Loan Frame at LendIt USA 2017

Loan Frame was started with an aim in mind – help borrowers access the right kind of business finance in the minimum possible time. Towards this end, we are creating the largest SME lending marketplace. We harness the power of technology to make this happen. We want that getting business loans for small businesses should be a quick, easy and transparent process as against the largely slow, painful, and opaque process that it is currently.

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Window Shopping For Small Business Loans Doesn’t Come Free

Window shopping is taken very seriously by some shoppers when they visit markets or malls. This isn’t surprising when it comes without any costs attached. Not so much when you are in the market for a loan for your small business. Each window you stop at ends up making you and your small business a little less credit worthy.

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“We are only as strong as we are united, as weak as we are divided.” – Dumbledore in Harry Potter and the Goblet of Fire

Optimising Your Small Business Loans With ‘Debt Consolidation’

The title quote could apply just as well to your loan book as it does to Rowling’s book! Habitually, borrowers have preferred to borrow from multiple sources, in multiple forms. A Term Loan from Bank ‘A’, a Working Capital Facility from Bank ‘B’, a Loan Against Property from NBFC ‘C’, an Overdraft from Bank ‘D’, and so on. The reasons for doing so are varied: changing needs over time that require additional borrowing, perception that distributing the lender base and type of loans increases borrowing ability, and a false hope that the true extent of leverage cannot be clearly assessed by a new lender.

Some of these reasons may have been valid in a pre-digitisation era and in a time when credit scores and records were not consolidated in one source. However, these perceived advantages have been rendered totally irrelevant now.

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The Post-Demonetisation Borrowing Landscape – Navigating the Changes

The crucial 50 day period following the demonetisation announcement is about to end. This period has been characterised by economic convulsions, adjustments, and apprehension about the future. The difficulties that businesses small and large have faced in this time are real and well known. However, the feelings of apprehension are as real for lenders as they are for borrowers.

Following demonetisation most lenders have gone into wait and watch mode as their risk appetite has gone down even as borrower risk profiles have gone up. According to RBI data , credit or loan growth for the fortnight that ended November 25 – the first reporting fortnight after demonetisation – declined to 6.6% from 7.9% on a year-on-year basis in the previous fortnight, i.e. before the demonetisation announcement. This is nearly half of the long period loan growth rate of 12.9% between 2012 and 2016. In the fortnight ended December 11 (the latest available), YOY growth dropped even further to 5.7%.

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