Rapid Finance, a leading small business financing platform helping small businesses find customized solutions, announced today that following a successful pilot launch in April 2024, its Rapid Access Card is now available to all eligible Line of Credit (LOC) clients.
The Rapid Access Card, a collaboration between Rapid Finance and Galileo Financial Technologies, a leading financial technology company owned by SoFi Technologies, Inc. (NASDAQ: SOFI), provides small business clients quick and flexible access to their Business LOC funds. This innovative card empowers small businesses with greater convenience when accessing their LOC funds, enabling them to maintain operations and seize new growth opportunities. Existing and new Rapid Finance LOC clients who meet the eligibility requirements may qualify for the Rapid Access Card.
The Rapid Access Card can be used for purchases wherever Mastercard is accepted, and cardholders will fund the card with a draw from their LOC account. Eligible new clients will automatically receive their card within 5-7 business days of opening their LOC, and clients with business lines of credit funded before Oct. 25, 2024, will also have the option to order a card.
“Empowering small businesses with flexible, convenient finance solutions is our mission and through our Rapid Access Prepaid Mastercard Program, small business owners are better positioned to grow their business by more effectively managing their cash flow and capitalizing on emerging market opportunities,” said Will Tumulty, CEO of Rapid Finance.
The Rapid Finance Prepaid Mastercard is issued by SoFi Bank, N.A., pursuant to a Mastercard license. The Rapid Finance Line of Credit is not a SoFi Bank product or service. All loans are funded and originated by Rapid Finance and are not affiliated with SoFi Bank.
In a series of podcasts taped live at 2024’s Money 20/20 in Las Vegas, host Lou Carlozo brings you the latest from one of the premier financial services conferences in the world. In this episode, Will Tumulty of Rapid Finance talks about the needs small business owners face as an overlooked clientele. He describes how his company is working to meet those needs and in the process, combine technology and smart customer interaction to paint a new picture of how SMB business is done.
In an era of data-driven loan decisioning, bankers are working to better integrate and utilize their existing customer data more effectively, particularly for their business banking customers. The challenge for many lies in organizing large volumes of data from multiple sources, often stored in disparate systems, that prevent banks from having a truly comprehensive view of their customers.
Despite significant investments in data stores and extraction, transformation and loading (ETL) processing, this data fragmentation poses considerable challenges that lead to inefficiencies in operations, customer onboarding and risk management. More importantly, this lack of integration across data sources increases the bank’s potential exposure to fraud.
Historically, FIs have turned to data orchestration solutions to manage the influx of data from various sources. These platforms typically focus on optimizing data costs and identifying hard-rule declines to save on human processing time. While these solutions provide some value, they often fall short in key areas.
One major limitation is the lack of integration with historical enterprise data. Traditional platforms are generally designed to manage external data sources but fail to incorporate the institution’s own historical data. This omission means that banks cannot fully leverage their past experiences — whether positive or negative — in their decision-making processes.
Another notable flaw is the absence of consistent data schemas that are essential in supporting today’s AI modeling systems. Without a standardized approach to data management, banks face difficulties in extracting meaningful, actionable insights from their data, further increasing ETL expenses. These limitations underscore the need for more advanced solutions that can address the complexities of modern data management.
Identifying fraud through data analytics
Enhanced data analytics often reveal to bankers that small business loans written off as losses typically share common data attributes with other bad loans. This is not limited to obvious data elements, like business EINs or owner Social Security numbers, but also things like secondary contact telephone numbers, nearby street addresses, IP addresses and/or device IDs. Had these loan application-related data elements been readily accessible to underwriters from the start, they could have identified and declined these risky (or fraudulent) loans at the point of application.
Here’s a common fraudulent scenario that a bank might encounter: A business unfamiliar to the bank applies for financing. Identity validations for the business and the business owner initially look good, but there are several related applications based on matching device IDs and bank account numbers coming from totally different businesses, which raises a red flag. With advanced data analytics, the bank could then see that two of these related applications were previously identified as fraudulent and declined. From here, the bank can set up a rule within the automated platform to route applications with this related application fraud pattern to manual review or it can have the system simply decline future applications outright. One of the key benefits of these platforms is their ability to generate AI-driven insights. Through the use of pattern-matching algorithms and machine learning models, bankers can identify relationships and trends within their data that would otherwise go unnoticed.
In today’s lending market, business banking customers expect the same level of speed and convenience as consumers enjoy. By integrating historical data, third-party insights and real-time monitoring, modern data platforms are enabling bankers to make more informed, data-driven decisions in a way that meets customer service expectations, effectively reducing friction for legitimate customers while quickly identifying and rejecting fraudulent applications.
For commercial and business loan portfolio management, these data insights allow bankers to optimize their risk management strategies. By analyzing historical data alongside real-time information, banks can better understand the performance of their portfolios, identify emerging risks and take proactive measures to mitigate them, ultimately resulting in healthier portfolios and improved financial outcomes over time.
In an increasingly complex and data-driven financial landscape, the ability to effectively manage and leverage actionable data is critical for success. By transforming fragmented data into a strategic asset, modern business lending platforms are not only improving operational efficiency but also driving revenue growth for financial institutions.
Will Tumulty is CEO of Rapid Finance, which provides working capital to small and mid-sized businesses in the United States and enterprise solutions to enable lenders to serve small business borrowers.
BETHESDA, Md.–(BUSINESS WIRE)–Rapid Finance, a leading small business banking platform specializing in providing customized financing solutions, announced the availability of its SMB Disclosure Service, a standalone Software-as-a-Service (SaaS) Regtech Module, to assist business funders and financing companies comply with Connecticut’s commercial disclosure requirements which took effect on July 1, 2024.
Connecticut’s commercial financing disclosure law applies to financing amounts of $250,000 or less, requiring funders involved in sales-based financing to provide disclosures to businesses seeking working capital. Also, any funders or financing companies in the state must register with the Connecticut Department of Banking starting October 1, 2024.
Connecticut’s adoption of financing disclosure requirements is part of a growing trend of state-specific regulatory laws that prioritize transparency, equitable business practices and borrower safeguards. Other states such as New York, California, Utah, Florida, Georgia, Kansas and Virginia have also enacted similar commercial financing disclosure laws that aim to standardize disclosures for commercial financing below a certain principal financing amount.
“More states are beginning to adopt laws that help small business applicants make better informed decisions during the loan application process,” said Will Tumlty, CEO at Rapid Finance. “However, we recognize that remaining up to date on state-specific commercial financing regulations can be daunting for SMB lenders and finance companies. Rapid’s SMB Disclosure Service simplifies this process and is tailored to help lenders ensure compliance while navigating an ever-changing regulatory landscape.”
Funders can either integrate their existing loan or financing origination platforms with Rapid Finance’s SMB Disclosure API or leverage a user interface to access required statements. This allows commercial finance providers to deliver disclosures that comply with regulatory standards and ensures clarity on offerings for both HTML and PDF formats.
For funders seeking additional financing solutions, Rapid Finance offers a comprehensive suite of technology to optimize SMB lending capabilities. Rapid’s modular and composable origination system provides lenders with a foundational platform that streamlines the lending process and integrates seamlessly with existing systems.
Rapid Finance’s team is proactively monitoring additional state regulations in this space and will continue to add new states as similar laws come into effect. To learn more, contact EnterpriseSales@rapidfinance.com.
About Rapid Finance
Since 2005, Rapid Finance has been supporting the growth and success of small businesses across the U.S. Powered by a thoughtful combination of technology, speed and deep industry expertise, Rapid Finance provides modular, flexible and scalable financing solutions to small businesses, as well as Lending-as-a-Service solutions customized to meet enterprise clients’ needs. Learn more at www.rapidfinance.com.
The demand for innovative small business financing solutions is growing as the nation’s economic environment continues to evolve.
Small businesses are an economic boon, accounting for over 99% of all businesses in the Unites States. The sad reality is that 38% of businesses lack the working capital necessary to finance their operations. This presents a strategic opportunity for community banks to grow their business banking initiatives and lending portfolios.
Small business financing is now a strategic differentiator and those institutions that are succeeding are the ones that have seamlessly incorporated new technology, adopted customer-centric approaches and employed collaborative strategies with the small businesses they serve.
Developing a small business lending strategy
For bankers, the key lies in providing business banking customers with quick decisions and access to funds. Like consumer lending, delivering a seamless lending experience has become mission-critical for small business financing as well. Response speed is paramount for small business owners who require fast access to capital in order to maximize emerging market opportunities or address unexpected expenses.
Unlike consumer underwriting, evaluating loan applications for small businesses requires additional data points and verifications including KYC/KYB compliance, cash flow analysis, and debt-to-income ratio assessments – a level of scrutiny that many community financial institutions may currently struggle to provide quickly and accurately.
Bankers are seeking ways to meet the needs of their small business customers while capitalizing on the demand for “lower dollar” small business financing. However, providing a better, faster customer experience at a lower acquisition cost can be a challenge.
Traditionally, community banks have turned to their core systems providers, but these systems are ill-equipped for small business financing. Banks require an efficient and cost-effective means of supporting loan applications, decisioning and funding for small business owners in need of immediate capital. Community banks are addressing this challenge by leveraging Lending-as-a-Service (LaaS) technology strategies to promote efficient underwriting and enhance the digital customer journey through an automated, data-driven process that integrates directly into their existing tech stacks.
Implementing highly configurable LaaS platforms is an effective way to meet the needs of a bank’s specific loan programs, as well as meeting regulatory requirements. If a bank is not already actively engaged in small business lending, LaaS solutions can provide an entry point for participation. Moreover, banks with established small business lending programs can use LaaS solutions to enhance their decisioning timeframe and accuracy for commercial lending.
Providing flexible financing options
Flexible financing options are also a differentiator. Providing flexible, real-time access to capital with management controls (like variable spending limits) allows small businesses to leverage their funds more effectively and safely. Instead of relying on banks’ operating hours and traditional methods like ACH and wire transfers, small business customers with a Business Line of Credit (LOC) can gain instant access through payment card access. This enables small business owners to control the amount they draw from their LOC to only the funds they immediately need and reduces their exposure to potential fraud compared to traditional small business credit cards.
LOC payment cardholders benefit from 24/7 access to funds along with a digital-first process from application to funding. These types of card services provide small business owners with the ability to access working capital anytime and anywhere.
Small business financing creates ‘stickier’ deposits
In today’s market, bankers are chasing “stickier” deposits and small business lending represents a prime opportunity. Small businesses take many shapes and forms, from traditional brick-and-mortar retailers and restaurants, to contracted service providers like landscapers, to professional services like accountants and physicians, to any number of part-time side hustles to generate additional income.
Small business owners typically maintain their checking and personal banking relationships at different institutions, but there is demand from small business account holders to consolidate their personal and business banking with a single partner. This segment of customers represents a significant opportunity for banks to grow their deposit base and retain existing customers.
Perhaps most appealing, small business checking accounts tend to be “sticker” compared to other depository accounts. Unlike other asset types, these accounts often have higher average balances, generate more transaction fee revenue, and demonstrate greater levels of stability over time.
Small business owners and the bankers who support them play an important role in the economic health of the communities they serve. By adopting more innovative business banking solutions and providing more flexible, real-time financing options, bankers can better support the millions of small businesses fueling the U.S. economy and strengthen their banks’ balance sheets as well.
Will Tumulty is CEO of Rapid Finance.
Rapid Finance, a leading small business financing platform specializing in providing customized financing solutions, announced its new partnership with Texas-based Gestalt Tech, a provider of a cutting-edge data warehouse solution designed for financial institutions. Through this partnership, lenders using Gestalt can seamlessly integrate with Rapid’s small business lending automation solution, Decisioneer. Additionally, they will be able to use Lynx fraud detection to get insights on their data in Gestalt.
Through this systems integration, lenders can gain a holistic and real-time view of applicants through a frictionless, fully automated loan application and origination process that leads to faster and better-informed lending decisions. Once a loan is originated, that data is seamlessly migrated into Gestalt’s data warehousing platform where lenders can readily access, analyze and leverage it to support ongoing business intelligence (BI) initiatives.
“We’re excited to partner with Rapid Finance and continue to bring our clients innovative technology for smarter growth. We’re also looking forward to supporting Rapid’s lenders with our data warehouse solution that quickly centralizes and organizes all their data and creates new opportunities for leveraging AI,” said Stephanie Hanson, CEO and founder of Gestalt.
Rapid Finance’s Lynx is built with a modular, cloud-native API-first design that enables lenders and financing companies to drive more efficient and intelligent decisions by validating, enriching and comparing new customer applications with large databases of historical data in Gestalt. Additionally, Decisioneer is a scalable, automated end-to-end digital platform that connects lenders with real-time accounting, tax, KYC and KYB data to help accelerate origination, enhance underwriting efficiency and reduce risk in real-time.
“Gestalt’s commitment to innovation and delivering value to lenders aligns perfectly with our mission at Rapid Finance,” said Will Tumulty CEO of Rapid Finance. “By integrating our Lynx and Decisioneer platforms with Gestalt’s advanced data warehousing solutions we are able to provide a wealth of highly accurate, decision-ready data for Gestalt’s small business lending clients.”
About Gestalt
Gestalt Tech makes it possible for financial institutions of every type and size to enjoy all the benefits of a modern data warehouse without waiting or settling. FIs with a Gestalt data warehouse are more productive, save time and money, and increase trust with key partners. Data pulls that used to take months and 200+ man-hours, take less than one day. The intuitive and standardized architecture makes learning how to use it easy, and the more you use it, the smarter and more customized it gets. Like the word “gestalt”, we unify all your data to create a meaningful whole that’s greater than the sum of its parts. To learn more and schedule a data warehouse walk-thru, visit gestalttech.com.
About Rapid Finance
Since 2005, Rapid Finance has been supporting the growth and success of small businesses across the U.S. Powered by a thoughtful combination of technology, speed and deep industry expertise, Rapid Finance provides modular, flexible and scalable financing solutions to small businesses, as well as Lending-as-a-Service solutions customized to meet enterprise clients’ needs. Learn more at www.rapidfinance.com.
