Together the two companies have delivered a financing process that is almost three times faster than that of traditional lenders and delivers a 90% approval rate, according to a white paper released Wednesday (Nov. 15).
They are doing so at a time when only 12% of SMBs say the availability of current credit is good, and 51% say it is poor or very poor, according to the paper.
“This partnership allows applications to be completed more quickly, with higher success rates and lower costs,” the paper said. “Funds can be disbursed the same day, enabling [SMBs] to take advantage of opportunities and react to risk more quickly.”
When dealing with legacy lenders, SMBs face an over-reliance on traditional data sources, the paper said. This leads to high rejection rates, inaccurate data and expensive rates.
YouLend’s integration with Plaid, on the other hand, delivers cash flow insights that include up-to-date financial data and don’t require time spent verifying bank statements, per the paper.
“Financing providers can now offer modern, automated underwriting which factors in alternative income streams to present fast, flexible and affordable financing solutions,” the paper said.
To deliver this financing to SMBs, Plaid and YouLend have partnered with eCommerce retailers, marketplaces, payment service providers and other digital service platforms, according to the paper.
These platforms can serve as financing providers to SMBs because they are trusted partners of SMBs, collect a vast amount of transactional data, and provide convenience and consolidation when they integrate financial services, per the paper.
“As well as improving the funding experience, platforms that work with a trusted embedded financing partner can also offer funding products that better meet the needs of their customers than traditional lenders,” the paper said.
In June, YouLend and Amazon teamed up to help small businesses in the United Kingdom gain financing. The partnership gives merchants cash advances linked to their sales, letting them make payments as they earn.
For all PYMNTS B2B coverage, subscribe to the daily B2B Newsletter.