The emerging US fintech platform Credibly has announced a partnership with the Small Business Association of Michigan (SBAM), a Michigan-based association that focuses on serving the needs of Michigan’s small business community.
Founded in 1969, SBAM’s mission is to help Michigan small entrepreneurs to develop their businesses and to succeed. It counts more than 25,000 members, located in all 83 counties of the state and ranging from accountants to appliance stores, from manufacturers to medical. The partnership provides all members with streamlined access to Credibly credit options via the SBAM Pulse platform, which already offers small business owners financial analysis and reporting tools.
Rob Fowler, President and CEO of SBAM, commented:
“It’s great to have another customer-service oriented, Michigan-based financing platform participating in our Pulse service. Like our small business members, Credibly is nimble. We appreciate that they provide a convenient, frictionless process that gives borrowers timely access to capital, which is crucial when you are on a fast track pursuing entrepreneurial opportunities.”
For Credibly this is an important deal as it shows SBAM’s interest in alternative sources of capital for local businesses, such as P2P loans. Indirectly, this deal might help publicise the availability of marketplace lending based solutions to Michigan businesses, mainstreaming this alternative funding option. Ryan Rosett, co-founder and Chief Revenue Officer at Credibly, commented:
“The partnership between Credibly and the Small Business Association of Michigan provides over 25,000 business owners with a direct line of access to working capital, and will help the SBAM become an even more essential resource for local business owners.”
I caught up with Ryan, who provided me with more colour around this partnership. Credibly was originally set up in Michigan and the company is closely linked to that community. Michigan is a major growing small business ecosystem, with a strong entrepreneurial spirit, as the transformation of Detroit – which went bankrupt just a few years ago - shows.
The partnership will allow the platform to access to a wider range of local businesses and therefore, it will presumably increase its customer base. According to Credibly’s co-founder, other partnerships are in the pipeline.
“Credibly was founded in Michigan, and having this opportunity to directly support the state's economic growth holds a lot of personal meaning for us. We're proud to be a Michigan-based company helping other Michigan-based companies”.
Credibly is keen to target the entire SMB credit spectrum, offering businesses a wide range of tailored capital solutions. I asked Ryan about the importance of having a well-diversified customer base. He replied that Credibly is constantly monitoring its portfolio and believes that customer diversification is a critical issue for marketplace lenders. Indeed, diversification enables platforms to spread risks and to limit the downside in downtrend markets. Ryan added that Credibly’s risk management process takes into considerationin consideration not only industry diversification, but also looks at companies’ credit profile, size and geography.
"Though we're based in Michigan,” Ryan added “ we lend in all 50 states, and our customer base spans a wide cross-section of industry type, business profile, creditworthiness, and geography."
Sticking with the theme of diversification I also asked Ryan whether his platform has any international expansion plans and if so what factors he’s taking into account as he looks to grow. He argued:
"International expansion isn't on Credibly's radar right now. We're completely focused on serving the 28 million small businesses within the United States."
A crucial question for any platform looking to broaden out its reach is how to manage growth. According to Credibly’s founder more accurate data is critical for any financial and non-financial decision and platforms not only need to rely on data, but also on the right kind of data. Partnerships are another essential channel for international expansion. Indeed, Ryan argued that with the right partner, it is easier to set new branches abroad, containing costs and benefiting from an existing loyal customer base.
Though Credibly is totally focused on US, Ryan said that Credibly is currently looking at some international markets that could be interesting for the future, without any firm plans as yet. But the smart money must be on Credibly ramping up its international expansion plans, perhaps through global partnerships. In fact, international expansion seems to be on the radar of the majority of platforms in the space (i.e.: Kabbage,Funding Circle and the like) and if Credibly wants to stay ahead of its competitors, it should diversify also abroad.