By Rieva Lesonsky
Most innovations start with a question. What if…? Why not…? At Fundbox, a leading Fintech company, the question was “How do we transform the B2B user experience and offer credit-building products at the point of need?”
That is what, says Sebastian Rymarz, Fundbox’s Chief Business Officer, led to the introduction last week of Fundbox Pay, a disruptive technology designed to bring the “the speed, convenience and certainty of B2C transactions to the world of B2B.”
This new e-commerce checkout feature grants credit approval (using machine learning and AI) in under three minutes. Rymarz explains, “Since it’s so quick we can be inside the checkout flow.” This allows customers who are approved for credit to buy more on the spot, helping them get the products they need, and helping the buyer sell more goods.
Think of this as the equivalent of a consumer going to a store (or buying online) and before the transaction is completed, they’re asked, “Do you want to apply for a credit card?” And they get a decision in minutes.
There’s a lot of money in play here. A 2017 Forrester Research report estimates “U.S. [B2B] e-commerce transactions [alone] will reach $1.2 trillion by 2021,” accounting for over 13% of all B2B sales in the U.S. Overall, Rymarz says there’s about $24 trillion flowing to B2B businesses, three times the consumer money flow. And $9 trillion of that flows through SMBs.
In the narrower world of small business, the company sees Fundbox Pay as freeing business owners from being held “hostage” to “asynchronous transactions caused by paper checks, invoices and extended terms which, disrupt cash flow, delay business deals and impede accelerated growth.”
Fundbox analyzed its own proprietary business graph and learned the average SMB “has 24% of its monthly revenue tied up in accounts receivable/terms or trade credit.” Taking advantage of Fundbox Pay, B2B sellers don’t have to wait to get paid—and can avoid chasing money if buyers don’t pay their invoices.
Once a buyer is approved for credit, Fundbox pays the seller for the full amount (minus a small fee). The buyer has 60 days to pay the money back without being charged interest. If they need more time, they can extend payments for up to a year for a small weekly fee. And, there is no pre-payment penalty.
All this innovation is enabled by what Rymarz calls the “the tectonic shift in the data landscape,” where all relevant financial information about a company is stored in the cloud. Instead of traditional loans, Rymarz says, which look at FICO, cash and tax information, and “leave most small businesses out,” Fundbox can tap into a company’s accounting systems, invoicing platforms and bank data to make its insta-decision.
Fundbox technology works with most popular accounting software programs, such as QuickBooks, FreshBooks and Zoho.
Fundbox isn’t done disrupting the SMB payment space. Their approach is to, Rymarz says, “do data differently” and ask the question, “How can we use it in a transformative way?” They’re already working on some new answers.
Fundbox is a client of our company.