What is Fintech and How do Lenders Use It?

Jun 13, 2024

Fintech is a broad term for a wide array of financial technologies that are disrupting the finance world for the better.

What is Fintech?

If you’ve heard the words cryptocurrency, blockchain, insurtech, crowd funding, unbanked, or even online application, these all fall under the fintech umbrella. According to Investopedia, “fintech, which originally referred to computer technology applied to the back office of banks or trading firms, now describes a broad variety of technological interventions into personal and commercial finance.” 

Great. But what does that actually mean? 

It’s hard to define fintech simply because it’s constantly changing. New applications make new things possible all the time, so today’s definition may be dated tomorrow.

How Does Fintech Benefit Small Businesses?

The open definition of fintech is a good thing. 

Small business owners typically have a hard time getting approved at large, traditional financial institutions because operational expenses make smaller loan amounts less cost effective for these companies. It’s cheaper for them to make fewer, larger loans than it is to make more small loans. Fintech makes it possible for lenders like Lendistry to innovate ways to fill that gap and provide access to capital

Fintech opens up access to the data and resources that large, traditional banks once enjoyed exclusively. It also opens up access to data and capital that were closed to many local community banks after the banking crisis of 2008. This makes it possible for small business owners who have been declined by traditional banks to access capital for their futures.

How Does Lendistry Use Fintech? 

Just having an online application for financing is fintech. Through our online portal, we can reach any business owner anywhere in the country, anytime and offer them small business loans. They are no longer reliant on going in person to a bank. As our CEO, Everett K. Sands, often says, “Banks are open 9 to 5, but small business owners are working from 5 to 9. We meet them where they are.” 

From a customer’s perspective, the most important factor is the human behind the technology. Fintech gets a negative reputation because it’s perceived as impersonal and disconnected from quality customer service. At Lendistry, our team of professionals stands behind every application to provide help and training so small business owners have the best chance to receive the funds they need to grow

While fintech may sound like an abstract buzzword, it’s the key to opening previously closed doors to small businesses owned by women and minorities, businesses in rural or low-income areas, or businesses that need smaller amounts of money to take the next step.