Online Lenders

Forget about digital marketing, SMB lenders double down on partnerships for growth

  • Direct and digital marketing play a role in growing underwriting for top SMB lenders.
  • But it's partnerships that provide the real key to growth.
close

Email a Friend

Forget about digital marketing, SMB lenders double down on partnerships for growth

It continues to be a challenge for SMB lenders to get in front of their prospects. And while many of the top players in the space do direct and digital marketing, it’s really partnerships that help them scale their originations.

Just three years ago when Luke Voiles arrived at Intuit to lead the firm’s direct lending efforts, the firm acted solely as a broker, routing SMB prospects to a handful of lending partners. Firms like BlueVine use the QuickBooks ecosystem to find new SMB borrowers. Intuit still has that business, even as it now originates its own loans via QuickBooks Capital.

“Intuit’s core focus and goal is to make sure our customers have access to capital,” said Voiles on a Tearsheet webinar on SMB lending trends in 2019. “It doesn’t need to come from us. If BlueVine has a line of credit and factoring product — two things we don’t offer ourselves — we want to make sure our customers can access that BlueVine product as simply and efficiently as possible.”

With five million SMB customers in the U.S. using QuickBooks Desktop and QuickBooks Online, Intuit’s QuickBook Capital is a different animal than other lenders.  Where other lenders need to constantly figure out where to acquire their next customer, QuickBooks Capital spends its resources figuring out how to service the customers it already has.

Intuit sees partnerships as an extension of the lending products it offers customers. With a mixture of direct partners and a more open app store, fintech firms are able to reach SMBs in ways they couldn’t before. As an ecosystem, that’s a win-win-win for Intuit, SMB customers and third party lenders. “So for us, the more open and active our ecosystem is, with our partners serving our customers, the better,” said Voiles.

Partnerships also play a key role in growth for BlueVine. The company has over 300 partners it works with to acquire new customers. These range from collaborations with large partners like Intuit and QuickBooks to ISOs and brokers.

Partners enable BlueVine to reach more small businesses. “Working with partners helps us to significantly increase our reach,” said Eyal Lifshitz, founder and CEO of BlueVine. “It’s a very scalable and profitable way to reach customers.”

There’s an added benefit for SMB lenders to partner with more established firms: branding. The trust built up with a large partner rubs off on a growing firm when it aligns with a more established firm to co-market their services.

Most lenders use a portfolio approach when crafting partnerships. For a lender hungry to grow underwriting, there isn’t a single partner that can provide the growth that SMB lenders are looking for. “I joke around that there are a thousand shitty ways to acquire a customer and we need to be good at all of them,” said Rob Frohwein, co-founder and CEO of Kabbage.

One of the oldest mature digital lenders, Kabbage has used partnerships to help fuel its growth. Kabbage has about 350 distribution partners and made a conscious decision to avoid brokers. “From our perspective, we tested the broker model five years ago. We believe there’s a misalignment with how you pay a broker, on the base of originations ,and the performance of the customer. ”

Kabbage recently announced a partnership with Alibaba.com where it will provide point of sale financing on the Chinese B2B marketplace. A customer that gets to checkout can choose to finance that purchase via Kabbage. The company also has partnerships with UPS and FleetCor that act as a channel to deliver SMB loans to many customers.

“Partnerships are critical to the growth of the business,” Frohwein said.

0 comments on “Forget about digital marketing, SMB lenders double down on partnerships for growth”

Member Exclusive, Online Lenders

As Feds increase fintech scrutiny, experts outline a BNPL regulatory framework

  • After experiencing a meteoric rise in recent years, the BNPL industry is bracing itself for increased regulation in the US as government agencies are looking to widen their oversight into the fintech sector.
  • With concerning signs regarding credit quality, risk intake and its effects on consumers, industry experts are advocating for more regulations and offer recommendations of what these could look like.
Iulia Ciutina | May 04, 2022
Member Exclusive, Online Lenders

Lending Briefing: BNPL regulation and the growing digital lending market

  • The BNPL market needs more regulatory oversight in order for consumers to be protected, new research suggests.
  • The fast-growing BNPL industry exists in a legal gray space and mostly consists of subprime borrowing, and pure players are yet to demonstrate profitability.
Iulia Ciutina | April 27, 2022
Online Lenders

Deserve’s CEO on the fintech’s new corporate credit card as a service offering

  • White label commercial credit is blooming, aiming to help companies serve other businesses by giving them easy access to capital. In our latest briefing, we spoke with Deserve's CEO Kalpesh Kapadia on the fintech's new commercial platform.
  • In other developments, community banks are partnering with crypto lenders - selling loans to a crypto trust and converting the cryptocurrency in fiat dollars to continue writing more loans.
Iulia Ciutina | April 18, 2022
Online Lenders

This week in lending: 2021 BNPL results, credit markets poised for growth this year

  • US BNPL players are pursuing aggressive growth strategies, but underlying performances are beginning to surface some concerns in the market.
  • After the pandemic made lenders cautious, credit markets have opened again in 2021, thanks to positive economic signs from borrowers.
Iulia Ciutina | March 18, 2022
Member Exclusive, Online Lenders

Lending Briefing: 2021 BNPL results, C&I lending picking up again

  • US BNPL players are pursuing aggressive growth strategies, but doesn’t necessarily mean healthy growth - underlying performances are beginning to surface some concerns in the market.
  • In commercial and industrial lending, volumes are picking up for the third consecutive quarter since the onset of the pandemic.
Iulia Ciutina | March 16, 2022
More Articles