Big Data is set to play a massive role in the rejuvenation of small business lending throughout the world. As traditional banks slowed their application approval rates following the financial crisis, alternative lenders took charge and provided a new outlet for SMEs to access working capital.

One of the biggest challenges for small business owners looking to borrow is their inability to convince a bank that they are financially responsible because they have little-to-no credit history. Now, alternative financers are utilizing Big Data analytics tactics to assess the creditworthiness of an entrepreneur from something other than a FICO score.

The use of data analytics, proponents say, allows borrowers to access loans they may not have otherwise been able to access. But industry experts are sounding the alarm on the process as one that is opaque and legally untested.