Intuit-operated QuickBooks has dabbled in small- and medium-sized business (SMB) financing in the past, but an announcement made Tuesday (Nov. 7) reveals it is now going full-force into the SMB lending space.
In the news release, the company said it is launching QuickBooks Capital and becoming a direct lender to small business customers in need of working capital. Intuit’s announcement noted the solution was developed on top of its existing data science and machine learning capabilities to underwrite loans to SMBs. In addition, the solution deploys more than 26 billion data points found within QuickBooks and third-party sources.
QuickBooks Capital uses data already within the QuickBooks platform, as well as a loan application process embedded within the portal to link SMBs to financing. The company said the solution can bring working capital to small businesses that might not otherwise have access to it. Intuit’s own research found 46 percent of QuickBooks Capital users have never applied for a loan before, while 60 percent aren’t likely to access financing through another source.
“The QuickBooks Capital credit model is delivering powerful results for small businesses — getting capital into the hands of so many creditworthy small businesses that otherwise felt stuck,” said Intuit’s head of QuickBooks Capital, Rania Succar, in a statement. “We are particularly proud to be innovative for young businesses because they are critical to the future success of the economy, but very underserved by the options available in today’s credit market.”
Intuit cited research from the Federal Reserve that found just 23 percent of small businesses younger than five years old are able to access the funding they need. Further, most that do access financing told researchers they were dissatisfied with the borrowing experience.
The company said it plans to tackle that friction and dissatisfaction through its lending solution. On average, small businesses need $25,000 in working capital, according to Intuit. The solution will also offer cash flow management, income forecasting, performance measuring and other features of its QuickBooks Capital solution.