June 17, 2015
by Bob Coleman
Editor, C-Suite Small Business Lending
I don’t know why UPS didn’t do this years ago — using their data to credit score small business loans.
I have been a UPS customer for 20 years.
Think about all the data they have on me.
•Monthly shipping costs
•Whether I pay my bill on time
•Who my customers are
If they see a rise in my shipping costs, they would assume a rise in revenues.
You need to understand your customers are starting to be bombarded with lending offers from numerous alternative lenders who are clearly thinking outside the box.
I digress. Whenever I check my AR aging in Quickbooks, I receive offers to finance the receivable.
Back to Brown.
Yesterday, UPS announced a partnership with online lender Kabbage.
This announcement, on top of the Goldman Sachs yesterday declaration of war on “brick and mortar” small business lenders demands a strategy from you to make sure your long-term loan customers are not over leveraging themselves from the bevy of offers of easy, and very expensive, short-term money.
Kabbage is an alternative small business lender using multiple data points to assess risk in small business loans.
“Small businesses are essential to America’s economy, as they are responsible for two out of every three new jobs in the United States,” says Ronald Chang, president of UPS Capital. “Since the recession, small businesses have had a difficult time accessing the capital they need to manage cash flow, hire new employees or purchase new inventory and equipment. By partnering with Kabbage, UPS Capital can now help more small businesses grow and achieve their potential.”
“UPS has been an important investor and partner for Kabbage since we launched four years ago,” says Rob Frohwein, Kabbage co-founder and CEO. “We are thrilled to expand this relationship today to be able to seamlessly deliver capital to millions of UPS small business customers.”