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MonJa’s Digital Banking and Lending Monthly Roundup – Why Subscribe?
Digital banking and lending are evolving rapidly. Recent fintech-banking partnerships and innovation in technology with the introduction of AI, ML and blockchain herald a new era in lending. Fintech’s are changing the competitive ecosystem, empowering lenders to process loans faster and smarter. In a world full of noise, understanding how the technologies and developments may impact your financial institution’s credit decisions and credit portfolio is of critical importance, while also you can improve your finance by learning online trading, as there are resources like trade fx that help you with this. With MonJa’s Digital Banking and Lending Monthly Roundup, it’s easy to stay up to date on what’s happening in the space. Get the latest updates, analysis and commentary on digital banking and lending segment!
02/24/23 High Interest Rates At Banks Make Alternative Lenders More Attractive For Small Business Borrowers (Forbes)
As interest rates for SBA and traditional term loans increase, non-bank lenders are becoming a more appealing option for companies seeking working capital. Although non-bank lenders offer slightly higher rates, borrowers are drawn to their quicker and more reliable funding options. Long-term interest rates, inflation, and employment rates are subject to changes due to economic and financial disruptions, and the Federal Reserve’s monetary policy helps stabilize the economy in response. Business owners were hoping for interest rate hikes to end in early 2023, but it seems unlikely that this will happen soon. Therefore, those who require working capital for expansion should consider applying for financing as soon as possible, preferably before March, to take advantage of current rates before they rise again.
02/24/23 U.S. business equipment borrowings grow 6% in January – ELFA (Reuters)
Despite various ambiguous and contradictory economic indicators such as inflationary pressures, escalating interest rates, a thriving labor market, and abating supply chain disruptions, the demand for equipment financing by businesses remains strong. Borrowing for equipment investments in January increased by 6% compared to the same period in the previous year, according to the Equipment Leasing and Finance Association (ELFA). In February, the Equipment Leasing & Finance Foundation reported a confidence index of 51.8 for the industry, which marks an improvement from January’s score of 48.5. A reading above 50 is considered indicative of a good business perspective.
02/23/23 Mortgage Forecast Lowered for Spring and Summer, MBA Data Shows (Credit Union Times)
The Mortgage Bankers Association’s most recent monthly forecast revealed its economists anticipate a less severe first-half recession than they had previously predicted. However, they also anticipate a further decline in originations during the spring and summer months. Typically, a downturn in gross domestic product for two consecutive quarters is considered an indication of a recession. The Mortgage Bankers Association’s forecast for February predicts that existing home sales will continue to decline in comparison to the previous year until the third quarter, while new home sales are expected to decrease until June. The forecast also anticipates a drop in fixed rates for a 30-year mortgage from 6.4% in Q1 to 5.7% in Q3 and 5.3% in Q4. Additionally, the predicted price increase for existing homes is expected to be slower than what was forecasted a month earlier. MBA anticipates that a mix of economic ambiguity, elevated mortgage rates, and persistent affordability difficulties will have an impact on purchase demand. This impact is expected to be more significant for the lower end of the market, where the supply is still constrained.
02/22/23 Small Business Financing Trends to Watch (Business News Daily)
Small businesses have faced challenging few years, but those that have persevered and adapted to the circumstances have been able to survive. As the pandemic and associated restrictions subside, there is a surge in demand for goods and services, which is beneficial for small businesses. However, to take advantage of this opportunity, small businesses need to have access to sufficient capital to recruit additional staff and procure necessary supplies to meet customer demands. Small business owners must also consider the following key factors to address their distinct challenges effectively, which include the likelihood of a recession and what its duration will be, how will the accessibility of financing for small businesses be affected, what is the anticipated trend of interest rates for small business financing, will new government initiatives be beneficial for small businesses and how can small businesses effectively manage economic and financing-related changes? Lenders who are cognizant of these issues should focus on devising lending models to facilitate small business growth. This outreach at the right time might allow for building a long term moat around their business.