Alternative lending is looking more attractive to SMEs working to find affordable funding solutions for their business. According to Medici, alternative lending is focused on commerce and not credit. For example, “PayPal offers working capital loans to small businesses that transact more than $20,000 within 12 months.”

According to a report by Medici, VC funding for alternative lending startups have grown from $26.64 million in 2010 to $1.56 billion in 2017. Alternative lenders have developed low-risk business models, which result in low-interest initiatives for lendees and unmatched customer experience. 

In addition, fintech and disruptive technologies are playing a major role in alternative lending. These tools allow for more accurate creditworthiness assessments, and rapid loan decisions.