Small business alternative lender Biz2Credit has added Fortis Payments to its roster of payment partners.
Under the deal, companies that use Fortis’ merchant payment processing services will get access to Biz2Credit’s online small business lending marketplace. Biz2Credit already has partnerships with iPayment and Flagship Merchant Services, American Banker reported.
For its part, Biz2Credit will use data from Fortis to better evaluate the creditworthiness of business borrowers, along with the metrics it generates on its own. Biz2Credit monitors payment data on lenders across the country, including seasonal trends, to allow for greater flexibility on payback installments, and uses a proprietary scoring system for issuing loans.
That addition of new data sources improves Biz2Credit’s ability to assess borrowers, according to Biz2Credit co-founder and CEO Rohit Arora. “Over time it gets deeper and deeper, longer and longer [term] data,” Arora said. “The whole idea is that we are making it very data rich.”
Arora also believes the data mined from those payments will lead to fewer defaults. Biz2Credit’s default rate, as of last month, is 0.7 percent, he said.
The new agreement also means that borrowers will have the ability to pull payment records from the platform free of charge for IRS filings. Arora said he wants to create a one-stop shop for small business financial services. “We are not just a transactional platform where you come to get money. At the end of the day, we’re acting like a virtual CFO,” he added.
In December, Biz2Credit got a $250 million commitment from Direct Lending Investments, one of the biggest investors on Biz2Credit’s marketplace. Union Bank, TD Bank, and other mid-tier regional banks have also made loans through the startup.
Biz2Credit vets potential borrowers — who range from warehouse operators to small retailers (like restaurants) and service businesses (like hotels and motels) who want to borrow between $25,000 and $500,000 — connects them with lenders, then handles all the follow-up. The company expects about $80 million in revenue in 2015 and hopes to have an IPO next year.