Loanspark has launched a co-branded lending service that helps B2B firms offer business funding products.
With this new FinTech service, organizations can generate additional business revenue while meeting their clients’ needs for capital, Loanspark said in a Wednesday (Feb. 1) press release.
“We strive to accomplish this by providing tailored business lending products and services that deliver value for our clients’ [small and medium-sized business (SMB)] customers and thus help to ensure the health and growth of business communities everywhere,” Loanspark Founder and CEO Michael Barnett said in the release.
As PYMNTS reported Jan. 19, access to working capital is a critical pain point for small businesses. While larger companies commonly enjoy longstanding relationships with their preferred financial institutions, SMBs often need additional help accessing sources of capital.
One recent survey found that big banks’ approval rate for business loans has dipped to a 10-month low at just below 15%. At the same time, with SMBs turning to nontraditional sources to find the right working capital solution, FinTechs and digital-first offerings are meeting that demand.
B2B buy now, pay later (BNPL) solutions, for example, can help SMBs unlock cash flow and scale, Plastiq Chief Operating Officer Stoyan Kenderov and Obvi CEO and Co-Founder Ronak Shah told PYMNTS in an interview posted in November.
The cost of capital has gotten increasingly costly, Shah said at the time.
“These small business owners and founders are not going to be able to go and get funding from traditional sources, and they will not be approved for a loan,” Kenderov added.
Digital sources also provide quicker turnaround times than traditional banks, whose current process can take one to two weeks and requires a trip to the bank.
For that and other reasons, 75% of SMBs with working capital needs are most likely to use a digital-only bank as their primary financial institution, according to “Digital Banking Rises to Meet SMB Needs,” a PYMNTS and NCR collaboration.
With its co-branded lending service, Loanspark provides digital tools and support, while the B2B businesses with which it partners market the commercial lending solution under their own brand name, according to the press release.
“There is a need for change in the lending space,” Barnett said in the release. “It’s our collective responsibility to make funding more accessible to SMBs and engage all B2B businesses willing to participate.”
For all PYMNTS B2B coverage, subscribe to the daily B2B Newsletter.