If one were to take to the streets and ask people what they first came to mind when hearing the word “Staples,” the vast majority would likely say something about the office supplies store with an “easy button.”
What no one or almost no one would say is “small business lending.” But, if the Framingham, Massachusetts-based office supply company is successful in its newest venture, that could very likely change.
Earlier this year, Staples announced that it – in partnership with alternative financial services provider Lendio – will provide small ($2,500- $1 million) loans that come in a variety of flavors, including lines of credit, SBA loans, term loans, cash advances, equipment loans and commercial real estate loans. Last week, the world at large got the first progress report out of the new lending platform – as the company passed the $1 million milestone last week.
“At Staples, we’re excited that Staples Business Loans has already helped 43 small businesses get the right funding,” Alison Corcoran, Staples’ SVP of North American stores and online marketing noted. “We know that small businesses are the backbone of their communities. We’re proud that Staples Business Loans is helping businesses grow and helping owners make their dreams come true. We are committed to helping small businesses by providing everything they need to make more happen in their business through products and services they need, including capital.”
While working with small business is nothing new for Staples, its business partners of the past were mostly looking for one-stop shopping for traditional office supplies – with perhaps some light printing or shipping services thrown in for good measure. Small business clients that are now coming to Staples through its lending platform are, in some cases, a very different breed.
For example a food truck in Virginia doesn’t need much in the way of filing cabinets or printer cartridges – but it does need startup capital to get off the ground and deliver lunch to the hungering masses. And that, Staples spokeswoman Carrie McElwee told PYMNTS, is just the kind of expanded opportunity the firm is looking for.
“Staples Business Loans launched on Feb. 25, 2015. Our direct experience is working with small businesses for almost 30 years and we have seen how hard financing has gotten – especially in the last decade. So we saw something that was both a major pain point for small businesses and a huge opportunity for us. The current process that exists is time-consuming and very long – 60 days to get funded. Staples Business Loans is a service to make it easy. We teamed up with Lendio – an innovative financial technology firm – to deliver a suite of funding options that help solve these challenges for our small business customers.”
McElwee noted that while there has been wide interest in moving into lending within Staples for some time – it’s only been recently that there was any way to get involved in that line of business.
“Staples leverages our relationship with small businesses and Lendio’s innovative financial tech platform to help small businesses,” McElwee told PYMNTS.
The small business move by Staples comes at a time of significant flux at Staples. Persistent declines in sales and revenues are squeezing its bottom line on two fronts. On one side, Staples’ business (and consumer) customers are becoming more digital and not buying as many paper-based office supplies that were the (pun intended) staples of Staples. On the other, Staples’ sales are threatened by online efforts by etailers like Amazon, that threaten to undercut on price and convenience. Amazon recently launched its own B2B services as well, including corporate credit.
Staples, however, is pushing back in a changing market – and apparently taking a more out-of-the-box approach to the services it might have for a small business and consumer base that has different needs. The firm saw Q1 2015 profits dip sharply – and its CEO has been quoted as saying the firm is now undertaking a significant reinvention as it looks to rebuild damaged market share.
To that end, it moved to acquire its last remaining major competitor Office Depot – a deal still under review by the FTC. It’s also looking to reduce its physical presence – with 60 store closures planned for the next year – in favor of the expansion of its digital one.
And as its new lending platform illustrates, Staples is clearly looking for new ways to engage its small business customer base.
“Our main priority going forward is to continue to grow and expand the breadth and depth of the businesses we are working with,” McElwee told PYMNTS. “We’re looking at other financial products that small businesses need. There is a lot of opportunity in this area.”