Quickbooks sitting on 5 million Small Business companies that need finance

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Quickbooks Financing is still in start-up mode within the larger Intuit enterprise, but they sit on an ecosystem of over 5 million small business customers of online and desktop users (out of 27 million in USA) with $2 trillion worth of invoices.

In surveys that they’ve done, the small business feedback has been 70% were declined for bank loans. The premise was that it was difficult for banks to analyze the small business applicants in a cost efficient manner.   I’ve touched on this before in a series I did on Why Banks don’t lend to Small Business – Part I

Quickbooks knew a lot of that data is contained within their four walls. So they have made it easy to apply for financing – see here , and have a network of banks and alternative lenders, including P2P loan companies to fulfill that need. Alternative players have done a nice job of taking Quickbooks data and combining it with other sources to combine and change the underwriting process for small business.

Their proprietary data has helped improve the conversion rates of approvals and has cut down the time for a decision to a business day.

If you are a Quickbooks Online (“QBO”) customer, Quickbooks Financing can reach out to their customers and ask if you need financing. From there, you go to an online Quickbooks Financing application and if you are a QBO customer, most of the application is pre-populated. Within their application, they can pull consumer bureau information, but the goal is to move away from the owner of the business and focus on the business itself. They can in real-time match you to a lender because they know the criteria and framework their lenders need to see.

Quickbooks has built integration with some financial institutions, not only to provide a match, but also to provide information that the bank can approve with this specific interest rate.

After one and half years, they are satisfied with growth (tripled from last year).

It seems the options for small business lending keep growing, and in fact, instead of disintermediation, banks and others are finding new opportunities and new underwriting methods.

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