Intuit & Fundbox Aim to Fix Small Biz ‘Working Capital Gap’

Tired of waiting to get paid? Now businesses that use QuickBooks don’t have to put their growth plans on hold until their clients decide to pay up.

Intuit, makers of the popular QuickBooks accounting software, today announced a partnership with Fundbox that helps bridge the “working capital gap” for small businesses waiting for outstanding invoices to get paid, Jeff Kaufman of QuickBooks Financing told Small Business Computing. Fundbox, a San Francisco-based technology company, employs financial analytics to evaluate a small business or freelancer’s invoices and then fund them.

As a new partner in Intuit’s credit-and-loan platform, QuickBooks Financing, FundBox can now help QuickBooks and QuickBooks Online customers “get the money from the invoice within minutes.”

Small Business Cash Flow Crisis

Among the most elusive business goals for many entrepreneurs is a steady flow of cash, according to Kaufman. Clients have a habit of losing track of time, turning net-30 terms on invoices into mere suggestions rather than hard deadlines.

Unwilling to risk losing valuable and potentially lucrative business, many startups and small companies just sit and wait until the funds finally hit their bank accounts. There’s untapped value in unpaid invoices, and innovative online financing options are helping entrepreneurs retrieve that most precious of resources: time.

Small business financing: finance the value of outstanding invoices

And increasingly, small businesses are turning to online lending to fuel their growth and to save time in the process. In a new report from Intuit, Emergent Research forecast that online lending to small businesses would balloon to $83 billion in 2020 from $9 billion in 2015.

“Online lenders are filling the void left by traditional lenders who are reducing their focus on small businesses, particularly loans under $1 million,” observed Steve King, partner at Emergent Research, in a written statement. “These new online players are providing capital to small businesses with greater efficiency, speed, and convenience.”

By supporting Fundbox’s lending platform in the QuickBooks ecosystem, the companies help small businesses “unlock the receivable,” Kaufman said. Instead of waiting weeks, applicants “get money from the invoice within minutes.”

QuickBook Finance’s aims to make small business financing—from lines of credit to long-term loans—expedient and frictionless, Kaufman said. Whether they’re software developers or caterers, entrepreneurs often face a choice between attending to their customers and filling out a lengthy loan application.

Small Business Time Crunch

On average, a small business loan requires spending “33 hours on paperwork,” said Kaufman.  Then it typically takes a nerve-wracking week-and-a-half to get an answer.

QuickBooks Financing has a home-court advantage, of sorts. “We use applicants QuickBooks Online data to help pre-populate the applications,” said Kaufman. Applicants remain firmly in control, and they get to determine whether they want loan providers to have access to their data, he stressed. To date, the platform has provided $260 million in funding.

Fundbox CEO Eyal Shinar said in prepared remarks that his company’s technology “leverages deep data analytics, artificial financial intelligence and predictive modeling to give small businesses credit-on-demand.  Combined with the rich data from QuickBooks, we’re giving small businesses unprecedented flexibility and control over their cash flow.”

And unlike the traditional factoring system of financing, where a creditor essentially buys outstanding invoices, Fundbox customers continue to “own” their invoices, said Kaufman. If approved, customers can finance for the value of those invoices for up to 12 weeks at most rates. In a company-supplied example, the fee for an advance on a $1,000 invoice amounts to $3 to $5 per week, on average.

Pedro Hernandez is a contributing editor at Small Business Computing. Follow him on Twitter @ecoINSITE.

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