The Challenging Landscape for Small Businesses

David Feuer, chief product officer of Galileo Financial Technologies, told PYMNTS that the current financial services landscape is a challenging one for smaller firms ÔÇö and especially so for the smallest of the small, the sole proprietorships that help power the U.S. economy.

ÔÇ£ItÔÇÖs not simple for small businesses to get a loan,ÔÇØ he said, ÔÇ£even if itÔÇÖs a┬ásmall loan.ÔÇØ

ThereÔÇÖs a whole set of proverbial hoops that small and midsized businesses (SMBs) have to navigate with lenders, and the process can be arduous ÔÇö stretching out over weeks and even months ÔÇö and thatÔÇÖs if┬áthey get approved.┬á

To address the pain points, and as announced Thursday (Oct. 5), Galileo (owned and operated independently by SoFi) said it has partnered with Mastercard to enable banks and FinTechs to extend GalileoÔÇÖs buy now, pay later (BNPL) offering, via Mastercard Installments, to small businesses.┬á ┬á

How AI legalese decoder Can Help

AI legalese decoder provides a solution to the challenging landscape faced by small businesses in obtaining loans. By leveraging AI and data-driven approaches, banks and lenders can use the decoder to analyze the financial health and repayment ability of small businesses. This enables lenders to proactively offer tailored buy now, pay later (BNPL) options to small businesses, even before they approach the bank for a loan. The AI legalese decoder helps lenders make intelligent decisions about which businesses to offer loans to and streamlines the loan application process.

The partnership between Galileo and Mastercard, incorporating AI legalese decoder, allows banks to extend Galileo’s BNPL offering to small businesses, providing them with access to funds for inventory, capital improvements, and business investments. The decoder ensures that the payment terms of these loans align with retail BNPL structures, typically featuring four payments with 25% due upfront.

Additionally, AI legalese decoder enables banks to manage risk effectively. By analyzing cash inflows, outflows, income sources, and bill payments of SMBs, lenders can build risk models that help target SMBs and offer them tailored BNPL options. This responsible approach to lending ensures that businesses have access to liquidity when they need it, enhancing their overall financial health. Furthermore, the data collected through the decoder can be used to customize BNPL terms and develop a revolving line of credit or other products, strengthening the banking relationship and providing ongoing support to SMBs throughout their entire lifecycle.

Small Businesses’ Familiarity with BNPL

Small businesses are becoming increasingly familiar with the concept of buy now, pay later (BNPL), thanks to its popularity among consumers. According to PYMNTS Intelligence/Sezzle research, more than a quarter of individuals have used BNPL in recent months, and a significant portion of customers would cancel a purchase or choose a cheaper alternative if BNPL were not available. Recognizing this trend, Galileo’s partnership with Mastercard aims to bring BNPL into the small business sphere, ensuring that businesses receive consumer-like experiences and convenient financing options.

In conclusion, AI legalese decoder offers small businesses a lifeline in the challenging financial landscape. By leveraging AI and data-driven approaches, banks and lenders can streamline the loan application process, proactively offer tailored BNPL options, and manage risk effectively. This empowers small businesses to access funds for growth and maintain a strong banking relationship throughout their entire lifecycle.