US online credit marketplace increases SME borrowing success through advanced technology

By AltFi News on 23rd July 2014

Alternative Credit

Borrower to lender matchmaking in less than four minutes!

US online credit marketplace increases SME borrowing success through advanced technology

Here at AltFi we are expanding our horizons, looking at new geographies and the platforms that operate within those geographies. One such platform is Biz2Credit - a US based online marketplace with some very powerful technology and process automation. For UK based readers, we don’t have a platform with exactly the same model as Biz2Credit – it’s very much institution focussed, but think of a cross between Funding Circle and the Alternative Business Funding Platform and you’ll get some idea of how Biz2Credit’s model works.

The New York based online marketplace is leading the way for SME funding in the US. Since it’s launch in 2007, the company has facilitated more than $1.2 billion in small business funding for thousands of companies stretching across the U.S. Their technology matches borrowers with financial institutions based on the individual company’s profile, then rendering qualified offers based on borrowers passing the necessary credit tests.

Biz2Credit’s process is heavily automated and offers an approximate one day loan turn around making their coordination and loan provision service one of the speediest yet within the alternative finance space. The partnerships held with financial institutions and the efficiency of Biz2Credit’s processes are undeniably a contributing factor in their emergence as the leading online credit marketplace for SME’s.

A dedicated pool of capital was created three months ago with Biz2Credit telling us that 10% of the loans arranged since April have faced the fund.

The extensive Biz2Credit network consists approximately of 1.6 million potential borrowers, over 1300 lenders, small business service providers and one of the largest small and medium business credit rating agencies in the U.S, Equifax.

Lending Partners include:

  • Superior Financial Group
  • Seedco Financial Services Inc
  • Citizens Bank
  • Swift Capital
  • IOU Central
  • Rapid Advance
  • The Latino Coalition
  • Capital Access Network
  • A mix of credit providers, local community banks, national banks and small business loan providers

Biz2Credit also offers a range of services for both borrowers and lenders including a business lending index, research reports, complementary business plan writing and BizAnalyzer.

BizAnalyzer is an algorithm based on the borrower's business assets, personal credit score, the age of the business and other financial information. The tool then calculates the business’ Credit Score, the Risk Factor for the collateral type and how the owner can decrease that risk for a potential lender.

Biz2Credit has their finger in a few pies, but their success lies in the company’s detailed understanding of their clients and the sector. The Biz2Credit Small Business Lending Index tracks loan approval rates on a monthly basis and boasts quite the following. In the most recent numbers, Biz2Credit analysed 1,000 loan requests ranging from $25,000 to $3 million from businesses that opened within the last two years and maintained an average FICO credit score of at least 680. The results showed an improving picture for the access to finance of small businesses - a greater portion of small-business loan applications were accepted vs the same period last year.

Rohit Arora, chief executive of Biz2Credit stated:

"The strong return of banks in small-business lending indicates three things: [an] overall improving economy, entrepreneur confidence that they will be able to borrow for expansion and repay the loans, and the increasing ease and popularity of [Small Business Administration] lending,"

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Companies in this Article:

Funding Circle
Alternative Business Funding
Biz2Credit
Equifax
Circle

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