Data
‘We’re homing in on the underserved’: Intuit wants to lend small businesses money
- Intuit launched a small-business lending product makes use of 26 billion billion data points within its QuickBooks platform.
- Intuit joins a league of fintech companies offering loans to small business owners who are underserved by larger banks.

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For small business owners, particularly in the first few years of operations, access to capital is crucial for growth. The trouble is that most large institutions can't lend to institutions that don't have a track record of success.
"I don't think big banks are designed for flexibility," said Jason Beer, owner of Pizza by the Sea, a chain of three pizza restaurants in northwestern Florida. "Their products are very rigid; they may say 'if you don't fit in those boxes, we can't tailor anything to your needs.'"
Beer solved the problem by seeking loans from a community bank. With their lack of established histories and often small-dollar (less than $250,000) asks, small business loans aren't seen be profitable by many large banks. In recent years, fintech companies like PayPal, Kabbage, the Lending Club and OnDeck rushed in to fill a void. On Tuesday, Intuit, whose products include accounting and payroll software QuickBooks, launched its own loan product for small businesses.
Through Intuit's small business lending product, called QuickBooks Capital, it will be a direct lender. Intuit is aiming at the 2.4 million business owners who use QuickBooks, who can apply for a loan from within the platform. Many of them can be approved within minutes, using what the company said is an artificial intelligence-powered algorithm that crawls through 26 billion data points within QuickBooks and third-party data. It can arrive at a near-instant on loan approvals, and business owners can borrow up to $35,000 for up to six months.
"We're homing in on the underserved," said Rania Succar, director and business leader of the QuickBooks Capital Unit at Intuit. "QuickBooks evolved from just being an accounting and bookkeeping tool to something that's driving insights and business decisions to really help [small businesses] get ahead and increase survival rates."
Aside from removing the friction from the application process, the innovation is around use of data. The credit model uses data in QuickBooks and runs data science and machine learning aspects on top of that, said Succar. As such, it can project when invoices will be paid off. "A lot of lenders can't see the full profitability of a small business; credit cards are only one piece of the puzzle," she said. A traditional lender would get aggregated financial statement as opposed to transaction-level detail."
Interest rates for our six-month loans range from 1.5 percent to 4.7 percent, but rates differ by state and the business owner's credit profile. Intuit's small business lending marketplace, which connects small business owners with other lenders, will continue to operate as part of the QuickBooks Capital platform. It's a move the company said will let customers use QuickBooks data to apply for loans from "carefully vetted" third-party lenders.
When asked about Intuit's direct loan product, Beer, a QuickBooks user, said it's a compelling offer for small businesses. Though he typically seeks loans greater then $35,000, he said it would make sense for an early-stage entrepreneur. "Say we were a single location pizza place and our walk-in cooler died and we needed a quick $10,000 to replace it, that would certainly be a product worth looking at."
On the data-sharing aspects, Beer is nervous in wake of breaches like Equifax, but he said he would be comfortable with it as long as safeguards were in place and his information wouldn't be shared with third parties. On the high rejection rate of small business owners -- Intuit reports that 60 percent of QuickBooks users would not likely to get approved for a loan elsewhere -- Beer said it may be because they look to large banks that are less flexible.
"You walk into a big bank and the chance is you're not going to see the same person twice," Beer said. "I've found a local community bank that I could work with and gotten to know a banker personally -- that's helped me not have lending issues."
For their part, large banks are beginning to recognize that early access to capital is a problem for small businesses. "We do find that for small business owners, when they start out, access to capital is an issue, and that's why you're seeing fintech companies coming in with their lending products," said Sharon Miller, managing director and head of small business at Bank of America, who acknowledged that early-stage entrepreneurs are often to rely on family, friends and credit cards.
To reach a greater a greater proportion of small business owners seeking loans from $10,000 to $250,000, the bank rolled out its Business Advantage Term loan in May. However, to be eligible, customers still need to prove they have a minimum of $100,000 in revenue and the business has to have been in operation at least two years.
And Wells Fargo, the top-ranking small business lender by dollar amount, is sitting down with business owners who weren't approved for loans to explain why. "We call people that get declined and walk them through what happened, why they got declined and what they need to do to get approved," said Lisa Stevens, president of western region regional banking, in a recent interview with Tearsheet.
For PayPal, the launch of Quickbooks Capital isn't seen as a threat, but yet another entrant in a massive space where there's room to grow, said spokesman Josh Criscoe. "Anything providing access to loans for small businesses to help them grow is a benefit to everyone."