Even though my colleague David Gustin covers such topics in much greater detail on Trade Financing Matters, I find fascinating the early fronts that appear to be forming in the battle for lending and small business financing — beyond the traditional arms of banks, invoice discounting and card programs. The Wall Street Journal recently covered how Intuit’s QuickBooks and OnDeck are partnering to offer loans based on invoice information, receivables and other information contained within a company’s general ledger on the system.
QuickBooks has piloted such efforts to date. As the story notes, “Over the past two years, QuickBooks customers have taken out roughly 5,000 loans totaling about $200 million, with Intuit receiving a referral or origination fee.” These loans have been at high rates, approaching that of the factoring market. The WSJ observes that “loan demand has been modest, in part because many loans carry annual rates of around 30%, well above the 5% to 6% banks typically charge small businesses with good credit.”
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