FinTech SmartBiz Eyes Full-Service Banking After Buying Centrust

There are roughly 33 million small businesses in the United States, employing a bit less than half of workers in the country, according to the U.S. Chamber of Commerce. All businesses need capital to survive and thrive, and yet banks’ servicing of those needs is spotty at best.

PYMNTS Intelligence data earlier this year revealed that about half of firms relied on the money in their bank accounts to keep going — but tariffs and general macro uncertainty mean that financing remains top of mind.

Bridging the Gap

As Evan Singer, CEO of FinTech SmartBiz told PYMNTS, what smaller firms want from their banks is fairly straightforward: “The way I like to think about it from a small business perspective is, ‘Say yes to the amount I need, in a way that I can repay it — and in a fast and easy way.’ That’s what we hear across the board from businesses.”

The company’s small business funding platform acts as a marketplace linking businesses and lenders, tracing its roots back more than a decade ago after being incubated at PayPal.

The initial focus had been to fill the gap between banks and small businesses, but it’s been hard to do so profitably. It takes the same time and resources to originate a $100,000 loan as it does for a $10 million one, Singer said. The platform has sought to bridge the gap in the market through technology, noting on its site that to date it has enabled $9 billion in SBA loans to more than 230,000 business owners.

“We’ve invested in technology to build a platform,” Singer said of his California firm, “to help banks underwrite and originate small business loans efficiently, compliantly and profitably.”

Last month, the company closed on its acquisition of United Community Bancshares, and its Chicago-based Centrust Bank subsidiary. The FinTech now becomes a full bank, taking on the name SmartBiz Bancshares. The deal, approved by regulators including the Office of the Comptroller of the Currency and the Federal Reserve Bank of Chicago, marks the first FinTech-bank deal under the new presidential administration.

“We felt that by having our own bank, and in our position where we’ve got not only the technology but the banking charter as well, could serve small businesses even better than we had,” by extending more loans directly.

Singer said the combined operations have kept all of the banks’ team members, for a total of 130 staff on hand. “We’re going to take the best parts of SmartBiz and the best parts of Centrust and join forces,” Singer said, harnessing the data gleaned through the past decade for underwriting across an expanded footprint.

Looking Ahead

As a nationally chartered bank, Singer said, SmartBiz Bancshares is primarily regulated by the OCC and the Fed, which regulates the holding company, and the Small Business Association as well. The company’s loan originations — nationally, and with an additional focus on the Chicago area — comes at a time, Singer said that, “there are not many banks that are focused exclusively on the small business customer.”

Asked about the near-term roadmap, Singer said the company will expand its products and services, with a full suite of commercial banking offerings. “On a national basis, we’ll offer loans that are $550,000 and less to small businesses,” he told PYMNTS, adding “The next product that we’ll be launching will be deposit accounts for small businesses nationally. That will come later in the year.”