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The online financing platform for SMBs market size is estimated to increase by USD 14.34 billion and grow at a CAGR of 16.64% between 2023 and 2028. The market's growth hinges on several pivotal factors, including heightened lending to SMBs, facilitating faster credit access for borrowers, and efficient management of inventory systems and working capital. However, challenges persist, notably privacy and security concerns surrounding online debt financing platforms. Additionally, assessing long-term viability is hindered by escalating competition from traditional banks and alternative lenders. Moreover, there's a prevailing lack of awareness among end-users regarding the functionality and benefits of online debt financing platform software. Overcoming these obstacles demands innovative solutions and heightened education efforts to instill trust, enhance security measures, and enlighten stakeholders about the advantages of embracing digital lending platforms for streamlined financial operations and sustainable business growth.
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The equity financing segment is estimated to witness significant growth during the forecast period. Equity financing is marketing an ownership interest in a business in exchange for capital. The most basic hurdle in obtaining equity financing is finding investors ready to buy the business. The share of equity financing that a borrower takes has to share management control with the investor appeal of the business. By selling equity interests in the business, the borrower sacrifices some of his autonomy and management rights.
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The equity financing segment was the largest segment and was valued at USD 4.40 billion in 2018. The effect of selling a big percentage of the ownership interest of the business may lead to short-term investment unless the borrower retains a majority interest in the business and control over the future sale of the business. Many small business operators are not interested in maintaining their business indefinitely, and their personal motives for pursuing a small business will determine the value position upon business ownership. Thus, it is expected to grow at a moderate rate during the forecast period.
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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. The rising awareness to make a more financially inclusive system, particularly for those who may not have access to traditional mediums, has improved the demand for online financial services in the region. Moreover, the increasing demand for loans for a business, growing Internet penetration, and technological advancements have improved the demand for online financing platforms, and the presence of prominent market players are the key factors driving the growth of online financing platforms for small to medium-sized businesses (SMBs) market in North America during the forecast period.
The Online Financing Platform for SMBs revolutionizes financing options for small and medium-sized businesses (SMBs), offering a comprehensive suite of financial services. By leveraging alternative lending platforms, borrowers gain faster credit access while lenders and institutional investors find lucrative investment opportunities. Powered by technology, these platforms utilize data analytics and automated processes to provide tailored solutions like term loans and lines of credit. They cater to various sectors and prioritize carbon-neutral properties and energy-efficient homes to promote environmental responsibility. With a focus on construction efficiency and precision through digital fabrication and CNC machining, they enhance building design and structural properties, offering versatility in design for public sector investment and optimizing physical spaces. Moreover, they facilitate the increase in lending to SMBs, empowering businesses to manage inventory systems and working capital effectively. 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.
Borrowers with faster credit access is the key factor driving market growth. In the online financing platform for small to medium-sized businesses (SMBs) market, Crowdfunding and online lending platforms provide loans to underserved borrowers such as SMBs, who are incapable of getting money from established banks and financial institutions. SMBs are connected with higher risks since they lack high-quality collateral and extended credit histories. This trend highlights the growing importance of alternative financing methods like Crowdfunding, which facilitate quicker access to funds for SMBs, thereby addressing gaps left by traditional lending channels. As such platforms expand their reach and services, they contribute significantly to the growth and accessibility of financial solutions in the SMB sector during the forecast period.
Furthermore, through consistency, automation, and openness, this realistic pricing procedure for goods and solutions will aid in the management of individual portfolios and the avoidance of firm-wide threats. Such factors are expected to drive the growth of the market during the forecast period.
The rise in growth of SMBs is the primary trend shaping market growth. SMBs are important in most economies, particularly in developing nations. SMBs make up the extensive majority of enterprises across the globe, and they play an important role in employment creation and global economic development. They account for around 90% of enterprises and more than 50% of global employment.
Moreover, SMBs produce the majority of formal jobs in developing countries, accounting for seven out of every ten jobs created. Thus, the growing importance of SMBs and their role in improving economies and employment is expected to positively impact the growth of decentralized finance during the forecast period. DeFi platforms offer innovative financial solutions that empower SMBs by providing access to capital, liquidity, and financial services without traditional intermediaries. This decentralized approach supports economic inclusivity, particularly in regions where SMBs play a pivotal role in job creation and economic growth.
Privacy and security concerns is a challenge that affects market growth. In many developing nations, the concept of online payment is at its nascent stage. Mass-market customers are unaware of the benefits of using such technologies, which is hindering online financing platforms for small to medium-sized businesses (SMBs) market growth. In addition, payment service providers gather personal data and information about customers to customize target key audiences and advertising messages. However, the indiscriminate use of this data can infringe on user privacy.
Furthermore, location-based services also result in privacy issues as such services operate on the basis of real-time, geo-based information. The data gets collected, processed, and stored by Alternative Finance providers in the online financing platform for small to medium-sized businesses (SMBs) market, which thus remains open to privacy infringement. Thus, such risks make consumers adverse to online transactions and may impede the growth of the market during the forecast period. As alternative finance platforms expand their offerings to SMBs, addressing privacy concerns becomes crucial to maintaining trust and fostering adoption of online financial services among businesses and consumers alike.
The market research 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 growth strategies.
Market 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.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market 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.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments
The market thrives on diverse factors such as alternative lending platforms, streamlined operations, and the digitalization of financial processes. These platforms connect individuals and institutional investors, offering term loans, lines of credit, and other financing options. Leveraging data analytics and automated processes, they facilitate faster approvals and disbursements with competitive interest rates, despite strict criteria and limited collateral. Blockchain technologies ensure transaction security, while risk assessment and fraud detection enhance reliability. Such platforms benefit startups and sectors like residential, commercial, and public infrastructure, promoting sustainable construction practices and energy-efficient homes. Despite challenges like high initial costs and lack of awareness, established and emerging players are tapping into new markets, offering quality services with sustainability credentials.
The Online Financing Platform for SMBs offers various financial solutions tailored to small and medium-sized businesses (SMBs). These platforms facilitate invoice financing, equipment financing, and merchant cash advances, empowering SMBs to navigate the digital economy and streamline operations while gaining access to capital. They provide options like micro-loans and support environmental sustainability with materials offering carbon-neutral properties. Leveraging digital fabrication and CNC machining, they enhance construction efficiency and ensure precision while offering solutions with robust structural and fire-resistance properties. Catering to diverse industry applications, including educational institutes and commercial spaces, these platforms emphasize strength, versatility, and green building practices. Despite challenges like lack of widespread awareness, they contribute to environmental responsibility and economic growth through increased lending to SMBs.
Online Financing Platform For SMBs 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 forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the market 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. |
We can help! Our analysts can customize this market research report to meet your requirements.
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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