SMALL BUSINESS LENDING IN THE AGE OF COVID: FUNDATION CEO SAM GRAZIANO

SMALL BUSINESS LENDING IN THE AGE OF COVID: FUNDATION CEO SAM GRAZIANO

October 14, 2020

We are posting this episode in the midst of great uncertainty about rescue lending to small businesses impacted by the COVID-19 pandemic. Congress and the White House have not yet agreed on a new round of funds for the SBA Paycheck Protection Program, or PPP, despite widespread agreement on the need for it. Meanwhile, the prior two rounds of the PPP are coming under the microscope, with early investigations suggesting both that fraud rates are high, and that fintech lenders accounted for a disproportionate share of the problem. That finding may bode ill for the sector, given that the PPP emergency was the first time that non-depository lenders were allowed into SBA loan guarantee programs, and also that they performed extremely well in reaching very small businesses — the kinds of ventures that can be a critical pathway into entrepreneurship for women and people of color.

All this makes it an opportune time to be talking with today’s guest:  Sam Graziano, the CEO of Fundation. He and I recorded this conversation several months ago, but his insights seem more timely today than ever.

In this episode, Sam tells us about Fundation’s journey, starting with his own very usual mix of skills and then the company’s launch as a direct line-of-credit lender to small businesses. He describes their epiphany, a few years back, in realizing that the technology platform they built was exactly what banks need in order to automate their own small business lending. Fundation had developed automated risk models that enable banks to say yes to business customers that, under traditional standards, would be rejected. Today, the company has a 50/50 split between direct lending and bank partnerships.

When the pandemic hit, suddenly threatening America’s small businesses with mass extinction, Fundation was positioned for action. Congress passed the emergency PPP to come to the rescue, confronting both the SBA and the banking industry with an unprecedented challenge — the need, literally overnight, to figure how to convert old, slow 20th century technology to meet this 21st century crisis. This meant quickly shifting processes into online and digital channels that could move fast, while still maintaining risk and quality controls.

In our conversation, Sam tells the PPP story from his vantage point in helping banks achieve this metamorphosis. He describes “the gauntlet” of the PPP rollout; the unavoidable uncertainties everyone faced as guidance unfolded; the widespread use of manual processes at the start; the challenges of KYC and fraud; the pattern of banks serving existing customers first; and, as he says, the “toxic” impacts of the first-come, first served sequencing in the first round.

We at AIR had the opportunity to work with Fundation on the PPP TechSprints we held last spring, working on these challenges.

Sam talks about lessons learned, and especially whether this crisis is a catalyst — an accelerant — for trends that were already underway toward transforming small business lending. He also has a vision for how bank small business services should evolve, leveraging open architecture and tech-driven unbundling of services to create really new possibilities that could change the small business lending landscape.

Sam assesses the risks ahead, including the huge dangers of synthetic identity fraud. Overall, though, you’ll be interested to hear the reasons he is optimistic for the future, and where he sees new seeds of change taking root, in places the pandemic has broken.

Meanwhile, I want to alert you to some very exciting news coming up later this week, which I will break on my upcoming podcast with Linda Lacewell, Superintendent of the New York State Department of Financial Services. Please watch for that!

More on Sam

Sam Graziano cofounded Fundation and has served as its Chief Executive Officer since 2011. He is also an advisory board member for the Coalition for Responsible Business Finance, which provides education and information to government, industry and others on how technology can help broaden access to capital to small businesses.

Prior to founding Fundation, Mr. Graziano spent more than a decade in investment banking and private equity, where he developed an expertise in strategic, financial and operational issues for banks, specialty finance companies, asset managers, broker/dealers and other institutions throughout the financial services sector. Previously, he served as Principal with Centerview Partners, where he provided strategic and financial advisory services to some of the nation’s largest and most recognizable financial services companies. Mr. Graziano’s experience includes serving as a Vice President with Keefe, Bruyette & Woods, the nation’s largest boutique investment bank focused on the financial services sector, where he executed dozens of mergers and corporate finance transactions. He cofounded the firm’s private equity practice.


BankThink PPP had its strengths. Its successor can be stronger.

PPP had its strengths. Its successor can be stronger.

For all its administrative and operational burdens, Congress should be commended for creating the Paycheck Protection Program.

In early March, there were many proposals advocating for lending programs with a government backstop. At a time when revenue evaporated for a small-business owners, they did not need a loan; they needed help staying afloat.

The PPP may have been overly prescriptive on allowable use of proceeds, but it offered millions of business owners the lifeline they desperately needed in the form of a forgivable loan, not another fixed obligation. On that front, Congress had the right idea.

The next phase of the PPP appears headed toward a construct that will further limit those that will benefit — a clear signal that the small business bailout is not a bottomless pit. The time is soon approaching when the banking community and nonbank lenders will need to restart the engines of lending to small businesses in earnest.

A large swath of the nonbank lending community has been seriously injured by this unprecedented pandemic, placing the banking community in an even more critical role to meet the liquidity and capital needs of small businesses that have survived.

But the broad-based economic impact of the pandemic has, at minimum, impaired the ability of banks and nonbank lenders to apply legacy underwriting models to the small business market. Without further government support, banks and nonbank lenders will likely require a prolonged period to return gradually to “normal” lending levels.

There is a natural inclination to lean heavily on the Small Business Administration, as was done in the PPP. There is no doubt that the SBA will play a more pronounced role going forward, especially if guarantee rates are increased.

However, the sheer enormity of the future need for capital calls for a broader approach to serve a market that need not continue to rely on upsizing the SBA 7(a) program, nor imposing the administrative burdens of that program on borrowers and lenders. More so, most SBA-sponsored programs are term loan products.

Time and again, however, small businesses indicate that cash flow imbalances are the leading challenge they face. A sensible and impactful program should offer small businesses with revolving lines of credit to support it through a long-term recovery.

Fortunately, over the last several years, the banking system has been modernizing its credit delivery platforms for conventional credit products. As a result of innovation in the small-business lending space, the lending infrastructure is now in place for small businesses to easily access conventional credit products through bank websites, branches, bankers, and online and mobile banking portals.

This is generally not true (at the same scale) of SBA and other non-conventional products. The systems, technology, processes and capital are available through bank and nonbank lenders to have an immediate and enormous impact on providing liquidity and capital to the small business market. This goes over and above the PPP, simply by leveraging the conventional credit programs that already exist.

Banks and nonbanks need a risk-sharing arrangement in place with the U.S. government that aligns economic interests of all involved.

Over the last few months, there has been a push for a framework program that would do just that with key policymakers in Washington, targeted at Main Street small businesses. Despite its name, the Main Street Lending Facility has a minimum loan size of $250,000.

According to the Federal Reserve’s latest survey on small business finances, 81% of small businesses hold debt of $250,000 or less, and 68% have debt of $100,000 or less. This program is not tailored to small businesses.

The other proposed framework is simple. Use conventional bank lending programs, cap loans and lines at $250,000, and target businesses owned by individuals (not by other companies).

Banks would pay a monthly guarantee fee to the Federal Reserve based on the outstanding balance of credit lines and loans in exchange for a limited guarantee. Banks could offer committed lines of credit that are renewed each year with notice to the customer and a guarantee level that declines over time, eventually to zero.

Small businesses get great products that are easy to access immediately, banks get downside protection, and taxpayers get alignment of interests with the private market through motivating banks to make prudent lending decisions.

While the next stimulus bill will likely extend PPP, more can be done to support the small-business community. Fortunately, the pieces are in place to provide capital to this vital segment of the economy immediately, and at scale, through a program that aligns the economic interests of all stakeholders involved.

 


Visa boasts of fintech Fast Track success

Source: Visa

Fintechs are a central part of the global payments ecosystem, and amidst COVID-19 have launched further into the spotlight, reporting sizable upticks in the usage of their apps1, as more people manage their money from their personal devices.

Visa (NYSE: V), today, is proud to announce its continued support of the global Fintech community, having grown the Fast Track program to over 140 Fintechs2. Since expanding globally in mid-2019, the Fast Track program has grown 280%3, highlighting the surge in demand for digital payments worldwide.

Fast Track allows both new and established businesses to leverage the speed, security, reliability and scale of the Visa network to get up and running quickly, taking the process from months to weeks. The program provides turnkey access to Visa’s ecosystem partners, online licensing, APIs, as well as extensive go-to-market toolkits, online education and expert advice to help Fintechs scale their business. With new members from Africa, Asia Pacific, Europe, Latin America, the Middle East and North America, these Fintechs are transforming how consumers and businesses manage money, invest, receive loans and send payments worldwide.

“Our goal is to bring cutting-edge Fintechs into the Visa ecosystem, to help them grow and scale their business in record time,” said Terry Angelos, senior vice president and global head of Fintech, Visa. “Through programs like Fast Track, Visa is committed to helping Fintechs, many of which are small businesses, advance their potential and get into market quickly, so they are ready to provide innovations that move the world forward everyday – especially in current times.”

Fast Track Fintechs Focus on Recovery
Visa partners including Airwallex, Fundation and Rappi have used their ongoing focus on innovation and growth to be nimble in their reactions to COVID-19. Australia-founded Airwallex has extended support to Australia and UK-based small businesses in need by offering to waive their international transactions fees and U.S.-based Fundation is helping small businesses quickly get the capital they need during these times. Rappi out of Colombia has begun piloting food delivery by robots, working to minimize the spread of the virus. In these videos, Airwallex and Rappi both talk about their experiences in working with Visa.

“During these challenging times, it’s more important than ever that we are able to support small businesses by getting them the funds they need as quickly as possible to stay afloat,” said Sam Graziano, chief executive officer, Fundation. “Through our partnership with Visa, we will continue to innovate and develop strategies to aid in the relief and recovery of our customers’ businesses.”

Visa Welcomes a New Class of Innovators
The newest members of the Fast Track program span a diverse range of companies, including female-founded Fintechs, digital currency wallets, consumer-centric and business-to-business (B2B) solutions providers. Highlights include:
• New Enablement Partners: Fast Track is made possible due to collaboration with enablement partners who are the critical technology companies that lay the foundation for Fintechs to build their products. Announced today, three new program manager enablement partners – Cascade FinTech, Deserve and PEX – are becoming part of Fast Track in the U.S., joining a class of leading companies like Galileo, Marqeta and Stripe, bringing the total number of enablement partners to more than 20 globally.

• Female Founders: Visa is committed to the advancement of women’s economic growth. Visa’s investment in women-owned businesses is further emphasized by the inclusion of global female-founded Fintechs, Australia-founded Airwallex, and North America-based gogo Getter and Kikoff.

• Digital Currency Wallets: Digital currency enabled wallets have grown exponentially, with over 139 million user accounts in existence today4. In support of this burgeoning market, digital currency-focused Fast Track companies including Fold, Genesis Block and TrustToken are connecting their consumers to Visa’s 61 million merchant locations worldwide.

• Consumer Finance Management: Across platforms, Visa aims to make the everyday management of money easier for consumers. Fast Track companies including Europe-based Lydia and Swile, Paga in Africa, SoLo Funds in the U.S., and United Arab Emirates-based Wally are among those simplifying money management and driving Fintech app adoption in their communities.

• Small Business Support: Visa continues to transform the B2B payments space for the digital age. UK-based digital lender Capital on Tap, which provides credit cards and loans to over 60,000 SMBs, and U.S.-based Fundation, which provides an application processing platform for banks and small business lenders, are part of the program. Konfio, a Mexico-based startup that uses a data-first approach to enable fast credit assessment for SMBs, and Neat, a Hong Kong Fintech startup enabling SMEs to grow their business globally, are also standout members creating new B2B innovations from across the globe.

“Right now, it’s more important than ever to help small businesses navigate through unknown financial challenges,” said David Arana, chief executive officer, Konfio. “By working with Visa and through the Fast Track program, we have been able to offer small businesses access to financial services that they’re often not given, and provide options to SMEs who need credit lines to pay for necessities, which is especially important in today’s environment. We have also developed tools and market research to complement our financial services.”

“After recently joining Visa’s Fast Track program, we were able to quickly put our co-branded debit card into market in the United States,” said Will Reeves, chief executive officer, Fold. “By working with Visa, we are delivering on our mission to provide an easy way for shoppers to earn rewards in bitcoin for their everyday spending, and help our business continue to scale with the backing of Visa’s vast network and resources.”


Lend Academy Podcast : Sam Graziano of Fundation

The CEO and co-founder of Fundation talks small business lending, bank partnerships, big tech, verticalization and what's next

While there are several online lending platforms that have reached scale in the small business space, banks still do the vast majority of small business loans. But many banks don’t have the capability to provide a modern, digital and user friendly experience. The good news is that banks now recognize this and are more open to partnering with fintech companies than ever before.

Our next guest on the Lend Academy Podcast is Sam Graziano, the CEO and co-founder of Fundation. His company is increasingly partnering with large banks to help digitize and streamline their small business lending operation (their latest bank partner was announced just this week).

In this podcast you will learn:

  • The Fundation origin story.
  • Why he quickly realized that they needed to be focused on institutional capital.
  • The two pivots they have made since starting the business.
  •  The type of channel partners they work with for referrals.
  • How they built their platform for different kinds of partners.
  • The typical terms of their small business loans and lines of credit.
  • How their white label small business lending products work for banks.
  • The type of banks they are focused on with that product.
  • Why it is easier to talk with banks today than it was a few years ago.
  • How incumbent banks are becoming more like fintechs.
  • Sam’s thoughts on big tech entering the small business lending space.
  • Why we are seeing a verticalization in small business software.
  • The paradigm shirt he sees in the future for banks.
  • What’s on the horizon for Fundation next year.


Fundation Deploys Private Labeled Loan Origination Platform for Fifth Third Bank

Fundation Deploys Private Labeled Loan Origination Platform for Fifth Third Bank

Collaboration to include streamlining the delivery of Fifth Third credit products and providing Fundation products as an alternative option for qualifying customers

NEW YORK–(BUSINESS WIRE)–Fundation today announced that it has collaborated with Fifth Third Bank to modernize Fifth Third Bank’s loan origination capabilities for small business loans and lines of credit. The new capability enables small businesses to apply for loans and lines of credit through a simple, digital application. The solution will initially be available through Fifth Third banking centers in select markets and ultimately be deployed at 53.com. In most cases, approvals will be provided within minutes and funding available to customers within a couple of business days through a completely digital process. Additionally, Fundation will offer Fundation branded products to customers that do not meet Fifth Third’s eligibility guidelines, helping the bank to serve more of its small business customers’ credit needs.

“At Fundation, our mission is to enable our banking clients to give their small business customers the best of both worlds – great products at great prices along with the modernized experience they expect in the digital era”

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“At Fundation, our mission is to enable our banking clients to give their small business customers the best of both worlds – great products at great prices along with the modernized experience they expect in the digital era,” said Sam Graziano, CEO of Fundation. “This collaboration does exactly that. The combination of Fifth Third Bank’s renowned brand, customer reach and great products with our digital lending platform will allow us to collectively serve the Bank’s customers with best-in-class products and a best-in-class customer experience.”

With this latest solution, and in addition to those already deployed with Regions Bank, Citizens Bank and Bank of the West, Fundation now collaborates with 4 of the top 20 commercial banks in the United States in their small business lending programs.

About Fundation

Fundation Group LLC is an origination solutions provider focused on the small business market nationally. Fundation is a leader in providing technology and application processing services to support more than 25 super regional, regional and community banks. Fundation’s solutions enable its financial services clients to develop a digital banking capability, provide a great customer experience, drive cost efficiency into their small business lending program, and maximize the number of customers they can serve. Fundation’s services range from simple referral partnerships to customized, integrated private-labeled lending programs. The Company also partners with a wide array of organizations that serve the small business market in various capacities to deliver credit products to the business community nationwide. For more information, please visit www.fundation.com.


New York City Credit Program Aims to Help Female Entrepreneurs

New York City Credit Program Aims to Help Female Entrepreneurs

Credit lines of up to $100,000 offered to women-owned businesses

By Kate King | Photographs by Kevin Hagen for The Wall Street Journal

Nov. 13, 2019 9:00 am ET

Female entrepreneurs are more likely than their male counterparts to see their loan applications rejected or underfunded, and New York City is launching a program to close the gap.

The Department of Small Business Services’ $5 million program will offer lines of credit up to $100,000 at about 12% interest to women-owned businesses, said Gregg Bishop, commissioner of the department. Entrepreneurs with credit scores of at least 620 who have been in business a year or longer and earn $50,000 or more in annual revenue can apply.

The department surveyed more than 1,600 entrepreneurs in New York City for a 2015 report that found women are more hesitant than men to take out high-interest loans.

“Women tend to be more risk averse,” Mr. Bishop said in an interview. “But when you ask women and male entrepreneurs where they want to be in five years, they have the same goals.”

What has been your experience in securing funding to open a small business? How do you see this program improving the growth of women entrepreneurs? Join the conversation below.

Lines of credit are particularly helpful for women entrepreneurs who only want to borrow and pay interest when they need funding, as opposed to applying for large loans, said Nancy Carin, executive director at the Business Outreach Center Network, a nonprofit small-business development organization. Lines of credit also provide fast access to cash, particularly helpful for businesses like bakeries that might need quick capital during busy holidays.

“Once you’re approved for a line of credit, you can use it strategically, and that positions a woman entrepreneur to respond to market conditions and opportunities,” said Ms. Carin, whose organization works with Small Business Services on loan and other funding programs for women entrepreneurs.

The program’s 12% interest is a reasonable rate for borrowers with a credit score of 620, Ms. Carin said.

The program is a public-private venture, with Goldman Sachs 10,000 Small Businesses contributing $5 million and Fundation, an online lender, contributing $500,000 in capital to support the lines of credit. A $1 million loan-loss reserve is being funded by Squarespace and the New York City Economic Development Corporation. The Goldman Sachs Foundation also is providing $300,000 for outreach to underserved women.

The Department of Small Business Services did a soft launch about a month ago and has received 13 applications.

Cathy LaCognata applied and was approved for a $75,000 line of credit. She had struggled for years to find affordable loans, turning instead to friends and  family when she needed money for her business, a boutique gym based in Brooklyn.

Ms. LaCognata, 51 years old, has experienced several setbacks since becoming an entrepreneur in 2011 after years as a stay-at-home mom. The building that housed her first location in the Rockaways was swamped by superstorm Sandy. Then she separated from her husband, and her credit score suffered as bills went unpaid.

“Getting funding is always a problem,” Ms. LaCognata said. “Not having a great credit score, no one was going to lend me money.”

Ms. LaCognata improved her credit score to 730 from 530 after getting guidance from the Goldman Sachs 10,000 Small Businesses program, which she completed earlier this year. She said she plans to use her new line of credit to renovate and buy equipment for her gym, Training for Warriors Brooklyn.

“It’s a lot of work, being in this business and being good at it,” she said. “But it’s so rewarding.”

Write to Kate King at Kate.King@wsj.com

Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved.


Women.nyc: City Launches New Program with Goldman Sachs 10,000 Small Businesses, Fundation & Squarespace to Create New Affordable Lines of Credit for Women Entrepreneurs

NEW YORK––The de Blasio Administration today launched a new program designed to help women entrepreneurs access affordable lines of credit to start, grow and sustain their businesses. The new program, called WE Credit, will provide up to 250 women entrepreneurs with lines of credit averaging $50,000 at below-market interest rates.

WE Credit is made possible through a public-private partnership between the City, Goldman Sachs, Squarespace and Fundation. Goldman Sachs 10,000 Small Businesses will provide $5 million to finance lines of credit to women entrepreneurs. This investment is accompanied by a $1 million loan loss reserve fund provided by Squarespace and the New York City Economic Development Corporation, which will cover potential defaults. Fundation, a credit solutions provider, will provide the platform through which women entrepreneurs can access and manage the lines of credit.

“To truly become the fairest big city in America, we need to give everyone an opportunity to participate in our economy – regardless of your gender, race or ethnicity,” said Mayor Bill de Blasio. “That means breaking down barriers and providing the resources people need to establish, grow and sustain their businesses. With WE Credit, we’re breaking down barriers to capital and ensuring women entrepreneurs aren’t left out of the economic opportunity this city has to offer.”

“Easy access to an affordable line of credit can be the difference between a business thriving or folding. With WE Credit, we are leveling the playing field for women entrepreneurs who historically lack the same support as men to grow their businesses,” said Former Deputy Mayor Alicia Glen. “Through our partnership with Goldman Sachs 10,000 Small Businesses, Squarespace and Fundation, we’re building out our portfolio of financial products designed to address the needs of New York City’s women entrepreneurs.”

“In order to fulfill a vision of economic democracy for all, we have to make a priority to focus on the financial access and capabilities of segments of the population that are underrepresented in important sectors of our economy,” said Deputy Mayor for Strategic Policy Initiatives Phillip Thompson. “Programs like WE Credit that have a particular focus on economic inclusion can significantly boost business creation and expansion for our city’s neediest women entrepreneurs and aspiring entrepreneurs. I commend former Deputy Mayor Glen for her tremendous vision in creating this and other programs that have given women across the city a more equal chance to participate and succeed in our economy and I look forward to working with Commissioner Bishop in their implementation.”

“For far too long, women of all backgrounds have notoriously struggled with access to affordable lines of credit” said women.nyc Executive Director Faye Penn. “We are proud to be sparking change in the greatest city in the world through the introduction of WE Credit. Thank you to all of our funding partners for backing such an important program that will uplift female entrepreneurs and give them the resources they need.”

“When building their businesses, women entrepreneurs can face a multitude of barriers that prevent them from accessing capital, forcing them to jeopardize their personal credit or be subjected to predatory lenders,” said Gregg Bishop, Commissioner of the NYC Department of Small Business Services. “WE Credit provides valuable support to women entrepreneurs across the five boroughs by helping them access affordable lines of credit.”

“The launch of WE Credit is integral to our City’s vision to ensure a more equitable marketplace,” said Jonnel Doris, Senior Advisor and Director of the Mayor’s Office of M/WBEs. “An entrepreneur may have the vision and see the opportunity to grow their business, but fundamentally, we know there are barriers, as it all comes down to access to affordable credit. With this program in place, more women entrepreneurs will have the capacity to stay competitive and create more jobs.”

“Despite small businesses serving as a hub for community vitality, economic growth, and quality job creation in neighborhoods across New York, many women entrepreneurs still have difficulty accessing the funding they need to grow their businesses,” said Margaret Anadu, Managing Director and Head of the Goldman Sachs Urban Investment Group. “Through this partnership, we are proud to expand the Goldman Sachs 10,000 Small Businesses commitment to ensure local women entrepreneurs have access to the capital they need so that they, and our communities, can succeed. We are excited to play our part in addressing this long-standing challenge.”

According to the City’s Unlocking the Power of Women Entrepreneurs in New York City report, 70 percent of women entrepreneurs cite access to capital as a major challenge when starting and growing their companies. Many entrepreneurs rely on personal credit cards and payday lenders, which lend at interest rates that are more than 30 percent. With the launch of WE Credit, the City and its partners will help women entrepreneurs improve their credit scores and avoid high-interest rates, including those entrepreneurs with limited credit history. Lines of credit will be provided at an Annual Percentage Rate of up to 12 percent, which will be subject to material changes in the market. In addition to providing credit support through the loan loss reserve, the City will help women entrepreneurs through the loan application process.

“Entrepreneurs represent the hustle and grind of New York City and are the backbone of not only Squarespace’s business, but our local communities,” said Anna Stallings, Senior Marketing Manager at Squarespace. “We’re proud to participate in a program that will provide woman-identifying small business owners, a historically under-supported community, with access to the capital they need to succeed.”

“The city should be commended for orchestrating a program that will support an under-served segment of the small business community,” said Sam Graziano, CEO of Fundation. “Federal reserve studies consistently show that the vast majority of small businesses are seeking less than $100,000 of credit. This program may serve as a model that can address that segment of the market at scale.”

WE Credit is the fourth WE Fund product under the WE NYC umbrella – others include the recently-launched WE Venture consortium, WE Fund Crowd and WE Fund Growth. WE Venture alone will invest $30 million in women and minority founded tech startups over the next five years. WE Fund Growth has lent over $800,000 to 45 borrowers. WE Fund Crowd has provided more than $1 million in zero-interest loans to women entrepreneurs in partnership with the global crowdfunding platform Kiva.

Through WE Credit, women small business owners with limited experience and credit history will be connected to flexible funding to help them build their businesses. Eligible applicants must have been in business for a minimum of one year and have at least $50,000 in annual revenue.

Council Member Helen Rosenthal said, “As chair of the City Council’s Committee on Women, I am delighted at the news that WE Credit will begin to offer lines of credit to women entrepreneurs, including those with limited credit history. Through the innovative WE NYC partnership, women across our city have a growing number of tools to turn their dreams into reality and contribute to our local economy. I want to thank NYC Small Business Services and the Mayor’s Office for all their efforts to advance women’s financial and social empowerment.”

“WE NYC is a vital program and has helped many women entrepreneurs get information and mentorship to start and grow their businesses,” said Council Member Inez D. Barron. “I am happy to see the launching of WE Credit. It will be a tremendous factor in the success of women in business throughout the city who need affordable lines of credit. The NYC Small Business Services’ leadership and vision in developing pathways to build small businesses makes New York City stronger. We look forward to further expanding opportunities such as this.”

Interested women entrepreneurs can visit we.nyc to learn more. Applications for the program will open this spring.

About WE NYC
WE NYC, launched by the NYC Department of Small Business Services in 2015, delivers tailored, research-based programs for women entrepreneurs to better connect them to the resources, education, and community they need to flourish. WE NYC services are free and open to all women throughout the five boroughs. Since its launch, WE NYC has served over 6,000 women entrepreneurs in NYC. For more information, visit we.nyc.

About women.nyc
When women succeed, the Greatest City in the World becomes even greater. women.nyc is a groundbreaking initiative that not only inspires women to advance their careers, but also provides them with the real tools they need for success. From free, expert legal advice, to networking and mentorship, to financial assistance, women.nyc offers a growing portfolio of resources for working women. Join women across the five boroughs, and make your #NYCPowerMove with the help and support of women.nyc.

About the Department of Small Business Services
SBS helps unlock economic potential and create economic security for all New Yorkers by connecting New Yorkers to good jobs, creating stronger businesses, and building vibrant neighborhoods across the five boroughs. For more information on all SBS services, go to nyc.gov/sbs, call 311, and follow us on FacebookTwitter, and Instagram.

About Goldman Sachs 10,000 Small Businesses
Goldman Sachs 10,000 Small Businesses is an investment to help entrepreneurs create jobs and economic opportunity by providing greater access to education, capital and business support services. To date, 10,000 Small Businesses has served over 8,200 small businesses across the United States. The program has reached businesses from all 50 states, Puerto Rico, and Washington, D.C, and has resulted in immediate and sustained business growth for the alumni of the program. For more, visit https://10ksbapply.com/.

About Squarespace
Squarespace empowers millions of dreamers, makers, and doers by providing them with the tools they need to bring their creative ideas to life. On Squarespace’s dynamic all-in-one platform, customers can claim a domain, build a website, sell online, and market a brand. Our suite of products combines cutting-edge design and world-class engineering, making it easier than ever to establish and own your online presence. Founded in 2003, Squarespace’s team of nearly 900 is headquartered in downtown NYC, with offices in Dublin and Portland. For more information, visit www.squarespace.com.

About Fundation
Fundation Group LLC is a credit solutions provider focused on the small business market nationally. Fundation is a leader in providing technology and application processing services to support more than 25 super regional, regional and community banks. Fundation’s solutions enable its financial services clients to develop a digital lending capability, provide a great customer experience, drive cost efficiency into their small business lending program, and maximize the number of customers they can serve. Fundation’s services range from simple referral partnerships to customized, integrated private labeled lending programs. The Company also partners with a wide array of organizations that serve the small business market in various capacities to deliver credit products to the business community nationwide. For more information, please visit www.fundation.com.

pressoffice@cityhall.nyc.gov(212) 788-2958

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Import/Export SMBs Introduced to Fintech Lending Options

Early this week TangoTrade announced its partnership with the online lender Fundation. TangoTrade, which deals primarily in payment assurances for US small business importers and exporters, will now offer alternative financing to SMBs with the help of Fundation.

The development is a reaction to the struggles faced by small businesses who engage in global trade. Sam Hayes, Co-founder and President of TangoTrade, said that “If you’re an SMB and a transaction goes south, it causes major problems for cash flow. There’s very little recourse you can have as a small business.”

Explaining that about one-third of all US imports and exports originate from small businesses (roughly 200,000 small businesses import and 300,000 export), Hayes notes that this is a large portion of the American economy that is potentially at risk. Especially when they are being left out to hang by banks whose debit and credit facilities come attached with lengthy approval wait times and complex application processes that are often too inconvenient for SMB owners.

The partnership with Fundation, which is backed by both Goldman-Sachs and SunTrust Bank, will enable TangoTrade to fund SMBs up to $1 million. As mentioned, TangoTrade also offers payment assurance for importers and exporters, which reduces payment risks by managing the entire payment process for both parties involved and offering imbursement via 130 currencies. As well as this, the option to wire funds globally is available through TangoTrade’s partnership with TempusFX.

These services have been centralized by TangoTrade, being made accessible through the business’s site, a decision that is key to the company’s vision of offering services through a platform, Hayes told deBanked. “We’ve seen innovations in cross-border payments and global sourcing, but not a whole lot in this particular area,” which is why TangoTrade is pushing to incorporate fintech in their dealings.

And this impetus has attracted attention. With a diverse set of investors ranging from Hard Yaka, which has ties to Square, Ripple, and Twitter; to Village Global, a venture capital network that is backed by Bill Gates, Jeff Bezos, and Mark Zuckerberg, TangoTrade has links to large names. Such diverse connections are mirrored in the company itself, with their team bringing together experience from MasterCard, Payoneer, NASDAQ, and Oracle.

A cabal of tech heads to be sure, Fundation CEO Sam Graziano says that this approach will “enable small businesses to access low-cost capital through an integrated user-friendly digital experience on their platform.”


TangoTrade and Fundation Provide Trade Credit Alternatives Up To $1 Million For U.S. Small Businesses To Purchase Goods From Overseas

SAN MATEO, Calif. and RESTON, Va., July 30, 2019 (GLOBE NEWSWIRE) — TangoTrade, a B2B financial software provider that empowers small and medium sized businesses (SMBs) to import and export globally, announced today that the recently launched TangoTrade Payment Assurance™ solution, is now integrated with award-winning commercial credit solutions provider Fundation to empower SMBs to finance transactions through an integrated experience. With this important integration, SMB importers and exporters have access for the first time to a combination of payment security, market-leading foreign exchange (FX) rates for over 130 currencies, and now import financing of up to $1 million.  SMBs can now take advantage of expanded global trade opportunities with TangoTrade’s Payment Assurance.

International trade is fraught with risk, particularly for SMB importers and exporters that have limited access to capital.  Traditionally, large companies have mitigated these risks by relying on a “letter of credit” instrument offered by major banks. This mechanism provides a payment guarantee to the exporter upon proof of shipment.  However, the existing letter of credit solutions are poorly suited for SMBs due to its high cost, low approval rates, and complex, time-consuming process. Furthermore, many banks that cater to small business do not offer a letter of credit service.

Now with TangoTrade’s Payment Assurance, SMBs can reduce payment risk without relying on letters of credit or limiting themselves to certain proprietary B2B trading platforms. Plus, the integrated financing capability enables U.S.-based importers to access financing when they need it as part of a cross-border transaction.

Payment Assurance provides a simple online interface for importers and exporters to manage the entire trade payment process, including access to import financing of up to $1 million through Fundation. To ensure security for both parties, full payment is held in a dedicated holding account.  Once shipment has been validated by TangoTrade, payment is automatically transferred to the exporter, who has the option to receive payment in more than 130 currencies.

TangoTrade Payment Assurance integrated with Fundation PayOverTime™ is available through platform partners, such as cross-border payment providers, freight forwarders and other B2B aggregators. Currently, the joint solution is available through TempusFX. For more information visit: https://tangotrade.com/integration/

“With Payment Assurance, SMB importers can now access financing of up to $1 million in order to close significant commercial transactions with less risk,” said Sam Hayes, president of TangoTrade. “By partnering with Fundation, an innovative and proven credit solutions provider, TangoTrade is bringing important tools to SMBs in their quest to grow and thrive.”

Fundation is one of the nation’s leading digitally-enabled small business lenders and credit solutions providers that offers conventional term loans and lines of credit for small businesses through its banking and other strategic partnerships.

Sam Graziano, CEO of Fundation, added, “The digitization of commerce is happening everywhere and frictionless access to capital will continue to catalyze that trend.  Our platform was designed for leading service providers like TangoTrade to enable small businesses to access low-cost capital through an integrated user-friendly digital experience on their platforms. We look forward to working with TangoTrade to bring real change to the importing process for business across the U.S.”

Jingming Li, a TangoTrade advisor, CEO of Trova Technologies and former Founding President of Alipay US (Alibaba Group), also noted: “Small businesses have an opportunity to outcompete larger players globally. TangoTrade provides an innovative platform with the necessary resources including Payment Assurance and now financing once only available to larger enterprises.”

About TangoTrade
TangoTrade’s financial software empowers small and medium-sized businesses (SMBs) to import and export with lower risks, costs, and complexity to expand global business.  Offered through origination partners such as B2B trading platforms and freight forwarders, the TangoTrade Payment Assurance™ platform combines financing, transaction management, shipment verification and cross-border FX and payments to reinvent the outdated letter of credit.  TangoTrade offers efficient, cost-effective trade solutions that expand global business opportunities for SMBs.  Founded by industry veterans, TangoTrade is backed by leading investors including Village Global, Fenway Summer and Hard Yaka. For more, visit www.tangotrade.com

About Fundation
Fundation Group LLC is a credit solutions provider focused on the small business market nationally. Fundation is a leader in providing technology and application processing services to support more than 25 super regional, regional and community banks. Fundation’s solutions enable its financial services clients to develop a digital lending capability, provide a great customer experience, drive cost efficiency into their small business lending program, and maximize the number of customers they can serve. Fundation’s services range from simple referral partnerships to customized, integrated private labeled lending programs. The Company also partners with a wide array of organizations that serve the small business market in various capacities to deliver credit products to the business community nationwide. For more information, please visit www.fundation.com.

For Press Inquiries:
TangoTrade
Merrill Freund
tangotrade@bocacommunications.com
(415) 577-8637

Fundation
Barry Feierstein
Barry.Feierstein@fundation.com
(571) 418-6387


Fundation Pulls Community Bank Into FinTech Collaboration

Fundation Pulls Community Bank Into FinTech Collaboration

Large financial institutions (FIs) are increasingly turning to FinTech firms and alternative lenders to augment their small business (SMB) offerings, but community banks are beginning to get on board with the partnership strategy, too.

The latest to do so is Provident Financial, a New Jersey-based bank providing consumer and business banking services in New Jersey and Pennsylvania. Reports in American Banker on Tuesday (July 2) said the bank is collaborating with alternative small business lending company Fundation to strengthen its SMB lending position.

“We wanted to offer something for our customers that was convenient,” said Provident Executive Vice President and Director of Retail Banking Josephine Moran, adding that the bank aims “to offer options to customers” by integrating Fundation into its small business finance solutions.

According to the publication, the partnership is not only noteworthy for the FI’s work with a FinTech. Their collaboration will see Provident, described by American Banker as an institution “known for its conservatism,” offer unsecured loans. Small businesses can apply within bank branches and online for loans of up to $250,000, reports said.

Mark Fitzgibbon, principal and director of research at Sandler O’Neill, told the publication that Provident is known as “the turtle bank,” for being a slow-and-steady financial services provider that can produce “good results in good environments and bad environments.”

“They’re very disciplined on credit and interest rate risk,” he said.

The bank’s work with Fundation will expand its small business lending operations, but limit its own exposure to small business lending risk because the loans will be largely held by Fundation.

Reports said the majority of Provident’s loan book is made up of commercial mortgages and multifamily credits. Working with an alternative lender will enable the bank to diversify its offering, and strengthen its position with small businesses without amplifying risk exposure. The publication pointed to other financial service providers like Nav that may be able to repeat this strategy.