FinTech startup Foro has debuted a commercial lending platform designed to match lenders and businesses.
“For most small to midsize businesses, finding any commercial lending partner — much less one that’s a good fit for their capital needs — is time-consuming and complicated, driven by an antiquated, relationship-based model,” Foro said in a Thursday (Jan. 26) news release.
“The initial vetting and discovery process can take as long as 30 days, as many businesses struggle to tell their story effectively while financial institutions are left to filter through thousands of applications, the vast majority of which they have no interest in lending to,” the firm added.
The Charlotte, North Carolina-based company, in stealth mode until this week, says its platform connects businesses and lenders “based solely on fit” while shrinking the initial discovery period from 30 days to one week.
Foro says the platform has businesses fill out a profile that focuses on the specific questions lenders want answers to. From there, the profile is anonymized and routed for a match with banks, credit unions and alternative lenders.
Business owners will get a list of lenders who are interested in as little as 48 hours, Foro said, letting them choose between multiple financial institutions (FIs), who in turn get “verified, high-quality leads that meet their lending strategies and goals.”
As working capital from traditional lenders evaporates, SMBs are seeking fresh funds from digital channels.
Recent research by PYMNTS finds that small- to medium-sized businesses (SMBs) are scrambling to find new sources of working capital as they deal with higher supplier and operating costs.
“The pressure to find the right working capital solution is increasing, with one survey finding that big banks’ approval rate for business loans dipped to just below 15%, a 10-month low,” PYMNTS wrote in “Digital Banking Rises To Meet SMB Needs,” a collaboration with NCR.
“Alternative lending saw the biggest increase at nearly 2%, meaning small businesses are increasingly looking to FinTechs and digital-first offerings to deal with cost pressures.”
SMBs need capital to pay for the cost of the digital tech that assists with efficiency and operational improvements. According to the report, 24% of SMBs are worried about sourcing affordable funding, an existential threat for many owners.
The study also notes that traditional banks don’t usually offer online account opening or lending for SMBs and that the “current process can take one to two weeks and requires a visit to the bank” to apply for a small business loan, leading anxious SMBs to turn more to digital sources.
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