Social media data is being used to help approve loans for small businesses. But how prepared are traditional banks to take on nimble startups?
Getting a small business loan can be arduous. Paperwork, meetings, bureaucracy – the process can often take several months or longer.
But, according to Kabbage co-founder Kathryn Petralia, it doesn’t have be this difficult. Petralia’s company is one of a number of fintech startups opening up financial systems, replacing creaking systems with fast, intuitive apps and services.th blockchain
“Our customers get through the application and have access to funds, and funds within their account, within seven minutes,” she tells WIRED.
And this sort of disruption is happening across the financial industry.
Petralia has worked with technology startups for the last twenty years, covering everything from consumer credit to e-commerce and payments. In 2008 she co-founded Kabbage, which helps smallbusiness get loans more easily. She describes most of her twenty years’ work as being “around fintech”, even though the term is relatively new.
Kabbage gives loans to small businesses – many of whom would fail to get credit from larger, traditional banks – not by spending months trawling through their financial histories, but by using what Petralia describes as a more efficient, automated platform. The company, at which Petralia is now head of operations, offers up to $100,000 (£70,000) in credit to small businesses, with an average loan of $25,000 (£17,000) typically paid back over six months.