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The online financing platform for SMBs market size is forecast to increase by USD 14.34 billion at a CAGR of 16.64% between 2023 and 2028. The online financing platform market for Small and Medium-sized Businesses (SMBs) is experiencing significant growth due to several key trends. Firstly, the increase in lending to SMBs is driving market expansion, as traditional financial institutions recognize the potential of this sector. Additionally, the rise in growth of SMBs themselves is creating a larger customer base for these platforms. However, privacy and security concerns remain a challenge, as sensitive financial information is exchanged online. Platforms must prioritize strong security measures to build trust and attract customers. Overall, the online financing platform market for SMBs is poised for continued growth, driven by these trends and the increasing demand for convenient and efficient financing solutions.
Online financing platforms for Small and Medium-sized Businesses (SMBs) have revolutionized the lending landscape by providing an alternative to traditional banks. These platforms cater to borrowers from various sectors, including individuals and institutional investors, using technology, data analytics, and automated processes to streamline the lending experience. Term loans and lines of credit are popular financing options offered by these platforms, enabling businesses to access the necessary capital for expansion, inventory systems, or working capital. Technology plays a crucial role in these platforms, with data analytics providing insights into borrowers' creditworthiness and risk profiles. Alternative lending platforms have material environmental benefits, with an increasing focus on carbon-neutral properties, digital fabrication, and building design using technologies like Cross-Laminated Timber (CLT) and Computer Numerical Control (CNC) machining.
Furthermore, these technologies contribute to construction efficiency, precision, and versatility in design, leading to energy-efficient homes and offices. Public sector investment in these platforms is on the rise, driven by the growing importance of environmental responsibility and the need for physical spaces that align with the latest trends in design and technology. company analysis is a critical aspect of these platforms, ensuring that lenders and borrowers engage in fair and transparent transactions. Credit access remains a priority, with alternative lending platforms offering flexible solutions tailored to the unique needs of SMBs.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The equity financing segment is estimated to witness significant growth during the forecast period. The online financing platform for Small and Medium-sized Businesses (SMBs) exhibits structural and fire-resistance properties that make it a preferred choice for various application scopes. These properties enable the platform to support industry applications in residential, commercial, and public infrastructure sectors. The strength, versatility, and sustainability of the platform align with sustainable construction practices and green buildings. Established players and emerging companies in the construction industry are integrating digital fabrication techniques to enhance the platform's quality and sustainability credentials. The platform's application extends to construction projects involving concrete, steel, timber, and renewable resources. By reducing carbon footprint and acting as a carbon sink, the platform contributes to environmental benefits.
Furthermore, the platform's customization and construction process adaptability lead to project completion times that are more efficient than traditional methods. The durability of multi-story buildings designed using this platform is a significant advantage, ensuring long-term investment value. Architectural possibilities are endless, with international building codes and safety profiles ensuring safety and adherence to building codes. Despite the high initial costs, the platform's long-term benefits, including energy efficiency and reduced maintenance, make it a worthwhile investment.
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The equity financing segment accounted for USD 4.40 billion in 2018 and showed a gradual increase during the forecast period.
North America is estimated to contribute 41% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The digital economy in North America is witnessing significant growth, driven by the increasing adoption of alternative lending platforms that cater to the financing needs of borrowers, including individuals and small and medium-sized businesses (SMBs). These platforms leverage technology, data analytics, automated processes, and the participation of institutional investors to provide term loans, lines of credit, invoice financing, equipment financing, and merchant cash advances. The demand for faster approvals and disbursements, coupled with competitive interest rates, has fueled the growth of this market. Blockchain technologies, risk assessment, and fraud detection tools ensure transaction security and reliability. The market is witnessing innovation in various sectors, such as construction, where digital fabrication, building design using CLT and CNC machining, and carbon-neutral properties are gaining popularity.
Moreover, the streamlining of operations and access to capital for startups and micro-loans are further driving market growth. Despite limited collateral and strict criteria, these platforms offer a viable alternative to traditional financing methods. The potential material environmental benefits of digitalization and construction efficiency add to the attractiveness of online financing platforms for SMBs in North America.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Increase in lending to SMBs is the key driver of the market. Online financing platforms have emerged as a viable solution for Small and Medium-sized Businesses (SMBs) in the wake of stricter regulatory capital adequacy requirements, resulting in reduced loan funding from banks and financial institutions. These technological advancements offer various financing options such as marketplace loans, merchant and e-commerce finance, invoice financing, supply chain financing, and trade financing. These structural properties of online financing platforms provide SMBs with easier access to working capital, versatility, and sustainability, making them applicable to various industry applications, including residential, commercial, and public infrastructure projects. The strength and durability of these platforms enable multi-story building construction and architectural possibilities, adhering to international building codes and safety profiles.
Additionally, online financing platforms promote sustainable construction practices and green buildings through digital fabrication techniques, customization, and adherence to sustainable building practices. Despite the high initial costs, the environmental benefits, including reduced carbon footprint and carbon emissions, make online financing platforms a carbon sink for the construction industry. Established players and emerging companies continue to expand their quality and sustainability credentials in this new market, ensuring project completion times and durability.
Rise in growth of SMBs is the upcoming trend in the market. Online financing platforms play a crucial role in supporting the growth and development of Small and Medium-sized Enterprises (SMBs), particularly in the construction sector. These platforms offer structural and fire-resistance properties, ensuring the durability and safety of construction projects. The application scope of online financing extends to various industry sectors, including residential, commercial, and public infrastructure. Sustainability is a significant consideration in modern construction practices, and these platforms support sustainable building practices through financing for green buildings and projects utilizing renewable resources, such as concrete, steel, timber, and digital fabrication techniques. Established players and emerging companies in the financing industry offer quality services and sustainability credentials to attract clients.
Furthermore, new markets and high initial costs are challenges that online financing platforms address, providing environmental benefits and reducing carbon footprint through efficient construction processes and project completion times. The versatility of these platforms allows for customization and adherence to international building codes and safety profiles, ensuring the strength and architectural possibilities of multi-story buildings.
Privacy and security concerns is a key challenge affecting the market growth. Online financing platforms for Small and Medium-sized Businesses (SMBs) exhibit structural and fire-resistance properties that make them a valuable addition to the construction industry. These platforms' application scope extends to various sectors, including residential, commercial, and public infrastructure projects. Their strength, versatility, and sustainability align with sustainable construction practices and green buildings, which are increasingly popular due to their environmental benefits and reduced carbon footprint. Established players and emerging companies in the construction sector are integrating digital fabrication techniques to enhance customization and streamline construction processes, leading to shorter project completion times. The use of renewable resources, such as concrete, steel, and timber, in conjunction with online financing platforms, further enhances their sustainability credentials.
Furthermore, multi-story buildings, which require significant financial investment, can greatly benefit from online financing platforms. These platforms' durability and design possibilities offer architectural possibilities that adhere to international building codes and safety profiles, ensuring safety and adherence to building codes. As the construction industry continues to evolve, online financing platforms will play a crucial role in shaping the future of sustainable and efficient construction practices.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
American Express Co. - The company offers online financing platform for SMBs such as Kabbage Checking and Kabbage Funding.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Online financing platforms have revolutionized the way small and medium-sized businesses (SMBs) access capital in the digital economy. These platforms connect borrowers with lenders, including individuals and institutional investors, through technology-driven marketplaces. Borrowers can apply for various financing options such as term loans, lines of credit, invoice financing, equipment financing, and merchant cash advances. Technology, data analytics, and automated processes enable faster approvals and disbursements with competitive interest rates. Sectors like construction, manufacturing, and technology are major beneficiaries, with sectors like materials, carbon-neutral properties, digital fabrication, building design, CLT, CNC machining, and construction efficiency gaining traction. Alternative lending platforms streamline operations by providing access to capital with fewer strict criteria and limited collateral requirements.
Furthermore, blockchain technologies ensure transaction security, risk assessment, and fraud detection, enhancing the reliability of these platforms. Startups and micro-loans are also catered to, offering equity financing and debt financing options. The digitalization of financing is a game-changer for SMBs, enabling them to focus on their core business while leaving the financing process to the experts.
Market Scope |
|
Report Coverage |
Details |
Page number |
145 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 16.64% |
Market growth 2024-2028 |
USD 14.34 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
15.95 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 41% |
Key countries |
US, China, Japan, UK, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
American Express Co., Biz2Credit Inc., Enova International Inc., Fidelity National Information Services Inc., Finastra, Fintech OS Srl, Funding Circle Holdings plc, Kaleidofin, LendingClub Corp., Lendingkart Finance Ltd., Niyogin Fintech Ltd., Novac Technology Solutions, Numerated Growth Technologies Inc., Prosper Funding LLC, RupeeCircle, SoFi Technologies Inc., Sopra Steria Group SA, Stripe Inc., UAB HES Europe, and Versara Lending LLC |
Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Vendor Landscape
11 Vendor Analysis
12 Appendix
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