Small Business Administration (SBA) lending is the lifeblood of entrepreneurship, fueling innovation and economic growth. It's a crucial form of lending for the vitality of our economy, given that small businesses are often the drivers of job creation and technological advancement.
Yet there is still an opportunity for small businesses to get even more access to funds, and it is an issue the sector has wrestled with for a long time. That said, the problem would not be as challenging to surmount if it weren't for the intricacies behind it. These arise from several factors—mainly related to how complicated small business lending is to begin with. Extensive paperwork gathering, a large number of forms to fill out, and enormous amounts of data to comb through make the process expensive and time-consuming for lenders.
For businesses looking to borrow, especially women, veteran, and minority-owned ones, this complexity can make it challenging to get the funding they need. Due to the expense and time required by traditional lenders to process an application, lenders tend to focus the limited resources they have on larger loan amounts.
This means if a borrower is seeking a lower loan amount (which women, veterans, and minority-owned businesses disproportionately are), they tend to have a more challenging time getting financing for their business. Since they have this challenge with traditional lenders like banks or credit unions, many borrowers are forced to turn to FinTech lenders who have expeditious processing times but also charge exorbitant fees as a result.
To add salt to the wound, these issues are further compounded by things like fragmented financial data and strong risk models, perpetuating the limited access complexities and leaving potential borrowers overwhelmed and discouraged.
But it's not all hopeless. Tackling these issues head-on, iBusiness Funding, a lending software and services provider led by the visionary Justin Levy, has been making waves with its innovative approach to small business lending, driving the change toward a brighter and more equitable future. Its LenderAI software can be used by banks and credit unions to streamline their SBA lending so they can help more borrowers. They also offer services alongside their LenderAI technology called Lending as a Service (LaaS), where they can also provide teams of people who work on behalf of a lender who may not have all the resources to process, underwrite, or close an SBA loan already. This unique positioning allows lenders of all shapes and sizes to find a solution that ultimately allows them to serve more borrowers than they can today without sacrificing profitability or compliance.
"Our mission is to get much-needed capital in the hands of smaller and medium-sized businesses—transparently and efficiently," says Levy.
Driving this mission forward is iBusiness Funding's unique integration of digital technology into the lending sector. Harnessing the power of artificial intelligence, the company has transformed loan processing with its flagship product, LenderAI.
Designed for more sophisticated lenders, Lender AI helps individuals run their SBA lending business more efficiently by allowing them to manage all segments of the lending process, from sales to underwriting, closing, and servicing. One way this technology helps streamline the process from the start is the use of digital forms and auto-filling subsequent ones. "The LenderAI software facilitates digital interaction with clients, where data inputted by the client is auto-filled into the necessary fields required by lenders," Levy explains.
For those who need a bit more than software, iBusiness Funding's innovative Lending as a Service (Laas) product has been an indispensable ally for smaller banks and lenders. Since they might not have enough resources to handle the workload, they can outsource their SBA lending program to iBusiness Funding and know that every step of the process will be handled compliantly and efficiently by a dedicated, experienced team.
"To perform our Lending as a Service (LaaS) functions, our team uses Lender AI technology on behalf of our clients and enables the entire lending process for them. The client gets a more simplified version of the software, which still allows our lender clients total transparency as to what our team is doing," Levy explains.
Furthermore, for borrowers, Lender AI has been an invaluable partner in getting through the application process quickly and easily. Its ability to predict the relevant documentation and potentially any additional ones that may appear along the way has facilitated the process and made lending more accurate, reliable, and transparent.
The impact of iBusiness Funding's methodology is as significant and far-reaching for its clients as it is for the company itself. Today, they're projecting over $200 million in SBA loans processed this year, underscoring the scalability of the technology.
Beyond this unrivaled efficiency, iBusiness Funding's digitization efforts have been instrumental in promoting financial inclusion. An impressive 75% of their lending is directed toward businesses owned by women, minorities, or veterans.
"We're committed to leveling the playing field," Levy emphasizes. "We want to see a more diverse and more inclusive business lending landscape in the foreseeable future and put the times of exclusion far behind us."
Scaling in the SBA lending industry is no walk in the park. It requires all departments to grow in tandem. Yet, iBusiness Funding continues to rise to the occasion, setting its sights on an even larger goal—processing $400 million in 2024.
As ambitious as the goals might be, for a company so driven and committed to its goals, no obstacle seems too high. As they continue to break down barriers and redefine what's possible, one thing is clear: iBusiness Funding is not just a participant in the digital revolution of the lending sector—they're leading it.
