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B2B PAYMENTS
For The Youngest Businesses, Connecting With StartupFor The Youngest Businesses, Connecting With StartupCapitalCapital
By PYMNTS
Posted on May 23, 2016
Much has been made of the woes suddenly being faced by online lenders, with Lending Club serving as the poster child,
perhaps, of murky loan review processes and internal controls. The fact remains that there will still be demand for online
platforms linking lenders and borrowers directly. The regulatory landscape is uncertain, that’s for certain, but the key remains
to go where the demand exists. One pocket of online lending that perhaps has been flying under the radar focuses on the
smallest businesses, with no real paper trail. New Business Funders (NBF), which launched mid-month, is offering unsecured
credit lines to those as-yet-untested businesses.
Why now? “This may be the most underserved market on the planet,” Founder and Chief Executive Officer Troy Bohlke told
PYMNTS. He cited research showing that there are 20,000 URLs being registered daily, with an annual tally of several million,
and according to Bohlke, the mere fact that these business owners are first staking their claims on a Web presence speaks to
the fact that they are in the earliest stages of launching, with “no cash flow, no tax returns in place, possibly not even a formal
business plan.”
The firm itself has been able to track down new business formations, with view of just who has filed for LLCs or websites, with
pertinent info that allows NBF to reach out via emails, phone calls, affiliate marketing and even outreach through real estate
and mortgage outfits (as firms either rent new space or the smallest business owners may offer up their properties as
collateral or to raise cash).
Bohlke said it is not especially useful to lump online lenders together or paint them with a broad brush, especially in the wake
of the clouds gathering over Lending Club and other firms in the industry at large.
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One key differentiator between NBF and firms such as Lending Club, said Bohlke, is that the other firms had essentially
gathered capital in a crowdfunding manner, with participation by non-accredited investors. The other pitfall that may draw
increased scrutiny among those who scale lower down the credit continuum: Firms that state they look for loans to be made
to borrowers with FICO scores of 700 and above — and yet extend loans to those with noticeably lower scores in an effort to
chase new business or returns — are likely to find themselves in trouble, stated Bohlke.
And yet, there is a real need for funding for the smallest of small businesses, said Bohlke. The Small Business Administration
has estimated that more than half of all small businesses fail within three short years of launching. Among the biggest sureties
to guarantee failure: lack of timely access to capital.
Under the NBF model, said Bohlke, collateral is not required, nor statements that might be hard to come by, given the fact that
many firms have no operating history at all. The firm does, however, require a 680 FICO sore (or better) to be funded, with
zero percent interest charged in the first half year to full year after receiving funding.
Startup capital disbursed to small business owners, explained Bohlke, comes through business credit lines, which can range
from between $20,000 and $250,000, though the executive told PYMNTS the loans tend to cluster around the $40,000 to
$80,000 range. Once a FICO report is submitted, a quote is returned by NBF to a would-be borrower, perhaps as quickly as 24
hours later. And, post-approval, funds can be disbursed between 15 and 21 business days later.
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What Apple Really Sees In IndiaWhat Apple Really Sees In IndiaBy PYMNTS
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When Apple CEO Tim Cook used to talk about the market his company was focused on, it was all about China.
Now, during a time when Apple has faced a few setbacks in that market, it appears there’s another major market Cook is now
seeing big potential in: India.
He’s made that clear in his recent visit to the area.
“The talent of the Indian people is unbelievable,” Cook said in an interview with India’s NDTV, according to a Wall Street
Journal report. As a result, Cook noted the company will spend “several hundred million dollars” to improve its services and
continue making headway in India.
Those investments include attempting to make its Maps service better, which has been traditionally dominated by Google.
But Apple has a long way to go to make a mark in India, as, according to Strategy Analytics research, Apple has just 2.7 percent
of the market share in India. The problem, at the moment, is that the iPhone is still far too expensive for consumers in the
region, who are used to phones that cost $150 or under.
Much of the high iPhone cost in India, however, has to do with taxes and import costs. Beyond that, carriers in the region don’t
subsidize any costs of the phones, which drives up the prices. To combat that, Apple is working on a plan to bring down costs
by adding a factory that refurbishes phones to sell cheaper in the region.
As for manufacturing phones in the region, Cook said: “It’s something that we look at; it’s not something that we have a plan to
do at this point.”
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