FinTech Foro launches platform for corporate lending
FinTech startup Foro has launched a commercial lending platform designed to match lenders and businesses.
“For most small and medium-sized businesses, finding a commercial lending partner — much less one that’s a good fit for their capital needs — is driven by an old-fashioned, relationship-based model,” Foro said in a Thursday (Jan. 26) news release.
“The initial investigation and discovery process can take as long as 30 days, as many businesses struggle to tell their story effectively while financial institutions are left to filter through thousands of applications, the vast majority of which they have no interest in lending to,” the firm added.
The Charlotte, North Carolina-based company, in stealth mode until this week, says its platform connects businesses and lenders “based purely on fit” while reducing the initial discovery period from 30 days to one week.
Foro says the platform allows businesses to fill out a profile that focuses on the specific questions lenders want answered. From there, the profile is anonymised and routed for a match with banks, credit unions and alternative lenders.
Business owners will get a list of lenders interested in as little as 48 hours, Foro said, allowing them to choose from multiple financial institutions (FIs), who in turn get “verified, high-quality leads that meet their lending strategies and goals.”
As working capital from traditional lenders disappears, SMEs are seeking new funding from digital channels.
Recent research from PYMNTS shows that small and medium-sized enterprises (SMEs) strive for new sources of working capital when dealing with higher supplier and operating costs.
“The pressure to find the right working capital solution is increasing, with a survey finding that major banks’ business loan approval rates fell to just below 15%, a 10-month low,” PYMNTS wrote in “Digital Banking Rises To Meet SMB Needs,” a collaborative with NCR.
“Alternative lending saw the biggest increase of nearly 2%, meaning small businesses are increasingly looking to FinTechs and digital-first offerings to deal with cost pressures.”
SMEs need capital to pay the costs of the digital technology that helps with efficiency and operational improvements. According to the report, 24% of SMEs are concerned about obtaining affordable financing, an existential threat for many owners.
The study also notes that traditional banks typically do not offer online account opening or lending for SMEs and that “the current process can take one to two weeks and requires a visit to the bank” to apply for a small business loan, leading to apprehension among SMEs – is to turn more to digital sources.
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