SoFi Opens Lending Program for Its Small Business Owner Members

Digital financial services app SoFi introduced a lending program for small businesses, according to a Tuesday (June 30) press release.

SoFi Small Business Loans are aimed at entrepreneurs and small business owners to help their businesses function and grow, the release said.

“For many of our members, their financial lives do not stop at personal goals; they also include the businesses they are building,” SoFi CEO Anthony Noto said in the release. “With SoFi Small Business Loans, we are expanding our ability to serve members in more of the moments that matter, giving them access to business financing through the same digital-first platform they already use to manage their personal finances.”

The program offers fixed business loans of as much as $250,000 to help SoFi members hire new staff, buy equipment or stock inventory, according to the release.

The announcement comes as many platforms that process payments and host storefronts have begun offering financing directly within their networks.

The PYMNTS Intelligence report “How Retail Small Businesses Finance Survival in Uncertain Times,” found that half of small- to medium-sized businesses (SMBs) depend on day-to-day sales or existing bank balances to remain in operation.

“The avenues of financing have traditionally been a bit narrow,” PYMNTS reported in March. “[Almost] one-third turn to personal credit cards when traditional financing is unavailable.”

In March, Mark Barnett, global head of small and medium enterprises at Mastercard, told PYMNTS about the credit difficulties facing SMBs run by members of Generation Z.

Gen Z grew up with smartphones, instant payment applications and contactless payments, but more than half of them run their businesses the old-fashioned way.

“The fact that 52% of the payments that Gen Z SMBs make are in cash … it’s staggering,” Barnett said.

In modern SMB finance, consumer FinTech has jumped ahead, while the financial infrastructure for SMBs needs an overhaul.

The PYMNTS Intelligence report “Ready for Change: Why Nearly Half of SMBs Want to Ditch Cash and Checks” found that in the wider SMB landscape, roughly 60% of businesses have a company credit card. Among Gen Z entrepreneurs, however, that figure drops to just 22%.

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