If you wanted to play the lending game as a financial services provider then you’d have to go through the extremely taxing and rigorous process of getting accredited by your country’s financial service regulatory board. What that would subsequently mean, assuming you actually get accreditation, is basically that you’re trying to consolidate on your wealth because lenders typically exist in the form of institutions with loads and loads of money already.
They do work with some fine margins however, even in the case of the biggest of banks which would appear to be sitting on stockpiles of cash. It’s more like some cash reserves which they have to have as a means through which to protect the consumers and the market from reckless lending practices which could eventually result in yet another global financial crisis.
Now I opened with all of that information just to highlight how one should think in the event that you want to get some sort of loan application approved. You have to think like the lenders.
Business-to-business B-2-B lending comes into focus as a means through which to possibly get the funding you’d need for your business, quite simply because you’d otherwise be stuck with the likes of the big banks and we all know that banks and similar financial institutions simply don’t take risks. You’d perhaps be able to land a business loan if you had a full-time job to put up as “surety” of some sort, as ironic as that may be since with the best of entrepreneurs pursuing their business endeavours, it’s a case of either-or, but never both.
Going back to the fine margins with which the seemingly colossal lending institutions work, the typical bank has a lot of daily operational costs, such as having to pay its staff, having to pay the bills to keep their operations running, etc., so the money they actually have to lend out has a lot more strings attached to it that what meets the eye. In fact it’s very seldom that they’ll actually be lending you money that truly belongs to them, but the likes of fractional reserve banking and gearing will perhaps come together to make for a topic for another day.
Back to B-2-B lending – you’d actually be quite surprised to find that there are many other businesses which are registered with the relevant regulatory boards, willing to lend to other business since they perhaps better understand the risk involved and so they’re in a position to make a better decision on whether to lend or not. The bad news in that regard however is that you have almost no chance at all of coming into contact with such a lender, but the good news is that lending aggregator platforms such as Loanable.com bring all of these potential lenders together on one platform and then make it easy for any such suitor to decide if you’re a worthy borrower and give you the loan you may need for your business.
It would have perhaps been nice to have direct B-2-B lending channels, but then again issues of legitimacy, protection and integrity would arise unhindered as a result.