‘QuickBooks Invoice Financing Powered by Fundbox’ provides advance payments for outstanding invoices by employing QuickBooks data and Fundbox proprietary technology. In combination they eliminate the need for credit checks and paperwork which are the two biggest factors slowing down the approvals process.
Fundbox Founder and CEO Eyal Shinar said the depth of the partnership reflects a deep trust level between the two companies.
“Intuit is very protective of the user experience, so they do not let most companies touch their user interface design.”
Registration literally takes 20 seconds, Mr. Shinar explained. Then one click gets you on the network. Should you be a QuickBooks user it is already embedded in their software and you do not even have to make that one click, he added.
“The only way to make this easier is for you to think about it and it will happen.”
Coordinating a deep integration between two companies with their own philosophies and people takes some work, Mr. Shinar conceded, but it helps to keep the mutual goal in focus at all times.
“When you keep the same goal of adding value to the small business owner you figure out ways to do it.”
Fundbox has been working with Intuit clients for two years and that proved Fundbox added value specifically around the invoice, Mr. Shinar said.
Fundbox’s rapid growth can be linked to the mindset Mr. Shinar and his team adopted when designing the company. They first identified the pain point of the multiweek delay between invoice submission and payment and maintained their focus on the customer throughout, Mr. Shinar said.
“We started with the user experience and then we figured out the technology to back it.”
Businesses can have up to 90 days to pay an invoice and many wait until the latter stages of that period before paying, yet the company waiting for payment still has fixed costs such as rent and salaries, Mr. Shinar explained.
In some cases the company can adapt on its own and manage their cash flow to meet their obligations. But then they land a new contract and have to add equipment and staff, and that disrupts their carefully calibrated system to produce a cash flow gap.
The irony is that the faster you grow, the bigger the problem can become, Mr. Shinar said, because the cash flow gap can grow in tandem.
“You can actually grow so fast that you can go bankrupt because of this mismatch between cash in and cash out.”
“This is the use case for Fundbox.”
QuickBooks Invoice Financing Powered by Fundbox users go to their dashboard, select an invoice, click on it and receive the money moments later in most cases, Mr. Shinar said.
The key is in the underwriting, and Mr. Shinar conceded the customer qualification process is intense. That process has multiple levels and is constantly improved by the engineers and data scientists making up more than half of Fundbox staff.
The first level involves obtaining permission to pull company data from all available sources to construct a company’s immediate business network. This enables Fundbox to calculate the probability of each partner company paying back a specific invoice, Mr. Shinar explained.
The second level is a deep dive into more specific data from multiple sources.
Mr. Shinar said Fundbox also employs separate on boarding and ongoing models. While both focus on the separate issues of financial risk, fraud, and geographic and segment overexposure, there are some differences.
The ongoing model continuously improves as more data on existing customers is inputted into the system, allowing credit worthiness to be reassessed every day. Fundbox also adds more data on customers turned down in the event their risk profile changes.
Fundbox operates exclusively in the United States, though Mr. Shinar said they are being approached to expand to additional countries. Those countries are currently being prioritized.
Before ‘QuickBooks Invoice Financing Powered by Fundbox’, Intuit data revealed that 60 percent of QuickBooks customers were denied loans for such reasons as low FICO scores. Targeted campaigns on the new platform saw 70 percent acceptance rates.
“We can calculate risk in real time,” Mr. Shinar responded. “We have a better response time than banks.”
And those banks reject applicants for more reasons than bad credit, Mr. Shinar said. Underwriting smaller amounts is too expensive. Many lending officers also do not like underwriting business sectors they know little about.
“That is why machine power is so important, because it can work in scale. It is going to have a positive margin, good unit economics and it will cost the same to underwrite any size of loan.”