In a Nutshell: Small businesses in the U.S. can be met with funding obstacles that larger and more established companies are often able to avoid. Because these small businesses don’t necessarily have an established credit history or demonstrated cash flow, banks are often hesitant to lend to them. The COVID-19 pandemic only made these challenges more apparent. Credibly is a lender built from the ground up specifically with small businesses in mind. The company’s mission is to help small and medium-sized businesses grow by giving them fast access to loans and other financing options. This is possible thanks to Credibly’s proprietary scoring model and its approach that combines automation and human expertise, enabling the company to review each and every file efficiently.
Small businesses often face challenges when it comes to funding — especially when they are just starting out. The businesses may explore a number of avenues to secure funds, including seeking out investors and applying for bank loans.
These companies — because they are new — often don’t have established credit histories or even collateral, which means banks are less likely to give them a loan.
Thankfully, small businesses today have more opportunities to secure loans and financing than in years past.
Companies like Credibly specialize in providing crucial funding to businesses just getting off the ground or established companies that may have had financing difficulties.
Credibly was established in 2010 to improve the choice, cost, speed, and experience of capital to businesses across the United States.
“We believe in small and medium-sized businesses and the people who make them grow,” according to the company. “We leverage cutting-edge data science, technology, partner relations, and customer support to provide business owners with accelerated access to right-sized capital solutions.”
We recently spoke with Credibly’s Director of Marketing and Strategic Partnerships, Jeffrey Bumbales, to learn more about the company’s approach to funding and leveraging technology while maintaining a human touch. He also discusses how businesses have met the challenges of the COVID-19 pandemic.
Combining Technology and Human Expertise
Credibly can help small businesses prequalify for loans of up to $400,000 by completing an online form or speaking with one of the company’s small business specialists. Applicants will know the results of their request within 24 hours.
“We assess your business’s health and reach out to you with the best funding options,” according to the company. “Receive funds in your account in as soon as the same day, plus access to your customer portal.”
Bumbales told us this is all possible because of the way Credibly combines modern technology with human expertise to deliver fast results and dependable service. This dual approach is also what helps set Credibly apart from many other small business lenders.
“The biggest differentiator between us and some of our competitors in the space is (our models) are not fully automated from a decision-making standpoint,” he said. “We have automated processes to better understand risk. But we do take each file case by case, which allows us to more effectively manage risk and dive deeper into the credit spectrum.”
In 2013, Credibly introduced its ReCap scoring model, which evaluates a business’s overall health beyond the traditional metrics used in the industry.
Credibly pairs its in-house proprietary scoring model with best industry practices, along with the all-important human touch for every application, Bumbales said.
“Rather than focusing strictly on traditional financial metrics, we measure your business’s overall health and potential,” according to the company. “Then, we work with you to better understand your short-term needs and long-term goals and match you with the best available financing options. That’s the Credibly advantage.”
Offering Loans Suited for an Array of Industries
Credibly offers a variety of loans designed with small businesses in mind that cut across a variety of industries.
“We understand that each business is unique, so we offer a comprehensive suite of loans and other flexible financing solutions that are tailored to your specific needs,” according to the company. “With varying terms and funding amounts, we ensure that you get the right size funding at each stage of your business’s development.”
Credibly’s stance is that not every small business is the same, so neither should their financing solutions.
“We want to help you get funding that fits the size of your business at any stage of development,” according to Credibly. “Our team is always available to coach you throughout the process. With one of the widest range of loan programs amongst any direct lender, we have borrowers like you covered.”
Qualifying applicants will be provided with the best funding options available that are best suited to their needs, according to the company.
“Whether you are looking to pursue a growth initiative or need additional working capital to support your cash flow, we’ll find the best type of loan for your unique business needs,” according to the Credibly website.
Credibly offers working capital loans, long term loans, business lines of credit, and SBA loans.
“Our short-term loans, long-term loans, and other financing solutions have varying loan amounts, loan terms, repayment terms (or remittance durations), and qualifying criteria, so we can tailor the best financing solution for your business,” according to the company.
Credibly also provides other solutions, including merchant cash advances, equipment financing, and invoice factoring.
Small Business Challenges During the COVID-19 Pandemic
The COVID-19 pandemic threw businesses and individuals for a loop all across the U.S. While certain industries, such as tech, were able to quickly pivot or even leverage their existing business models to be advantageous in the pandemic, many other industries suffered.
Small businesses that often already struggle with funding saw banks looking at an uncertain economy and were even less willing than usual to do business with them. And the hospitality industry, including restaurants and travel, took a major hit due to the widespread coronavirus.
Bumbales said Credibly’s mission and unique scoring model made it so the company could still work with small businesses in industries other lenders didn’t want to touch.
“The service industry was absolutely disrupted because of stay-at-home orders and things like that,” he said. “Because we’re able to look at every file and see how businesses are pivoting, we’re able to put together a more complete picture of the business and understand exactly what’s going on.”
He said industry peers typically request three months of bank statements and make loan decisions based on cash flow and risk-based pricing. But Credibly is able to dive deeper.
“While small businesses are beginning to reopen around the country, social distancing guidelines and government mandates are still causing critical cash flow concerns for business owners,” according to Credibly.
The company recommends small businesses check in with the Small Business Administration Guidance and Resources page to learn about the latest developments regarding assistance programs and other crucial information.
Credibly also put together its own guide to help small businesses navigate the pandemic, including information on loans, managing cash flow, caring for employees, and reassuring existing customers.
Announcing Asset-Backed Securities
Bumbales said a major development for Credibly is its recently announced securitization — the first issuer in the space to introduce ABS funding to small businesses in 2021.
“It’s something that’s really interesting that might give us arguably the best cost of capital in the alternative lending space,” he said. “And we’re very adamant about giving that interest rate savings back to our merchants.”