While mostly unknown and unheard of 15 years ago, the market has been suddenly and undeniably flooded with alternative lenders looking to connect small businesses with their next loan. There are lots of options and innovators within the world of SMB financing — and that creates a challenge for up-and-coming lenders looking to take on the marketplace.
Of course, not nearly enough have ever thought about using puppies as a promotional tool.
“Has your small business been missing something for a while, but you haven’t been able to put a finger on it?” SMB Alternative Lender Capify wrote on its blog in early April. “Thankfully, we have the answer for you: A Puppy Advance.”
Disappointingly Capify does not really offer a Puppy Advance; that “early April blog post” was an April 1 post and one of the Internet’s many, many April Fools' pranks.
Pranks aside, it has been a rather busy year for Capify, a company that until late last month technically didn’t exist. Capify represents a merger between four global alternative lenders for small businesses: U.S.-based AmeriMerchant, U.K.-based United Kapital, Australia-based AUSvance and Canada-based True North Capital. All four firms shared a common CEO and founder, David Goldin, who is now the CEO and president of the entire Capify organization.
Capify’s American arm was the founding branch of the business — established in 2002. The sister businesses were founded in 2007, though Goldin noted the intention was always for the businesses to merge.
“The markets that we serve in, the rules for merchant cash advance are different, and the users have very different experience levels,” Goldin noted. “In the U.S. it was a more known as a commodity, but when we launched in Australia, alternative finance and especially non-bank financing paths were basically unknown.”
Once established in all four marketplaces, Goldin noted, the math changed and it became much more strategic and valuable for Capify to address the market as a single global player.
With a lending base of 35 million businesses all in, and markets that are growing very rapidly, but some estimates Capify will be at or over 50 million by years end.
And from Capify’s end, the merged platform offers them better access to data about lendering trends, borrower habits and industry pressures.
“Right now we are a one-of-a-kind lender because of the four markets we serve, no one else is in the U.S., the U.K.. Australia and Canada all at once — and that gives us insights into lending that really no one else has. That is what really distinguishes our brand.”
And that distinction has drawn notice, most recently from Chinese mega-eCommerce player, Alibaba. Shortly after the merger was announced, Capify pulled off an even more headline-friendly second act in late July with the announcement that it had teamed up with Alibaba to boost SMB lending in Australia.
“We want to help make financing as accessible and efficient as possible for the 1.9 million Australian small- and mid-sized enterprises that do business through Alibaba.com,” said Michael Mang, Alibaba’s head of business development and marketing for the Asia-Pacific, Middle East and North Africa regions.
“This partnership will help Australian SMEs address their financing challenges and therefore encourage them to engage and capture opportunities from the global trading scene to further grow their business.”
The partnership will see Alibaba and Capify offer small businesses loans ranging from about $5,000 to $400,000 using Capify’s proprietary credit checking model. All in, the process is pegged to take about a minute. There is not official limit to what can be loaned out - though the firm estimates it will lend about around $40 million as part of its partnership with Alibaba.