According to the J.D. Power 2017 U.S. Small Business Banking Satisfaction Study many businesses are feeling neglected by their banks. Small business banking is one of only two financial services industries measured by J.D. Power to show year-over-year declines in customer satisfaction in 2017, opening the door to alternative lending companies, like Imperial Advance.
Following are some key findings from the J.D. Power 2017 U.S. Small Business Banking Satisfaction Study:
- Overall small business bank customer satisfaction declines to 790 (on a 1,000-point scale) in 2017 from 797 in 2016, driven primarily by declines in account activities (-1.9 points); problem resolution (-1.5); fees (-1.5); and account manager (-0.8).
- Overall satisfaction is 135 points higher among small business customers who have been assigned an account manager and who say they feel they have a full partnership with that account manager (887) vs. those who do not have an account manager (752). However, customers who indicate having an account manager that does not fully understand their needs are even less satisfied (743) than those who have no account manager at all. Currently, just 52% of small business customers say they have been assigned an account manager.
- Small business customers who have borrowed money from their banking institution are significantly more satisfied than non-borrowers (822 vs. 757, respectively). The borrowing process is an important opportunity for small businesses to build a trust-based relationship with their banks.
Customer dissatisfaction with traditional bank lending has accelerated interest in alternative lending, especially for small business owners and customers who need cash but may not qualify for traditional bank loans because of poor credit.
P2P (Peer to Peer Lending) and OPB (Online platform based business lending) has helped to fill this void. P2P lending, sometimes referred to as marketplace lending platforms, offers a convenient alternative to traditional banking and payment systems, since they focus on the underserved segment of the marketplace with services like consumer lending, student loans, real estate and small-business lending products. OPB (Online Platform based Business lending) offers businesses a lump sum amount in exchange for a share of future transactions and/or sales, lenders in this space mostly target companies with strong credit card sales like retail, as well as the restaurant and service industry.
By 2025, it is estimated that Peer to Peer Lending will reach $350 billion and Online Platform based Business lending will hit $206 billion.
At Imperial Advance, our alternative lending solutions, with loans available up to $1 million are well-suited for small business owners with immediate cash needs. Business term loans, merchant cash advances, revenue based financing, lines of credit and other lending options are available to help entrepreneurs grow and expand their business. Whereas traditional bank loans can take months to receive approval, not to mention reams of paperwork, alternative lending companies are able to approve and fund clients in as little as 24 hours.
