Intuit Launches QuickBooks Capital to Reinvent Small Business Lending

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Intuit, Inc. has announced the opening of QuickBooks Capital. The product is the company’s innovative approach to help small businesses receive the lending they need to succeed. The company is using its experience in machine learning and data science to help judge a young small business’s credit to aid them in overcoming barriers.

The new credit model will take into account factors that traditionally hold small businesses back from getting the capital they need to find future success.

Intuit notes that young businesses are “critical to the future success of the economy.” The company also says that young businesses are “very underserved by the options available in today’s credit market.”

QuickBooks Capital will use data retrieved from direct sales and through intuit premier reseller programs utilizing the QuickBooks product. The data small businesses have in their QuickBooks account will be used as a key factor in receiving credit. QuickBooks Capital will analyze a company’s finances, business performance, history and current finances to judge whether or not a small business is approved for a loan.

Borrowers will have a quick, streamlined way to access the QuickBooks Capital product which will be inside of their daily workflow in QuickBooks. The company suggests that 60% of their customers wouldn’t be approved for a loan through traditional lenders. The company states 46% of their customers have never applied for a loan before.

Intuit hopes that QuickBooks Capital will get capital into the hands of small business owners that have credit-worthiness, but have otherwise been unable to secure a loan.

QuickBooks Capital is completely reliant on artificial intelligence to judge a loan application. The company will provide loans of up to $35,000 with access for up to six months. The finances will be available directly inside the company’s bookkeeping software.

Intuit will be lending its own money and not use a third-party lender to fulfill loans.

The company’s credit model isn’t reliant on other lender requirements. The company will use its 26 billion data points to help determine if an application is accepted or rejected. The platform will create a risk profile and offer competitive rates based on the risk associated with the loan.

Intuit has little information about their own loan statistics, as the service has been in the beta testing stage and only a select few companies have received loans. The company is confident that using their artificial intelligence and machine learning technology will result in a low default rate.

Bureau data will also be used when qualifying a company for a loan. QuickBooks Capital will provide borrowers with a loan offer that includes APR and detailed monthly payment information. Intuit reassures borrowers that the rates will be very competitive and similar to the rates provided by other lenders.

Intuit claims that their credit model is very conservative and may not provide a borrower with the entire amount requested. Counter offers will be made through the algorithm to help businesses still receive funding even if it is outside of the offer that the business initially requests.

QuickBooks Capital will continue to learn about a business’s operations and may use an initial loan as another factor to offer higher loans in the future.

Melissa Thompson writes about a wide range of topics, revealing interesting things we didn’t know before. She is a freelance USA Today producer, and a Technorati contributor.