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How business lending uses open banking

Antonis Kazoulis
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Last editedMay 20232 min read

Open banking has become increasingly important in business lending, and many businesses are now taking advantage of this technology to access more funding opportunities. In this blog post, we will discuss the importance of open banking in business lending and how it can help businesses to grow.

Importance of open banking in business lending

Access to more funding options

Open banking allows businesses to access a wider range of funding options. Traditional lenders like banks and credit unions have strict lending criteria, which can be difficult for small businesses to meet. With open banking, businesses can access a wider range of lenders and financial products. This gives businesses more options and increases their chances of getting approved for funding.

Streamlined application process

Open banking also streamlines the application process for business loans. With open banking, businesses can provide lenders with access to their financial data in real time. This eliminates the need for businesses to manually provide financial statements and other documentation, which can be time-consuming and cumbersome. The streamlined application process means that businesses can get approved for loans faster, which is critical when they need funding quickly.

Improved credit scoring

Open banking can also improve the credit scoring process for businesses. Traditional credit scoring methods rely on historical financial data, which may not accurately reflect a business's current financial situation. With open banking, lenders can access real-time financial data, which provides a more accurate picture of a business's financial health. This can result in better credit scores for businesses and lower interest rates on loans.

Better financial management

Open banking also enables businesses to manage their finances more effectively. By providing third-party providers with access to their financial data, businesses can get a complete view of their financial situation. This allows businesses to identify areas where they can cut costs and make better financial decisions. Better financial management can help businesses to improve their cash flow and profitability, which is essential for growth.

Future of business lending

Here's how open banking is set to revolutionise business lending in the future.

Faster loan processing

Traditionally, business loan applications were time-consuming, requiring a lot of paperwork and documentation. With open banking, the process is becoming faster and more efficient. Instead of manually inputting financial information, open banking allows lenders to access a business's financial data through secure APIs. This streamlines the application process, reducing the time it takes to process a loan application.

Improved loan decisions

Open banking provides lenders with access to more detailed financial data, giving them a better understanding of a business's financial position. This data can be used to assess creditworthiness more accurately, resulting in better loan decisions. As a result, lenders can offer loans to more businesses while managing their risk effectively.

More competitive interest rates

With open banking, lenders can access a business's financial data more easily, allowing them to offer more competitive interest rates. The ability to access real-time financial data means that lenders can assess risk more accurately, resulting in lower interest rates for businesses that pose less risk.

Greater transparency

Open banking provides businesses with greater transparency when it comes to the lending process. By accessing their financial data, businesses can see exactly how their financial information is being used to make lending decisions. This transparency helps build trust between lenders and borrowers, which is essential for a healthy lending relationship.

Increased access to finance

Open banking is set to increase access to finance for small and medium-sized businesses. With a more efficient lending process, companies that would have previously struggled to access finance will now have more options. This increased access to finance is likely to stimulate growth in the SME sector, creating new jobs and driving economic growth.


Open banking technology is transforming business lending by making the lending process faster, more efficient, and more accessible. It offers numerous benefits to lenders, borrowers, and the economy as a whole, including more accurate risk assessment, personalised lending products, and increased competition.

As the financial services industry continues to evolve, open banking technology will play an increasingly important role in shaping the future of business lending. By embracing this technology, lenders and borrowers can take advantage of the many benefits it offers and drive business growth and development.

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