As small businesses' demands for financial support intensify, a financial technology company participating in the Little Rock Venture Center's community banking accelerator has developed software that lets business owners receive aid more quickly during the coronavirus pandemic.
Lendsmart says its artificial intelligence-driven software "allows applicants to fill out the application form in a chat-like function" and shortens the application process for U.S. Small Business Administration loans, especially through the high-demand Paycheck Protection Program.
The Small Business Administration is working with local financial institutions to speed up the loan process and get capital into the hands of small business owners immediately. The paycheck program is part of a $349 billion loan package dedicated to small businesses whose operations are being disrupted by the viral outbreak. Loans of up to $10 million, with part of the repayment forgivable, became available to small businesses on April 3.
Lendsmart of Hoboken, N.J., was approached by a community bank and asked to tweak its mortgage-oriented product to accommodate the deluge of small business loan requests that banks are receiving.
"It took us about four days of working 16 to 18 hours a day to spin this up, and we just finished it Sunday," Lendsmart's founder, A.K. Patel, said Tuesday. "We took the application and made it easy and super cool and gamified it so it was simple to do."
Lendsmart built a relationship with the community bank through the Venture Center's ICBA ThinkTech accelerator. Lendsmart is participating in the 12-week program, which wraps up today.
With the request, Lendsmart's 12 employees modified its product to integrate with the Small Business Administration's loan origination software. "The application process now really feels like a chat function where you're talking to someone through iMessage," Patel said.
Wayne Miller, executive director of the Venture Center, noted the community banking accelerator emphasizes connecting financial technology companies, or fintechs, with community banks to develop digital products and services that meet market needs.
"It was brilliant of them to take the advice of a community bank in our program and tweak their product," Miller said of Lendsmart. "Their agility as a small company really has to be recognized here. And this also demonstrates the power of fintechs to adjust as economic conditions demand."
Lendsmart is selling the product at cost.
"We didn't spin this up to make some money," Patel said. "We were approached about developing a product to help in the current environment. This was a way for us to help small businesses, and we wanted to keep our engineers and our employees working during this time."
The product is expected to launch at one bank today, and Lendsmart is working with other community banks in the Venture Center accelerator to expand the offering.
Business on 04/08/2020