Fintechs help boost small to medium businesses in 2020

Fintech offerings have become even more critical during the global pandemic

Fintechs helped boost the operations of small to medium companies who were forced to pivot when the coronavirus pandemic rapidly changed how business was conducted.

From obtaining loans to engaging with customers online, fintechs reported a surge in the number of clients as small to medium businesses who were relying on more traditional methods had to alter their methods quickly as more transactions had to be conducted digitally and not in person.

LendingFront, a New York-based fintech operating system, reported 100% growth in clients from 2019 along with 40% growth in loan applications processed. The company provides small business lending for community banks, credit unions, Community Development Financial Institutions, payment processors and alternative lenders. 

LendingFront’s software automates the tools for financial institutions to extend credit to small businesses, including application intake, document collection, data aggregation, rules-based decisioning, underwriting and servicing. Ponce Bank, Access Community Capital and Innovation Works Baltimore are three new financial institutions that started using the platform.

“Small and medium businesses have always needed access to capital and that demand has only increased during the global pandemic,” said CEO and co-founder Jorge Sun.

Fintech offerings have become even more critical during the global pandemic. More banks are starting to digitize their branch offerings in part due to the need for contactless communications with customers, he said. 

“As demand swelled for PPP loans, with more to come, many banks are looking to streamline and automate their lending processes,” Sun said. 

Another fintech that enabled small businesses to operate more efficiently is San Diego-based GoSite, a platform that helps companies engage with customers online. The platform lets companies manage their website, listings, reviews, messages, booking and payments from one dashboard. Earlier this month, GoSite closed a $40 million Series B fundraising round led by New York-based Left Lane Capital.

Smaller business owners such as hair salons, landscapers and auto shops using the platform can give their customers the ability to book, pay and review services.

Obtaining access to cash flow and capital can be challenging. Thryv Holdings is a Dallas-based software company that helps small business owners do things like automate their marketing via email and text, update business listings online, generate estimates and invoices and process payments. The company launched a new payment processor, ThryvPay, in October. 

The payment provider focuses on service-based small businesses and offers competitive credit card processing rates, ACH check processing, scheduled payments, convenience fees and tipping.

“Our SaaS platform solves the problems that small businesses have today,” said CEO Joe Walsh. “ThryvPay is a meaningful new payment processor we developed specifically for our clients – the service-based small business. During a time when many SMBs are struggling to stay afloat, processing payments with ThryvPay puts money back into the pockets of small business owners.”

Here are other fintechs that work closely with small to medium-sized businesses:

SpotOn is a payments and software startup focused on small and medium-sized businesses that recently raised $60 million in series C funding. The round was led by investment giant DST Global and included participation from existing backers Dragoneer Investment Group and Franklin Templeton. SpotOn raised a total of $190 million since its 2017 inception.

The goal of San Francisco-based SpotOn is to compete with more mature fintechs like Square. SpotOn President RJ Horsely previously said that the startup’s platform gives SMBs the ability to run their businesses “from building a brand to taking payments and everything in-between.” It also seeks to be a “one-stop-shop” by incorporating tools that include custom website development, scheduling software, marketing, appointment scheduling, review management, analytics and digital loyalty.

BlueVine, a Redwood City-based fintech that offers banking services for small and medium-sized businesses, launched its “Business Banking” solution, which the company describes as “the industry’s first integrated banking, payments, and lending solution designed specifically for small businesses.” The product includes 1.0% interest on deposits, two free checkbooks, zero fees on incoming wires and ATM withdrawals, and a new payments feature that allows customers to pay vendors directly through BlueVine’s app, including via credit card. 

BlueVine also partnered with Plaid, the open banking fintech that Visa is seeking to acquire. Plaid’s integration enables BlueVine’s small business customers to draw from external checking accounts when making payments or completing other operations in the BlueVine dashboard. 

BlueVine completed a $102.5 million Series F funding round in November 2019, bringing its total venture financing to $767.5M, per Crunchbase. BlueVine said  its customer base rose by 660% in 2020 and the firm secured a $75M credit facility in September to boost its Line of Credit product. 

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