Article
Bank
Embedded lending

SME Financing: Comparing Daylit and Bank Loans

Learn how Daylit offers fast, flexible, and transparent capital solutions, freeing SMEs from bank paperwork, hidden fees, and rigid terms for business growth.

Jared Shulman
September 11, 2024

Why should I use Daylit instead of a Bank?

When comparing Daylit with a bank loan, start with the amount, timing and purpose of the funding. The appropriate option depends on the written offer and your business’s needs.

In this post, we will share several use cases that our clients have flagged as key benefits to using Daylit’s fast, affordable capital tools instead of relying on traditional banking relationships.

1. Freeing Your Team from Tedious Paperwork

How many hours does your finance team spend communicating with banks? This goes beyond the initial credit approval process and continues throughout the year:

• Providing constant updates on “proof of business” documents

• Periodically generating draft financial statements

• Explaining fluctuations in business performance

• Submitting buyer and supplier contact lists for background checks

• Preparing cargo receipts and invoices for loan drawdowns

This manual, time-consuming process is central to how banks assess your business. Even after months of paperwork and approval, the burden doesn’t end—each new funding checkpoint brings these processes back.

Daylit uses business data in its financing process. Compare the required documents, integration work and expected decision and funding dates for the specific offer; neither a minutes-long approval nor a months-long bank process is universal.

Plus, your employees won’t need to learn new systems—everything is managed within your existing ERP, with every invoice seamlessly linked to funding.

Transparent, fair pricing can be so refreshing.

2. Transparent, Fair Pricing

Think a prime rate from the bank is the only cost you’re paying? Consider these hidden fees:

• Handling commissions, small bill charges, commitment fees, service charges, annual review fees, third-party vendor fees, foreign exchange fees, and more.

Additionally, have you accounted for indirect costs like:

• Holding security deposits

• Purchasing bundled investment or insurance products

• Committing to move certain funds through the bank

At Daylit, AI handles the heavy lifting, so we don’t need an extensive back-office team, and we don’t attach unnecessary strings. That’s why our pricing is straightforward and fair. Our AI also learns about your business over time, ensuring your pricing reflects the true nature of your operations.

3. Flexible Terms with Fewer Restrictions

Banks operate with limited flexibility and often require various guarantees and covenants, such as:

• Personal or corporate guarantees

• Pledging real estate assets

• Notifying trade partners about borrowing arrangements

• Restrictions on repayment dates

• Prohibitions on early repayment

• Monthly onsite audits and strict financial ratio adherence

Compare collateral, guarantees, covenants, repayment dates and total fees in each written offer. Daylit’s terms depend on the approved product and agreement; do not assume that financing is unsecured or without conditions.

The Daylit Advantage

Choose the financing arrangement that fits the cash forecast and whose costs and obligations you understand. Ask Daylit and the bank for comparable written terms before deciding.

{{accelerate-growth-with-working-capital}}

Further reading

KPMG analyzes cash conversion cycles by industry and company size. See KPMG’s analysis.

Related guidance: The Lemon Problem: How Lending Data Affects Pricing; Agricultural Lending: Data and Credit Risk.

References

Legal

See the solution →
Insights

You might also like...

VP of finance reviewing a cash flow forecast at a conference table
Cash Flow Forecasting Software: What It Does and How to Evaluate Accuracy
What cash flow forecasting software actually does, and how to judge whether its accuracy claims hold up — including the MAPE metric vendors rarely volunteer.
Read more
Cash Flow Forecasting Software: What It Does and How to Evaluate Accuracy
Accounts Receivable Automation
AR manager on a headset call reviewing a dispute file
How to Build an Invoice Dispute Management Process That Doesn't Delay Cash Flow
How to build an invoice dispute management process with clear ownership, resolution steps, and the KPIs — like cycle time and resolution rate — that show whether it's working.
Read more
How to Build an Invoice Dispute Management Process That Doesn't Delay Cash Flow
Accounts Receivable Automation
AR manager reviewing an aging report at a standing desk
Days Sales Outstanding (DSO) Formula: How to Calculate It and Avoid Common Mistakes
The DSO formula explained with a worked example — plus the two mistakes (seasonality and confusing it with AR turnover) that most often distort the number.
Read more
Days Sales Outstanding (DSO) Formula: How to Calculate It and Avoid Common Mistakes
Accounts Receivable Automation
Accelerate growth with working capital

Learn how Daylit's products can help you manage your cash flow.

Button
Button