SAN FRANCISCO, June 13, 2017 /PRNewswire/ -- Today Fundbox, the leading small business cash flow optimization platform, announced a new product expansion called Direct Draw that lets small businesses (SMBs) easily apply for credit with just a business bank account and without requiring their personal credit to get started. Direct Draw enables Fundbox to help the 18 million SMBs in the U.S. that are underserved by existing funding options, most of which rely on personal credit, something that is unpopular with many SMBs.1 Direct Draw is possible because of the company's deep investments in artificial intelligence and the 12.8 million unique businesses in its Small Business Graph.
Fundbox estimates that six out of 10 small businesses in the U.S. are financially underserved and struggle to find funds to grow.2 Banks only approve 24 percent of the applications they receive from small businesses3 and often cannot lend less than $100,000 profitably.4 Many banks and fintech companies in the U.S. require a small business owner's personal credit for underwriting, which many owners dislike because it prevents them from separating personal and business finances, and because personal credit inquiries can hurt their credit scores.
"The launch of Direct Draw marks another way Fundbox is giving small businesses more control over their finances and access to capital to grow their business," said Eyal Shinar, founder and CEO, Fundbox. "Our artificial intelligence allows us to democratize credit access for SMBs that prefer to not use their personal credit. We do this by leveraging our Small Business Graph to analyze customers' business fundamentals in the context of their network."
Fundbox customers using Direct Draw only need to connect their bank account to get started. Fundbox algorithms review the transactions in that account to learn about the business and make a credit decision. Approved customers can draw funds any time with the funds transferring as soon as the next business day.
Fundbox's proprietary technology allows it to tap into multiple data sources to assess risk and use its own rating system to extend credit to SMBs. The data Fundbox collects goes into its Small Business Graph, where it looks at its customers and their interactions with other businesses dynamically. Doing so gives it a robust view of the customer and its entire network. Fundbox works with over 50,000 SMBs but can see 12.8 million total businesses on the Small Business Graph.
Direct Draw complements the company's invoice-based solution, which uses the SMB's accounting software to gain insight into the SMB's creditworthiness. Both options do not require personal credit for underwriting to get started. To date, Fundbox has served more than 50,000 SMBs and has approximately 60 million B2B transactions on its platform.
For more information, please visit www.fundbox.com.
Fundbox is the leading platform for small and medium-sized businesses to manage and optimize cash flow. Through its advanced data science and analytics capabilities, Fundbox taps into numerous data signals to assess customers for risk automatically and right away. Approved small and medium-sized business owners are able to access capital with a single click - funds show up in their bank account as soon as the next business day. Leading Silicon Valley entrepreneurs, finance veterans, and venture capitalists, including Spark Capital Growth, Bezos Expeditions (the personal investment arm of Jeff Bezos), General Catalyst Partners, Khosla Ventures, SV Angel, former CitiGroup CEO Vikram Pandit, and other prominent investors back the company. Fundbox makes capital available to businesses through business loans and lines of credit made by First Electronic Bank, member FDIC, in addition to invoice-clearing advances, business loans and lines of credit made directly by Fundbox.
1 Federal Reserve Bank of New York, 2016 Small Business Credit Survey, https://www.newyorkfed.org/medialibrary/media/smallbusiness/2016/SBCS-Report-EmployerFirms-2016.pdf
2 Federal Reserve Bank of New York
3 Biz2Credit, Small Business Lending Index ™, https://www.biz2credit.com/small-business-lending-index
4 Mills, Karen and Brayden McCarthy, "The State of Small Business Lending", Harvard Business School