A Long View Of The B2B FinTech/Bank Landscape

Small business owners are often both harried and undercapitalized and, as a segment, deeply in need of assistance in bridging administration and cash flow challenges.

And yet, because of their fragmentation and size, they are conventionally difficult to serve efficiently. This has led to both service and product gaps in the banking sector.

“If we talk about micro businesses, for example,” said Viewpost CEO Max Eliscu in an interview with PYMNTS, “what you find are business owners wearing many hats. Frequently, the owner is the sales person, bookkeeper and customer service department. There is little time for wasted administration. Real-time, contextual tools are what is needed. Sadly, they have either been unavailable or too expensive and difficult to use.”

“It is for this reason that we still see small businesses defaulting to paper invoices, or heading back to the office after a long day in the field, only to sit down and begin billing their customers for the services that were rendered throughout the day,” Eliscu added. 

The key to streamlining small business billing, collection and commerce in general, Eliscu continued, lies in providing business owners with the tools and freedom to act in the moment of greatest opportunity.

“That is the objective of our new iOS app, Viewpost Invoice. Business owners who don’t have an accounting department can quickly and easily create invoices on the fly, at the time of service. Even better, they can also be paid on the spot by credit card, or for those seeking to reduce interchange costs, directly through bank account to bank account payment transfers.”

The obvious advantage for the small business owner is the ability to invoice and be paid in near real-time.

“For those who bill on a recurring basis, or whose customers demand credit terms, the service works just as well, with the added benefit of being able to track invoice approvals and payments as easily as anyone now tracks package delivery. This visibility is critical to small business owners, who otherwise have no idea if their invoices have even been received, let alone if and when they’ll be paid.”

While small businesses struggle mightily with the administrative tasks of invoicing and payments, Eliscu noted that larger firms often have the same challenges, adding that “within the next few months,” Viewpost will announce partnerships with large firms who have chosen to use Viewpost as a way to eliminate the delivery of more than 60 million paper invoices a year.

Speaking directly of Viewpost’s recently announced relationship with Bank of America, Eliscu said that his experience with LSQ Funding Group (LSQ), the invoice finance company he founded at age 25, and where he still serves as CEO, helped him understand the small business product market gap in the banking industry. LSQ’s relationships with big financial institutions stretch back to 2007 and a relationship with U.S. Bank. The scale of that partnership accelerated LSQ’s growth, and gave it insight into the day-to-day trials and tribulations of SMBs, especially in managing cash flow. The collective insight helped spawn the vision for Viewpost, and its objective of making B2B commerce frictionless.

With Bank of America, Viewpost’s invoicing and payment network is becoming an integrated part of their comprehensive product suite available to small-business clients. As Eliscu noted, Bank of America is particularly focused on giving small businesses the tools they need to “better manage cash flow in real-time.” In support of that goal, according to Eliscu, Bank of America intends to create and deliver incremental features that will help minimize the impact of fluctuations in cash flow through better data and contextual advice, guidance and financial product delivery.

Noting the competitive environment with traditional B2B lenders, Eliscu said that unlike most FinTech firms, neither LSQ nor Viewpost is seen as a source of competition for the banking industry. Rather, both have been designed to work in partnership with banks to augment and amplify the effectiveness of their existing product and services.

“Banks have a competitive advantage in both cost of capital and client trust” he said, adding that “their challenge is one of nimbleness, not desire, and that is simply a function of their massive scale.”

Both LSQ and Viewpost help their bank partners tear down that barrier, arming the banks to leverage their competitive advantages. Ultimately, he said, that ends up being a positive for not only the banks, but also for the 28 million small businesses in America that account for 54 percent of all U.S. sales.

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MAX ELISCU

Founder & CEO of LSQ Funding Group and Viewpost

Max has been building and scaling businesses in the B2B space for nearly two decades, first as the founder of LSQ Funding Group and more recently as the founder of Viewpost. He is CEO of both companies.

In creating LSQ Funding Group, Max set out to help small to midsize businesses access working capital through quick and efficient invoice financing. Fueled by referral relationships with the nation’s leading banks, including U.S. Bank and Bank of America, LSQ to date has provided more than $14 billion in financing to small businesses. The scale and structure of financing operations at LSQ placed it at the epicenter of the B2B market’s transactional inefficiency. Max saw the opportunity amid the arcane, largely paper-based methods many businesses still use to send, receive and make payment, and launched Viewpost.

Viewpost offers businesses of every size, across AR/AP, a secure business network that removes the barriers to exchanging invoices and payments electronically. The network connects businesses and people to data that is used to improve efficiency, collaboration and cash flow management, while drastically reducing the need for paper-based processes. Recognizing the shared interest between Viewpost and financial institutions, Max and his leadership team forged partnerships with U.S. Bank, Fifth Third Bank and others soon to be announced, aiming to accelerate the elimination of paper invoices and payments for every business, big or small. To date, more than $24 billion has transacted over Viewpost.

To feed the rapid growth of LSQ Funding Group and Viewpost, Max has raised more than $240 million in equity capital over the last three years.