Article|Customer Stories

Streamlining and Scaling Lending Businesses

Overview

B2B lending companies provide business owners with fast, simple access to the funding they need to grow. In a nutshell, B2B lending operates like P2P lending, only B2B lenders focus on funding small-to-medium businesses. 

The client came to us to solve the inefficiencies caused by their existing process, which relied on manually dispersing loans by cash and cheque.

By using Nium, our client is now able to move capital faster and at less cost to them. A day is all it takes to get access to a physical card after underwriting, and virtual cards are instant. They’re also able to get their best borrowers to begin using their loans to generate interest faster and in higher amounts. 

With that said, the solution we implemented for this client can work for any business, regardless of industry.

The Challenge

Dispersing loans through cash and cheque is expensive, inefficient and puts lending businesses like our client at risk. In addition to these drawbacks, manually processing transactions also meant that our client had zero visibility into customer spend, making risk scoring and loan recovery a challenge.

Like many lending companies, our client was looking for a way to gain an advantage over traditional banks. In the past, providing a service that larger banks did not was enough to stand out, but that is no longer the case.

Large banks are increasingly aware of the way fintech businesses gain market share and are offering a range of fintech style lending services. Large financial institutions are prime examples of the defensive manoeuvring of large banks.

Our client knew that the best way for fintech lending companies to stand out in today’s market is to double-down on technology. The biggest advantage that fintech lenders have always is their cutting-edge technology.

One of the solutions our client was considering implementing was push payments. Push payments are a hot topic in the industry at the moment, as they present a significant opportunity. Especially for fintech lenders who can quickly adopt the new technology.

In case you’re not familiar, push payments are a recent innovation that allows borrowers to push money directly to lenders, or for lenders to push money directly to borrowers.

By flipping the traditional ‘pull’ method, push payments enable same-day settlements and lower costs too. Compared to push payments, the client’s old system would take up to 7 days for the loan to close and fund. 

After talking with our team at Nium, we suggested that they issue physical and virtual debit cards to their lenders. By doing so, the client could provide lenders with instant payments and reduced fees. As the borrower, they’d also gain greater visibility and control over the funds they lend.

In case you’re not familiar, Visa Card Issuance allows lending businesses to issue virtual and physical debit cards to their lenders. 

At the time of writing this, lending businesses who want to access this technology quickly must work with a Visa Card Issuance partner. Should they choose to integrate the technology themselves, the setup and approval process would take up to 24 months.

Fortunately, Nium is a Visa Card Issuance partner. By working with us, the client was able to shortcut the process and launch their card issuance program within 4 – 6 weeks.

Why They Chose Nium

Nium is one of the few providers who support Visa Direct payment technology. By integrating Nium, the client, and other lending businesses can automate disbursements, as well as provide faster, safer and easier access to capital. 

In addition, Nium would arm them with valuable analytics on customer spend and send patterns, usage and transaction-level details, and help them with risk scoring and loan recovery. 

No longer would they be held back by the limitations of manual processing or disbursing loans by cash, cheque or ACH. They were able to overcome:

  • Poor security against fraud and misuse.
  • Slow payments and high costs.
  • Difficulty of tracking, risk scoring and loan recovery.
  • Lack of transparency and analytics.
  • Inefficient, time-consuming processes.

Overcoming these limitations would save the business time and money, and allow them to scale their business faster.

How Do Lending Businesses Benefit From Nium?

As we mentioned earlier, Nium’s technology provides a range of benefits that have the power to transform any lending business. Here are some examples that benefited the client and can benefit your business:

  • Real-Time Disbursement
    Going digital and implementing push payment technology enables lenders to increase the speed and efficiency of loan disbursements. No more 7-day wait times as were common with cash, cheque and ACH. Lenders can access and use funds instantly.
  • Streamlined Onboarding
    Unlike other providers, Nium is a Visa Issuer which means we can move from onboarding to issuing cards in 4 – 6 weeks, rather than 9 to 12 months. For corporations in a hurry, this is immensely valuable.
  • Enhanced User Experience
    Digital wallets and open-loop cards provide frictionless payment solutions to lending businesses. By digitising, lenders are also able to streamline and automate disbursements.
  • Upgraded Reporting
    Real-time updates allow lending businesses to track and manage expenses as they happen. Lenders also gain the ability to put customer spend insights to work, making risk scoring easier and more accurate.
  • Increased Earnings
    Nium provides lending businesses with the opportunity to monetise their customer base in new ways. Every time a customer spends or borrows, lenders can make money on the transaction.  
  • Advanced Lending Solutions
    Nium’s lending platform provides lenders with more customisation options than any other solution. Design custom lending solutions, lend up to $50,000, restrict expenditure, even target businesses that meet key requirements.

How It Works:

  1. Setup: After integrating Nium, lenders can set up and define their program using limits and controls.
  2. Share: Once the program is complete, lenders can send borrowers a message and a virtual card.
  3. Fund: Lenders then prefund the card with any amount they see fit. 
  4. Spend: Borrowers can spend the funds on approved items until the funds run out.
  5. Track: Each transaction is automatically tracked and logged, providing lenders with greater insight. 

More About Nium

Nium, formerly known as InstaReM, began in 2015 to simplify and optimise the financial processes of corporations. We eventually scaled the offering to serve SMEs and businesses in all industries.

Today, Nium utilises radically innovative technology that makes spending, receiving, and managing funds faster, cheaper, and more transparent. It’s designed to integrate with our customer’s lives and business needs seamlessly. 

We have experts on the ground working with local regulators and financial institutions. With offices worldwide, we are in a position to foster these relationships.

Connect With The Future of Payments

Contact us at enterprise@nium.com to learn how our platform can help lending businesses to improve their customer experience, increase their profitability and scale faster than they ever thought possible.

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