Presented by Intuit
As Intuit builds up momentum heading toward the fourth annual QuickBooks Connect conference, they’ve announced two major new products: the new QuickBooks Capital loan offering, which is tailor-made for new small businesses, and a new payment strategy that helps small businesses get paid up to two times faster.
The small business challenge
There are over 800 million small businesses around the world, says Alex Chriss, SVP and chief product officer for QuickBooks. They make up 98 percent of all businesses and employ 60 percent of the global workforce. New businesses are the growth engine of the economy, generating twice as many jobs as more established businesses. Yet they face serious challenges finding lasting success, with about half of all businesses ceasing operation within five years.
“As big as that population is, many of those small businesses and self-employed face very common challenges in their day-to-day lives,” Chriss says. “At Intuit, we’re laser focused on using the power of the QuickBooks ecosystem to tip the world in favor of small businesses and the self-employed.”
Growing a business requires money, whether it is new revenue opportunities, buying inventory, or hiring additional employees. According to the Federal Reserve, 70 percent of new businesses say they need funding to grow, yet only 23 percent of new companies are approved for loans. And even among the small minority who are approved, there is deep dissatisfaction with the process. Fewer than 50 percent of borrowers are satisfied with the current lending experience.
In order for a traditional bank or financial institution to assess the creditworthiness of a small business that needs access to capital, lenders need history. In other words, what have you done in the past, and what’s your track record of payments?
“And if you’re new, which ironically happens to be the folks that need the money the most, they just don’t have it,” Chriss says. “With QuickBooks Capital, the situation looks totally different. We’re using advanced data science to give small businesses as young as six months the ability to qualify for loans.”
QuickBooks Capital employs a breakthrough credit model powered by more than 26 billion QuickBooks data points to give small businesses access to funding at the moment of need.
Small businesses use their own QuickBooks data to provide an automated, comprehensive view of what’s happening with their business. And because there are more than 2.3 million QuickBooks users, it is easy for Intuit to see how a small business stacks up against others like them.
“We give small businesses the ability to get credit for future profits by looking at things such as open invoices,” explains Chriss. “Using machine learning, we’re able to predict when those invoices are likely to be paid, thereby providing an extremely detailed picture of a businesses’ cash flow.”
The working capital loans currently offered range from $5,000 up to $35,000, with a term between 3 and 6 months. Other than interest cost, there are no origination fees or prepayment penalties, and the APR is transparent from the start.
The solution is already making a difference. Intuit says. Sixty percent of QuickBooks Capital customers would likely never have gotten a loan elsewhere, 46 percent of customers had never even applied for a loan before, and 90 percent are using the loans to fuel growth.
But while funding offers a business the essential foundation they need to get established or grow, they also need to keep bringing in revenue. And it’s a bigger challenge than it seems.
It takes, on average, 45 days for small businesses to get paid after they send an invoice, Chriss says, and 64 percent of small businesses have an invoice that’s been outstanding for over 60 days.
“This cash flow challenge means they’re living paycheck to paycheck, or work invoice to invoice,” Chriss says. “That can become really painful.”
Intuit’s new QuickBooks Payments strategy eliminates the biggest hurdle to getting paid by replacing outdated, manual methods of sending invoices with “pay-enabled” electronic invoices.
When the customer opens up the invoice, they can’t miss the Pay Now link. They’re afforded the opportunity to pay online by credit card or free bank transfer, with Apple Pay and PayPal integrations coming soon. Intuit says that businesses using QuickBooks Payments are getting paid up to two times faster.
Intuit is also using machine learning to help small businesses see what’s happening with their invoices every step of the way. QuickBooks shows them when their customers receive the invoice and when they open it up, and alerts them when they’re paid.
The new payments strategy also includes a partnership with Google. Small businesses using a Gmail account can now send QuickBooks invoices from within Gmail, view the status and get paid online. This functionality is available to all small businesses who use Gmail, whether they are one of the 2.3 million QuickBooks customers or not.
The partnership also means that small businesses can seamlessly add events and descriptions from Google Calendar to QuickBooks invoices, and easily import G Suite Contacts.
Intuit will be hosting its fourth annual QuickBooks Connect conference from November 15 to 17. The conference brings together small business owners, self-employed individuals, accountants and developers.
To learn more about this year’s conference in San Jose, November 15 to 17, and to register, check out the QuickBooks Connect site now.
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