Originally, fintech tools were designed for the consumers, covering a lot of fields from saving money apps to automatic advisors and online-only financial institutions and banks. As the industry evolved, fintech started helping small businesses, too.
Since 2013, fintech apps have raised over $10 billion and helped hundreds of businesses with less than 100 employees. That’s irrefutable proof of the potential of fintech in the world of small businesses.
Fintech tools differ from one another. However, at the core, these tools all focus on automation of the work, personalized financial products, and boosting financial operations.
Boosting Finance Operations
Small businesses must have significant capital to emerge in the respective market and evolve. The growth of such companies experienced a hiccup in 2018 when, as reported by many owners, most small businesses required external finances to stay on the right track.
Fintech helped with personalized small business loans, fundraising, and even specifically oriented credit cards for business owners. Alternative financing options are also available for small businesses, thanks to the still-growing fintech industry. Most fintech firms focus on combinations of equity and loan fundraising.
Fintech Apps for Accounting Automation
Accounting is crucial for any business. Without a clear view of your finances as a business owner, you cannot foresee the direction your company is headed in.
Fintech apps are helpful, even though they cannot replace real-life professionals yet. The best part is that fintech apps for accounting automation can streamline the financial workload.
Most of these applications are computer programs that help business owners manage invoices, expenses, salaries, and so on. At the moment, there are several startups that offer owners the possibility of issuing virtual credit cards for their employees, which allows them to approve and track expenses and cash flow in real-time.
Promoting Online Payments
Modern payment solutions helped many small businesses compete with larger companies. The fintech industry is also helpful in this aspect, providing dozens of reliable solutions for small business owners to use.
With the emergence of the internet, more and more financial institutions and companies turned to the online universe. Nowadays, there are several reliable companies that provide trustworthy online payment processing.
Small businesses can work with people from around the world and sell their services and goods worldwide without worrying about cash flow. With dozens of online solutions, like PayPal, Shopify, Square, and others, small business owners can boost their commerce sky-high and accept credit and debit cards, as well as payments from around the world.
New Business Insurance Models
Fintech also revolutionized the classic insurance model. Just like in the case of the other aforementioned aspects, the fintech industry’s new business insurance models are meant to help small businesses.
Purchasing Policies and Insurance
In short, purchasing a policy is now much more straightforward and affordable thanks to fintech. These new models are just in the beginning stages, and only 25% of small business owners bought an online insurance policy.
However, according to a report, more than 65% of the owners will purchase online insurance in the future.
Thanks to the fintech industry, insurance products became more affordable and accessible. In addition, these products are customizable to suit the demands of small business owners.
Promoting New Retirement Options
Small businesses want to compete with larger companies, but some of them lag behind their more significant counterparts. Offering services for the employees that are similar to those provided by large businesses is always challenging.
Fintech is also helpful in this aspect, as it promotes new retirement options. The latest statistics revealed that only 40% of small businesses provide retirement benefits for their employees. That’s not good news for people working in those companies.
Luckily, fintech tries to tackle this issue by lowering the costs of retirement plans and making them easier to manage and administer. Ubiquity Retirement, for instance, offers flat-fee retirement plans for small businesses with less than 100 employees.
In conclusion, small businesses have to struggle with lots of challenges to compete with their larger counterparts. Luckily, fintech is evolving and is focusing on providing a lot of benefits for small companies, ranging from lower costs for different services to new business models.