The financial crisis of 2008 caused global shockwaves, wrecking businesses and wiping away thousands of dollars’ worth of individuals’ savings. World markets are still recovering to this day, and governments have enacted strong reforms to prevent a repeat occurrence. These new, stricter regulations have deeply changed the financial world. Along with shifts in consumer preferences, banks and lenders are now faced with a vastly different financing landscape.
Traditional financial services providers have tightened their lending requirements, leading to tougher barriers for regular customers to find funding. Whereas customers with weaker credit had few problems finding loans in the past, banks are now turning them away in droves. For many small business owners, this harder path to access financing through loans means that they are left with few channels to uncover the capital they need. However, developments in financial technology and online lending offer small businesses a new alternative in the form of lending as a service, or LaaS.