2 Startups Aim to Help Banks Do More for Small Businesses

Small businesses are classically underserved by banks — or so the story goes.

But a closer look at the small business space shows banks are stepping up partnerships with startups targeting the space, and are adding new services and improving existing services for small businesses in general. Just last week, for example, JPMorgan Chase rebooted Ink, its small business card service, and Capital One signed a deal with Vantiv to step up its merchant processing.

Two startups serving banks are also advancing what banks can offer small business customers: SizeUp, which was one of three startup winners at Innotribe in June, and alternative lender Mirador Financial.

SizeUp offers business intelligence based on location, to show businesses threats and opportunities in their space. Mining information from hundreds of inputs, most publicly accessible, SizeUp lets businesses compare themselves to peers and see a revenue heatmap by ZIP code.”This can help businesses determine good locations for additional branches,” CEO Anatolio Ubalde told Bank Innovation. It can also tell them if they have too many employees, or are paying them too much or too little.

Wells Fargo is already offering the tool, as is Deutsche Bank in Italy, and Ubalde is looking to add SizeUp’s service to banks all over the globe. This can be “behind the curtain” for existing small business customers, or out in front, as a customer acquisition tool, Ubalde said. Digital businesses may not benefit — SizeUp is meant for the brick-and-mortar world. “If you invented the next FourSquare, SizeUp is not the tool for you,” Ubalde said. “But for most other businesses, we have great data for you.”

SizeUp is based in San Francisco and was founded in 2009. Its funding is undisclosed.

Mirador Financial offers banks a platform for quickly and efficiently offering small business loans, and was recently endorsed by the Oregon Bankers Association, a group of Oregon-based community banks. Mirador CEO Trevor Dyer compared this to the Good Housekeeping Seal of Approval, and is working to secure more such endorsements.

Mirador is based Portland, Ore. It was founded last November, and has $3.5 million in funding.

Small business lending is a space banks let slide following the Great Recession, making room for alternative lenders such as Funding Circle, Kabbage, OnDeck, DealStruck, and CAN Capital, to name just a few. Unlike these companies, Mirador Financial is only looking to offer its service through banks. The experience it allows banks to provide is up to the standard of other alternative lenders: fast, intuitive, and convenient.

Dryer said that while banks certainly know to originate these loans on their own, “banks have too much they’re working on” to specialize in this. For community banks with tight budgets and limited staff, that is particularly true. Community banks are showing a willingness, Dryer said, to look into what fintech startups have to offer. New companies, he said, help banks “move faster, and offer cutting-edge stuff with a high level of service.”

Mirador is optimizing its service for small to medium-size banks, and is focused on the Pacific Northwest, with ambitions to expand beyond that soon.