Ex-Visa Exec Leads SMB Contextual Lending Charge For Fundbox

Well-publicized government aid aside, small- to medium-sized businesses (SMBs) — both on the supply and retail sides — still struggle with cash flow.

PYMNTS research shows that 30 percent of all of what it calls “Main Street Survivor” business owners report having used their own money to support their businesses since the pandemic began. This practice has grown less common in the past three months, however, with 25 percent of owners reporting doing so in that time frame.

It’s a situation that has demanded new approaches to accessing financing and credit during a difficult time. Several financial institutions (FIs) and FinTechs have made efforts to fill the gaps. One of those efforts has come from digital lending platform Fundbox, whose business model is based on taking the arduous and time-consuming process of accessing SMB financing and reinventing it for the digital-first banking economy.

With SMBs facing an existential crisis in many ways, Fundbox has now made a key hire that portends the future of the company’s approach to extending lines of credit and short-term loans. New Chief Operating Officer Cetin Duransoy comes to Fundbox from Visa, where he was the company’s global head of Installment Products and oversaw the creation and development of the company’s installment payment ecosystem.

Prior to joining Visa, Duransoy spent 15 years at Capital One, where he held various leadership roles both in the credit card division and retail bank, including the small business lending and deposits teams.

“Everyone paying invoices out there knows already, it takes on average 19 days to get paid on an invoice,” he said. “And it can be longer and take months and months. That creates gaps in the cash flow, and that does work because working capital is oxygen for a business. You need it all the time, not sometimes.”

He said Fundbox does not think of itself as a lending company but as a developing “small business financial platform,” one that is aimed at making access to capital and the ability to pay it off easier.

“I’m excited about combining the whole idea of buy now, pay later [(BNPL)] with contextual lending,” Duransoy told PYMNTS’ Karen Webster. “It’s one thing to look for money. It is another thing to find the customer at the moment of their journey and address the appropriate need. That’s BNPL in the consumer context.”

Reflecting back on his time at Capital One, he told Webster that he used to see a lot of pitches from FinTechs looking for partners that promised massive technological transformation in financial services. The trouble was what he often saw when he took a look at the product as something with a tremendously slick digital interface that “under the hood” was just another version of old-fashioned commercial underwriting. From his earliest conversations with Fundbox, he could tell the company was something very different.

Artificial intelligence (AI) is another key element that has attracted Duransoy. Fundbox has a team of data scientists that fill the needs of SMBs that may lack the funds and infrastructure to stay on top of consumer insights.

He said he was also attracted to Fundbox’s recently introduced short-term lending product on offer, which is far lower than average default rates. Fighting off risk in lending isn’t about relying entirely on the underwriting process.

“What I’ve seen over and over in my two decades of financial sector experiences, underwriting is the last thing that protects you from higher losses,” Duransoy said. “It is first the product, and [then] where and how you sell it. And then finally the underlying underwriting behind the scenes.”