirements to bridge a liquidity gap than financing a long-term product development.

FinTech leads to a paradigm shift in SME financing

From petitioner to courted customer! With the new FinTech era you take on the lead as a corporate customer and decide on your own which offer and which financial service provider comes into play. You notice the difference: not the bank, but you alone determine the procedure!

The FinTech portals on the web offer a variety of flexible financial services tailored to individual company needs. In the US, around 80% of corporate financing is already bypassing conventional banks. In Germany too, alternative corporate financing through FinTech portals and online brokers is on the rise.

Our tip: Study loan requirements before applying!

Self-employed persons, tradespeople and small businesses are well advised to consider the conditions for a loan in advance before applying. Thus, self-employed and small companies save a lot of time, frustration and false hopes. It should be noted that the terms of a loan are each dependent on the lender.

Loan applications are often rejected for formal reasons, as the requirements are not met. All too often completely unnecessary, because often the self-employed would meet the requirements.

Our credo: No credit agreement without credit comparison!

As with any loan, we also recommend lending for the self-employed and small business to get at least 3 offers. The deviations and thus the savings can be considerable. The reason for this is that in the credit check of self-employed different credit institutions apply quite different assessment criteria. Under Credit comparison you will find a concrete guide to the procedure.

Self-employed, tradespeople and freelancers 95% did not know that …

Everything else about cheap loans for the self-employed, freelancers, founders, entrepreneurs, traders and small companies find loan seekers in our practice guide loan for the self-employed.

Also published on Medium.

Published inFintech
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