Despite the enormous amount of excess capital available, access to working capital remains the number one business challenge for SMBs. Unlike personal credit, which leverages FICO scores for instant credit evaluations, business credit scores are notoriously unreliable due to a lack of actual trade data. The impact of this lack of business credit is dramatic. It creates a challenging environment for SMBs which spend, on average, 33 hours just to apply for a loan. In addition, approval rates nationally average a paltry 23%. The problem is equally hard for banks and commercial finance companies who lack credit data and must resort to tedious and expensive data gathering and underwriting processes. Considering 60% of all loan requests are for less than $100K and the average cost to underwrite a loan ranges from $4-6K, banks can’t profitably lend less than $250-$500K without personal guarantees.
Why is getting access to business credit so hard? Several reasons. For one, there is no regulatory reporting mandate as there is with financial services firms that service consumers. Also, to save time and money, companies simply do not report when they receive purchase orders, send invoices or receive payments. Considering 85% of the $30T in B2B commerce is conducted on terms (with delayed payments from customers), almost the entirety of B2B trade data is outside of the industry’s credit models.
Accounting system data have been recognized as a way to understand an SMB’s financial situation, but major technical hurdles have prevented their use in credit decisioning. APiO was founded in 2017 to address these technical challenges and create entirely new digital distribution models for financial services.
The APiO team is comprised of data integration specialists, data scientists, mathematicians and finance and legal experts. Leveraging these core strengths, proprietary technology and perspectives, APiO is focused on direct accounting system and ERP integration as a means to let capital flow more freely, efficiently and less expensively. With better access to capital, financial services providers benefit and SMBs become better positioned to grow and succeed like never before.
APiO leverages the powerful and proprietary PremiSync data integration technology. Daffinity Technology Ventures invests cutting-edge technology, expertise and working capital to help portfolio companies reduce risk, improve velocity and increase shareholder value.