Funding Circle announced a partnership last month with global mailing company Pitney Bowes Inc. to provide loans to small business customers, focusing more on embedded finance than ever before.
SVP and President of Pitney Bowes Financial Services Christopher Johnson said the move positions the firm for long-term growth, one of many in mind to offer a full suite of services to customers.
“America’s 32.5 million small businesses are the driving force behind our economy, but the number of small business loans approved by large banks has halved in just two years,” Christopher Johnson, SVP and President, Pitney Bowes Financial Services, said.
“Our partnership with Funding Circle will help business owners on Main Street get the working capital they desperately need to grow their business.”
In February, Pitney announced it would build a brand new banking platform in 2022, powered by partner Fiserv.
SMB lending, by mail?
A name not heard in the mainstream finance space for some time, Johnson ran through the firm’s history, well known for logistics and mail, but not for strict financial services like small business loans. He said the firm has always contributed to financial services by running logistics and commerce, just not in the way most customers might think.
“Most of your audience will know of the name Pitney Bowes from its mailing heritage; we have been in the mail services market for the greater part of over 100 years,” Johnson said. “What you may not be aware of is that, as in many places around the world, postage is a hard currency under the law. When you think of Pitney Bowes, it is really at the forefront, integral to this idea of commerce. Moving purchase orders or invoices are the foundation building blocks of business?”
If Pitney Bowes has been an originator of secure mail by sending orders and invoices across the U.S. and the globe, Johnson said you could consider them a long-time member in banking and financial services, enabling SMBs to transact and move goods.
Pitney pushing for more
He said in the past five years, the firm has been pushing to offer more than mail and logistical services. He said partnering with a leading online SMB lender is precisely the type of move the firm needs to make to provide better services to customers and get access to the capital they need to conduct commerce.
“We have been moving from what I would say is a niche provider of financial services to more of a mainstream, more consequential provider of value in this financial services space,” Johnson said. “This small business lending space is highly fragmented and very much underserved.”
Powered by Funding Circle, Pitney Bowes will offer small business term loans to their customers and will benefit from Funding Circle’s streamlined online application and loan origination process. Like other partners using Funding Circles tech, customers will be able to get access to critical funds in as little as 48 hours, Johnson said.
Long-running industrial bank
Not convinced that logistical services are financial services? Johnson said the move involves Pitney Bowes’ banking arm and an institution with an industrial loan chartered bank license that has operated for more than 24 years.
Joining the list of Pitney Bowes’ banking products for business, like revolving lines of credit and working capital or equipment financing, Funding Circle’s lending will allow them to go “further faster.”
“This will allow us to leverage some of that digital financial services capability with a world-class customer focus built around it,” he said. “We can meet many of the greater than 700,000 customers we have today in our portfolio and beyond.”
Drawing from Funding Circle data, Johnson said the pilot program aims to advance the lending experience when many SMBs are looking for funding. Seventy-two percent of owners said they feel they need financing this year, according to Funding Circle’s 2021 Small Business Survey.
Vipul Chhabra, MD of Funding Circle U.S., said the firm is excited to offer its machine learning tech platform to Pitney Bowes customers. He said more than one-third of business owners see 2022 as the year to grow, but many are held back by their access to capital. Funding Circle is committed to helping these businesses unlock the finance they need to grow and power the economic recovery, he said in a release.
“We share a common mission with Pitney Bowes to break down barriers and help make access to finance easier for all SMBs,” Chhabra said. “This lending as a service partnership showcases the strength of our machine learning and tech platform to help customers access funding simply and seamlessly.”
