Over the past two years, six million small businesses in the U.S. borrowed more than $1.9 trillion. And before the pandemic, they expected to borrow nearly $2.6 trillion over the next two years. With the first round of Paycheck Protection Program funding, however, these small businesses have already borrowed 13% of what they had planned to borrow through 2022.
It’s no surprise, then, that fintechs are stepping up to address the need for faster, digitized lending technology. Toronto-based fintech Boss Insights, for one, is helping banks handle unprecedented demand through their automated, end-to-end platform tailored specifically to CARES Act/PPP applications.
CEO and co-founder Keren Moynihan has been leading Boss Insights’ response to the immediate and long-term challenges facing financial institutions in the U.S. and Canada in light of the COVID-19 pandemic.
First off: how are you doing, personally, during this time?
COVID-19 wasn’t something anyone was expecting, but now that it is a reality, we’re all learning to adapt. I’m a co-founder, boss, and mother. I’m feeling overwhelmed and grateful each day as I make sure that the people I’m responsible for are taken care of.
We started Boss Insights to empower lenders and address the need-gap businesses face when trying to get approved for loans. The need for loans has never been greater. What pushes us everyday is our passion for empowering lenders to fund businesses.
During this time, we reflected on how to serve the financial services industry. We did this by listening to what lenders and businesses were facing and then directed Boss Insights’ platform to fill this need. My passion behind bringing Boss CARES/PPP to life keeps me motivated throughout the 18-hour work days. If we do our job properly, we can support the economic engine of the future: businesses and the people who run them.
“THESE NUMBERS ARE UNPRECEDENTED: 14 YEARS’ WORTH OF LOANS PROCESSED IN 14 DAYS . . . THE SURGE OF LOAN REQUESTS ILLUSTRATES AN UNDENIABLE NEED FOR DIGITAL SOLUTIONS TO QUALIFY APPLICATIONS, GATHER BORROWER INFORMATION FOR DECISIONING, AND MONITOR THE PROCESS ON AN ONGOING BASIS.'“
Now, professionally: in your opinion, how has this environment affected the lending industry? How about Boss Insights in particular?
On March 27, the U.S. CARES Act was enacted. On April 3, $349 billion in government-backed paycheck protection payment loans was approved, and 1.6 million borrowers were funded.
These numbers are unprecedented: 14 years’ worth of loans processed in 14 days.
On April 27, another $310 billion was put into the market.
The surge of loan requests illustrates an undeniable need for digital solutions to qualify applications, gather borrower information for decisioning, and monitor the process on an ongoing basis.
In light of this, Boss Insights reacted quickly to COVID-19. First we ensured that our business and employees would be in a safe work environment and have a secure position. Then we stopped talking and started listening.
We saw early on that there’d be a surge in loan requests — even before PPP was announced — and offered free technology to help. Forbes was kind enough to highlight our offering amongst other fintechs who were offering their support.
The next part happened as a result of the extraordinary accelerators we work with, including MassChallenge FinTech, INV FinTech, and DCU FinTech. Each reached out to offer support and access to the market. It’s through this support that we now collaborate with Oracle. As a result, our ability to support lenders as they fund business borrowers has grown exponentially.
Right now,what are the biggest challenges you're seeing banks grapple with as it relates to the impact of COVID-19?
We see four main challenges:
Volume: 14 years of applications in 14 days will test any system in place.
Manual work: Few banks have SBA E-Tran integration. Many providers have provided applications portals; however, they do not automatically score the borrower and provide a response to them. Most don’t have a solution for the forgiveness calculation that gives borrowers a right to eight weeks of the loan as a grant and opens the bank to exposure.
Changing legislation: The CARES Act was passed in weeks and is being changed; any process has to allow for that agility.
Challenges onboarding fintech solutions: Banks are accustomed to adopting fintech solutions slowly, and vendor processes do not allow for tools to be incorporated in the market time required.
How does your solution work?
Boss CARES/PPP is an end-to-end platform that includes application automation, decisioning, and forgiveness calculations. It allows borrowers to apply for the PPP and get instant personalized pre-approvals from the borrowers. Lenders have an automatically scored application without any manual effort.
It then gives borrowers and lenders access to a portal to see their eligibility and forgiveness calculation. The PPP is unique in that it allows for a portion of the loan to be forgiven. Boss CARES is a huge step up from the manual forms and processes that are in place today.
How did this partnership with Oracle come about? It seems you have moved quickly. Can you speak to the process?
In a word: collaboration. It’s by getting podcasts willing to cover us (M4 Edge, 20 Leaders in 20 Days) and having accelerators like DCU Fintech Innovation Center, INV Fintech, and MassChallenge FinTech work with us that we were in the right position to work with a large player like Oracle. Oracle then showed an enormous degree of agility and trust by deciding to work with us and vetting us in record time.
Thinking about long-term impact, how do you think COVID-19 will shape the future of financial services, especially as it relates to fintech?
Since 2017, Boss Insights has been promoting digitization and data to support lenders and close the $5 trillion lending gap. With COVID-19, there is an irrefutable need to go digital. Fintechs no longer have to state their case — however, they need to pitch the right solutions to financial institutions. Accelerators can also play a great role at accelerating and streamlining the procurement process between banks and fintechs.