Fundbox’s Direct Draw simplifies small business credit access
Fundbox’s new offering Direct Draw should be a great draw for the 18 million underserved small businesses in America, its executive team believes.
Direct Draw only requires a connection to a business bank account.
In a release, Fundbox estimated 60 per cent of America’s small businesses are financially underserved and struggle to find the money they need to grow. Banks reject roughly three out of every four applications and balk at lending less than six figures. Even when they do lend, banks, and many fintechs too, require a small business owner’s personal credit score for underwriting. Many business owners prefer to keep business and personal finances separate. Personal credit inquiries can also hurt their credit scores.
The simplicity is only possible because of Fundbox’s significant investments in artificial intelligence over the past several years, founder and CEO Eyal Shinar and VP of product Prashant Fuloria said. Combined with the 12.8 million unique businesses in Fundbox’s Small Business Graph that have relationships with their 50,000 clients (from which Fundbox collects relevant data), the two allow Fundbox to quickly and confidently assess applicants by assessing the quality of those business relationships.
“That provides a very robust view of a business,” Mr. Fuloria said, while adding the average small business transacts with 255 other ones.
“For the past four years, Fundbox has served SMBs by connecting their accounting or invoicing software to Fundbox,” Mr. Fuloria said. “Direct Draw extends that from the five million SMB with accounting software to virtually each and every one of America’s 30 million small businesses.”
Those funds can be received in as soon as the next business day, providing a key lifeline for SMBs, Mr. Fuloria said.
“The average small business is owed $84,000 in unpaid invoices, At a total of $825 billion nationwide, it’s a big drag on the small business sector.”