Smart phones are becoming ubiquitous mobile gadgets allowing individuals and businesses to complete numerous transactions 24/7/365 from anywhere. Small business loans are a market that has not been fully developed with respect to online lending. Learn why more strict financial regulations are pushing community banks to offer online lending for SMBs.

Originally, all banks were local. There were even strict regulations prohibiting banking across state lines after the Great Depression. The fear was that if national banks failed, it could destroy the entire financial system. Of course, that was the same fear articulated during the 2008 Sub-Prime Mortgage Crisis.

Local banks have an advantage with respect to their community focus. They can shake the hands of the local barber, farmer or plumber and discuss their needs for raising money. This community focus allows for small business loans that are beneficial for the lender, borrower and community.

Gradually, local banks began to expand with the relaxation of regulations during the 1990s. The community focus has not been lost, the majority of small business loans are still provided by the local banks. After the Sub-Prime Mortgage Crisis, tighter financial regulations were established which are now pinching the profit margins of many local banks.

Now, paperwork can be so costly at local brick and mortar banks that the small business loans are simply not profitable. What is the answer? Perhaps, online lending can be used to kill two birds with one stone.

By making a more affordable streamlined process, the community banks can create a cheaper online lending format that might be up to 75% lower. This allows for SMBs to continue receiving funding, while improving their technological accessibility.

Many SMBs are owned by single proprietors. They can now complete the online loan process faster and receive the cash infusions to keep their business growing more rapidly. As small businesses hire more workers – the entire nation benefits.

The World Wide Web continues to change how businesses are run. Affordable, accessible and simple online loan application forms are a key benefit. Most individuals are simply sick and tired of filling out the same long, tedious applications in triplicate. SMB online finance is a win-win for all parties.