Too Many Cash Flow Management Tools? Business Blueprint Looks to Address InefficienciesApril 24, 2023
“One of the bigger things [small business owners] realize is, ‘Wow I spent so much time on the financial, the back office, and not what I love, not what initially drew me to starting a business,’” said Brett Sussman, VP of Marketing & Sales for Business Blueprint and Banking at American Express.
American Express recently conducted a survey with 1,100 small business owners that found that more than three quarters were looking to consolidate their cash flow management tools. That’s because they are often forced to rely on multiple tools to manage and project their cash flow, which uses up valuable time and impacts their ability to just focus on their business.
“What’s happening is in today’s uncertain economic climate small business owners are seeking this visibility and there used to be an expression that ‘cash is king,’ I now think it’s moved to ‘cash flow is king,’” said Sussman.
The survey participants included business owners with anywhere from fewer than 10 employees to 500 employees, spanning various industries. The survey revealed that 60% of SMBs use between two to three cash flow management products currently, with 62% spending 5 hours a week on various platforms and 18% spending even more time. It also showed that consolidating cash flow management products onto one platform would help build confidence among business owners and reduce the time they spend on these tasks.
The cost of tools themselves is also a concern. The data revealed that 36% want more affordable pricing.
“Price is certainly a consideration here and there are out there free cash flow management tools, and that’s something that we’re currently offering with Business Blueprint from American Express,” Sussman said.
Unsurprisingly, American Express is addressing their own findings through Business Blueprint. Among the key benefits of their cash flow management tool is ease-of-use, interoperability, and that it’s free.
SBA Lifts SBLC MoratoriumApril 11, 2023
It’s official. The SBA is lifting the moratorium on licenses for Small Business Lending Companies (SBLCs), ending the 40-year pause that began in 1982. The SBA is also adding a new type of lending entity called a Community Advantage SBLC while also removing the requirement for a Loan Authorization in the 7(a) and 504 Loan Programs.
The 37-page rule, which is slated to be published in the federal register on April 12th, included the SBA’s analysis of all the comments it had received, including the criticisms. Some argued, for example, that opening up the doors would allow the unscrupulous world of fintech to participate in the market. The SBA was unmoved by this, countering that existing participants already rely on fintech.
“SBA has for many years provided oversite to non-depository entities participating in the SBA business loan programs,” the SBA said. “This includes SBLCs, non-federally regulated lenders (NFRLs), 504 Certified Development Companies (CDCs), and Microloan Intermediaries. In fact, most all lending institutions incorporate the use of financial technology in their delivery of loans and other financial products.”
One such fintech that has been eager to become a participant, issued a prepared statement on the decision earlier today.
“Funding Circle applauds the Biden Administration for ending the SBA’s 40 year moratorium on licensing additional state and SBA licensed and regulated non-depository lenders thus ending its lender oligopoly in favor of competition and innovation,” said Funding Circle. “This is an opportunity for the more than 8,000 community banks and credit unions that don’t offer 7(a) loans to partner with Fintech lenders to offer affordable loans quickly in underserved communities. Congress should now focus on ensuring SBA has the resources necessary to license more than three new lenders in its SBLC program in order to increase competition and distribution of government guaranteed loans in underserved communities.”
The SBA also published new rules on April 10th that will amend various regulations governing the 7(a) and 504 loan programs.
Why SellersFunding is Now SellersFiMarch 28, 2023
The financial platform dedicated to servicing e-commerce companies is now going by the name, SellersFi. Diversifying the brand beyond their funding capabilities, the rebranding is to bridge the gap between working capital and payment solutions.
Onward with the name change, starting in April they’ll be offering insurance and improving the capabilities of their digital wallet. And in Q3 this year, they’ll be launching FDIC insured business checking accounts for their clients, as well as credit cards. SellersFi will also continue to fund from as low as $25,000 to $10 million, to be the go-to platform for all their customers’ financial needs.
“…working capital and risk management is in our DNA, it’s the core of our business, and we will always be like that,” said Ricardo Pero, CEO at SellersFi. “But that doesn’t mean that we will turn our backs to opportunities to serve our clients in a more efficient way than what they have these days in other segments of the market.”
Clients already can channel their marketplace payouts digitally, so the idea is to offer an under-one-roof, all-in-one solution. They have also added on a product called Invoice Flex where their clients can choose to pay between 3 to 12 installments on their invoice.
“Every time our customers demand solutions and improvements in our platform, we hear them,” said Pero.
“We’re Hiring” But are they really?March 26, 2023
We’ve all encountered folks in the industry that will swear up and down that business has never been better even when everything is falling apart behind the scenes, but apparently businesses in general may go to great lengths to keep up such appearances. One way they do this is by advertising job roles that they won’t actually fill. According to Joe Mercurio, project manager at Clarify Capital, 43% of employers who post ghost jobs aren’t actively trying to fill positions but rather it’s “because they want to keep employees motivated or they want to give off the impression that the company is growing.”
Clarify Capital gleaned this data from a survey it conducted which was then cited in the Wall Street Journal last week. The survey also found that employers have job listings up just to see who might apply, to have an active pool of candidates in case of turnover, or because they simply forget to delete listings for jobs that are no longer available.
According to the WSJ story, titled “Job Listings Abound, but Many Are Fake,” the number of ghost jobs distort hiring demand and applicants across different fields have reportedly found it increasingly difficult to apply for jobs where the employer is actually looking to fill it. The takeaway, perhaps, is that if one is pursuing a new opportunity right now, the presence of job listings may not be enough on its own to indicate which way a company is going. You’ll have to dig a little deeper so that you’re not disappointed.
In The Funding Biz? Here’s What to KnowMarch 9, 2023
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Filling The Funding Gap for Canadian BorrowersMarch 5, 2023
“Generally, capital availability is usually stronger in the U.S., but I would say Canadian businesses are definitely less serviced when it comes to options to be able to access capital,” said Cato Pastoll, Founder and CEO at Loop. “There’s just kind of less services or less products out there for companies so that definitely means that there’s going to be more demand for loan related products.”
One of the lingering challenges in Canada is that the big banks tend to hoard the data that would be valuable to fintechs to service more borrowers, hence the recurring call for open banking.
“If you’re a fintech and you don’t have access to that information, you have to figure out a way to access it from the banks that do hold it,” said Tal Schwartz, Senior Product Manager at Nomis Solutions and Writer at Canadian Fintech. What’s happened as a result is that a whole cottage industry has formed to figure out ways to relay data without APIs.
Cato Pastoll’s company, Loop, is among those that have come up with clever solutions to service Canadian customers. For example, Loop can help Canadian-based companies obtain loans in U.S. dollars to help them grow while also offering other services like expense management tools and cross-border payments.
“A lot of businesses have a hard time getting financing from the bank,” Pastoll Said, “so there’s definitely a few players that do provide different products to help companies be able to access growth capital, working capital, and many of them have been around as long as we have for the last five to ten years or so.”
“So, things that can probably improve in Canada are all related to competition, law, and kind of creating a more equal playing ground between banks and fintechs,” said Schwartz. Although those initiatives seem to be trending in the right direction, it’s been a very a slow march forward.
A Quick Analysis of Bank Data? Kuboon!February 8, 2023
Accessing a small business borrower’s bank statement data is nothing new but Kuboon, not to be confused with kaboom, gives the whole experience an upgrade. A lender can embed Kuboon’s technology into their existing CRM with a simple line of code and be up and running in no time.
According to Kuboon VP of Sales Brysen Partridge, the technology doesn’t necessarily compete with universal tools like Plaid and Finicity because Kuboon actually uses them too.
“So we compare differently because our engines are far more advanced,” said Partridge, “[The big aggregators] give you a small out of the box engine of just giving the transactions and then you have to come up with your dev team to try and filter out and fix and categorize all those transactions and make them into something useful. We do all that for you…”
Partridge said that’s far from everything. “It’s not just bank details,” he said. “We have payroll and ID data. We have other sources that are coming in soon that will provide a ‘complete integrated intelligence.'”
Recognizing that not everyone will embed it, Partridge said that Kuboon can also be used as its own standalone CRM, a feature they call Kuboon Lobby and that many clients choose to use it this way.
Lendica Integrates with Shopify and SalesforceFebruary 7, 2023
Shopify and Salesforce users will now be able to access loan products through Lendica. Now, how does it work? Lendica gives their software to Independent Software Vendors (ISVs) and once installed, their customers will have access to Lendica’s funding products (PayLater, FundNow, and DrawDown).
PayLater is similar to how BNPL works, allowing vendors to delay their payments to a weekly basis. FundNow resembles an accounts receivable product where merchants can get paid up to 90 days ahead of the seller terms offered from their wholesale account. DrawDown is working capital that allows businesses to borrow against their future cash flow. These three products can be integrated into Shopify and Salesforce with an embedded funding or pay later button.
“We’re giving this tool to these ISVs so that their customers can instantly access our product and then learn about our other funding tools,” said Jared Shulman, CEO at Lendica.
“The most important piece, and this is kind of the excitement of Salesforce and Shopify is that what Lendica was doing is building this missing infrastructure in the small business lending space…,” said Shulman. “And what that is, is this standardized lending language, we call it the Lendica token that allows any financial institution to get a complete picture of a business, and then a point of reference on what that picture means.”
Lendica has experienced strong adoption of its products. According to Shulman, its PayLater product alone has garnered more than 10% growth month over month.