Fintechs of all kinds are helping SMBs stay afloat

Whether your company is a business management platform, service provider, or even a digital ad agency, your SMB customers need financing to survive short term uncertainty, pay bills on time, and continue to operate their business.

67%

Of small business owners are uncertain about how to access and apply for emergency funding

51%

Say their business will only be able to continue to operate for 0-3 months

*from a recent Goldman Sachs survey of 1,500+ small businesses

Lendflow enables you to give your customers access to financing options tailored for their needs through one simple application built into your website or software.

There are numerous issues facing SMBs across the country and world in the fall-out and ongoing effects of COVID-19. Many SMBs share the same issues:

• Business slowing to a halt
• Negatively affected cash flow
• Great uncertainty about when this will end or turn around
• Lack of knowledge about options
• Mis-information about what the government will do to help

All the way back in Sep 2016, JP Morgan released a report titled “Cash is King: Flows, Balances, and Buffer Days“, gathering evidence from over 600,000 small businesses. The results are indicative of the severity of the issues they are facing:

• Half of all small businesses hold a cash buffer of less than one month
• 25 percent of small businesses hold fewer than 13 cash buffer days in reserve

Current Available Options

SBA 7(a) Loans and SBA Disaster Assistance Loans for Small Businesses

• $50 billion promised to SMBs in distress
• Low interest rates of 3.75%
• With additional state-by-state relief being offered as well

While this relief is important for survival of many companies there are plenty of downsides:

• Only available to regions following an economic injury declaration
• Many businesses will not qualify due to fairly strict requirements
• The SBA will face numerous distribution and infrastructure issues
• SBA assistance alone may not be enough or happen fast enough to save many SMBs

Alternative and Online Lenders

Many alternative and online lending companies are stepping up to offer assistance and building new credit product to match the circumstances

• Kabbage is offering a gift card program making it easier for anyone to support participating small businesses that may be shut down indefinitely
• Square, PayPal, Stripe and other fintechs are urging congress to let them help!

“Small businesses need capital immediately. Small businesses are shut down, business owners are isolated in their homes, and many physical bank branches are closed. Any federal small business loan program must leverage digital advances in the marketplace to ensure that stimulus can reach those businesses most in need.”

Financial Innovation Now, letter to Congress, March 19th, 2020

However, these solutions aren’t always the best choice for certain SMBs that may not fit the mold.

• Square, Clover, Shopify and others only finance a small portion of their customers which have the best credit ratings – the rest are left to look elsewhere
• Kabbage, Bluevine, and others also cater to specific segments of businesses forcing borrowers to submit multiple applications and spend countless hours looking for the right options

How does Lendflow fit into all of this?

Lenflow’s easy to install API technology enables you to give your SMB customers access to multiple financing options from within your platform or website. We’ve partnered with many of the lenders and fintechs listed above to ensure your customers get access to the perfect solutions!

• One simple application allows us to evaluate their business and determine the best available options for their credit profile and current financial situation
• We submit applications to many of the larger players listed above as well as dozens of other lenders that offer creative credit solutions to businesses that fall in any credit tier
• We even submit applications to SBA partners so your customers can get in line and start the process for the SBA Disaster Assistance Loans

How can you get involved?

If you think this would be a valuable feature/service to offer your SMB customers – we’d love to chat with you and see how we can work together

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