Case #6

1. Tech firms such as Square are moving onto the turf of traditional banks, not only with online

payment services but also in the banks' core business of loans. Square loans are funded by

investors, so they charge higher interest rates or fees than loans from banks, which are funded

by low-cost deposits.

2. The tech firms can take advantage of their vast troves of customer data. For example, PayPal

Holdings, for instance, has made more than $6 billion in small business loans since 2013, using

data it collected while processing payments for Internet retailers.

3. Advantages would be that you can get your loan in a matter of days, application takes a few

clicks, 10-16% of loan amount added on top if paid later than 18 months. Disadvantages would

be bad customer service, interest rates vary and are charging extra due to the speed of the loan

being accepted, not good for large and long-term loans.

4. Personally, I would see how much money I would need at first then after determining the

amount of the loan if a small one then id proceed to see the interest rates of each company and

the date of repayment to understand how much time I would have. Lastly, I will see if the small

loan will make a positive impact on the business etc.