June 17, 2015
News hit yesterday that Goldman Sachs, the massive investment bank that typically works with multi-million (and billion) dollar businesses, is positioning itself to make much smaller loans to small businesses and individuals. Reported by The New York Times, Goldman Sachs is apparently hoping to launch this service as of early 2016.
Rather than provide store front or bank tellers to facilitate the transactions, Goldman Sachs’ new program will be completely online and through apps which lowers Goldman’s operating expenses. A spokesman for the company says that this will enable them to offer better interest rates on loans than traditional financial institutes.
Will this make it easier for entrepreneurs to get capital for their businesses? Will this added competition make banks loosen up on who they’re willing to loan to? It’ll be interesting to keep an eye out on how this plays out and it’s impact – positive or negative – on small businesses.