Intuit (NASDAQ:INTU) just announced the launch of a new small business lending service that’s powered by data and artificial intelligence.
Small Business Trends’ Ramon Ray recently sat down with Rania Succar, head of QuickBooks Capital, to discuss the new offering and how it can potentially benefit small businesses.
Introducing QuickBooks Capital
QuickBooks Capital is an automated service that is meant to get capital into the hands of underserved small businesses using data from QuickBooks. According to Succar, 70 percent of small businesses need some type of capital to grow. Yet few businesses actually have the ability to access that capital because of the arbitrary requirements and roadblocks often required by traditional lenders, even though some of those requirements don’t have much to do with the actual financial strength of those businesses.
Succar said, “In the small business lending space, there’s still quite a bit of room for innovation. Only 23 percent of small businesses who need capital can access it. And those who do, more than half of them are dissatisfied with the experience.”
Intuit thinks it can satisfy this need using the massive amount of data it already has. Because of the large user base of small businesses using QuickBooks, the company has access to 26 billion data points about small businesses. So with this new offering, it’s using that data to evaluate businesses’ ability to pay back a loan.
Obviously, having access to a business’s actual books can make the evaluation process easier while also giving more businesses a chance to prove themselves. QuickBooks Capital looks at a number of different factors when evaluating a business’s financial strength, including payroll, rent, invoices, seasonal patterns, and even how other businesses in the industry are performing.
It’s that depth of data that makes the platform uniquely equipped to evaluate businesses based on their actual financial strength. And it’s also what allows the platform to offer opportunities to businesses that might be overlooked or underserved by other lenders. According to Succar, businesses that have been around for as little as six months are eligible to access capital opportunity through the platform.
Since the platform is automated, it also gives businesses the opportunity to access capital right away, rather than waiting weeks or months to be approved by traditional lenders. That’s important for businesses that want to take advantage of time sensitive growth opportunities.
According to Succar, 90 percent of the businesses that took out loans through QuickBooks Capital during the trial run used their capital to power growth. And that’s the major purpose of the new offering — providing small businesses with opportunities to grow. Intuit could be uniquely poised to do just that for a lot of underserved small businesses, thanks mainly to the data it already has access to.
Succar said, “At the end of the day, if you’re going to give a small business access to capital, you have to understand their books. And you have to understand how much they can afford. And the heart of that is data innovation.”
Image: Intuit
This article, “QuickBooks Capital Bases Credit for Loans on QuickBooks Data” was first published on Small Business Trends