Empowering entrepreneurs: The role of transparent processes in speeding up loan acquisition

Securing funds swiftly and conveniently is paramount for all entrepreneurs  to continue essential tasks of their business such as launching or growing their ventures. These funds also facilitate key functions like recruitment, infrastructure development, equipment acquisition, and inventory management. However, sometimes entrepreneurs find themselves in situations where accessing loans becomes indispensable to maintain operational continuity and drive sustainable growth.

However, traditional loan origination processes, starting from applying for the loan to getting it disbursed in one’s account, comes with a few hindrances. They are cumbersome and long-drawn out because of all the paperwork and multiple steps involved. The resulting delay in fund acquisition can significantly impact entrepreneurs, disrupting meticulously planned business operations and leading to financial losses.

The only way to avoid this is for lenders to simplify lending, and make it as transparent as possible. Transparency promotes a healthy environment in which trust is built between the lender and the entrepreneur. For example, if the credit score of the entrepreneur as well as their credit history is made available to the lender at the click of a button, the lending institution can quickly assess it and move forward with the application. And when the entrepreneur seeks a loan later, the lender can be assured of the fact that the interest payments and loan repayment will happen according to schedule. This trust is what will foster long-lasting formal relationships that are often the cornerstone of a great business ecosystem. The entrepreneur is then able to make informed decisions for themselves and the business, with regards to how to move forward financially. This structure can be built and enabled by embracing digitalisation.

Digital loan processes have not only made handling and accessing documents easier, but they have also brought in an element of security. Cloud-based data storage ensures that the personal details of the entrepreneur, including their KYC and other relevant documents are safely stored for future use. This was missing in the traditional system where documents were at the risk of getting damaged or lost.

Transparent processes help streamline the process and make it as straightforward as possible. In today’s world, traditional loan origination has been replaced by digital loan origination, which promotes this kind of transparency. Through the use of SaaS (Software as a service (SaaS) which allows users to connect to and use cloud-based apps over the internet), digital loan origination uses clear steps, automated real-time updates on application status, customer support and a robust feedback mechanism to make the communication process between the lending organisation and the entrepreneur as transparent as possible. This in turn, leads to quick approvals, which is a win-win for the former as well as the latter.

Lending platforms that have gone digital use intuitive and interactive online portals and apps where entrepreneurs can easily submit their loan application. They are user-friendly and guide applicants from the beginning till the end. The eligibility criteria on these platforms are as transparent as they can be, so that the entrepreneur knows whether to proceed or not in the first go itself. They do not have to wait for weeks to get a rejection letter, which happens in the case of traditional loan acquisition. FAQs (Frequently Asked Questions) and Help Centres present on these pages also guide the entrepreneur in understanding how to proceed with a loan application, in terms of what to do and what not to do. In most cases, the document verification happens instantly, which makes things even easier.

Transparent loan acquisition plays an important role for entrepreneurs seeking to expand their business footprint. Quick fund disbursal makes the day-to-today operations smoother, drives innovation and helps them scale growth in a lesser amount of time. Entrepreneurs also get a fair sense of how prepared they should be, vis-a-vis what documents to arrange, what information to possess beforehand so that they can foresee difficulties and avoid them beforehand. By streamlining the loan acquisition process and keeping it transparent and open, lenders can become a true partner in an entrepreneur’s business journey. This encourages them to chase their dreams and fast-track the overall economic growth of the country. Lenders can thus contribute to a thriving ecosystem of innovation by committing to transparency, and pledging to always keep communication lines open with the entrepreneur who is seeking a loan.