Rohit Arora CEO of Biz2Credit on Covid-19 and Small Businesses
How can Small Businesses in the United States survive and stay afloat during the Covid-19 pandemic?
During times like these, (the Covid-19 pandemic), it is the small businesses that suffer the most. Declining demand for goods and services and lack of access to sufficient credit causes many of the most promising to go underground.
E-Crypto News decided to find ways around this and spoke to Rohit Arora who is the CEO of Biz2Credit. Biz2Credit is an online business loan service that offers small businesses access to the much-needed lines of credit. As an alternative financing platform, Biz2Credit matches businesses with all kinds of credit lines.
According to Wikipedia:
Biz2Credit was founded in 2007 by Ramit Arora and Rohit Arora as an online financial platform in the alternative lending industry. While the company began initially as a provider of Marketplace lending for businesses, in 2013 the company changed its approach and to offer financing directly to its clients.
The company’s investors include Nexus Venture Partners and Tata Capital. In 2014, the company received a $250 million commitment from direct lending investment to expand its small business financing facility.
About Rohit Arora
Entrepreneur.com has this to say about Rohit Arora:
Rohit Arora, CEO of Biz2Credit, is one of the country’s best-known experts on small business financing and financial technology (FinTech).
Biz2Credit was founded in 2007 and is backed by Nexus Venture Partners. Since its inception, Biz2Credit has become the leading online marketplace for small business funding, having arranged more than $2 billion in small business funding for thousands of companies throughout the U.S. Biz2Credit is expanding its industry-leading technology in custom digital platform solutions for leading banks and other financial institutions, investors and service providers in the U.S., India , Australia and Canada.
Small Business Trends had something to say about Rohit as well:
Rohit Arora, CEO and Co-founder of Biz2Credit, is one of the country’s leading experts in small business finance. Since its founding in 2007, Biz2Credit has arranged $800M in small business loans and has helped thousands of entrepreneurs. Rohit was named Crain’s NY Business “Entrepreneur of the Year 2011.”
Rohit is an often quoted expert on small business lending for major news media, including: New York Times, The Wall St. Journal, Bloomberg, Entrepreneur, American Banker, CNNMoney, MSNBC, Inc., and Washington Post.
A frequently sought guest speaker; he was a panelist at the 2012 New York Times Small Business Summit, National Association of Federal Credit Unions (NAFCU)’s Small Business Lending Conference;” the American Asian/Asian Research Institute’s panel on small business growth; and the Harlem Business Alliance’s 9th Annual Harlem Business Economic Summit.
Rohit oversees the Biz2Credit Small Business Lending Index, a widely reported monthly snapshot of small business loan approvals. Its findings are reviewed by Federal Reserve and SBA officials, as well as the President’s Council of Economic Advisors. He has written columns on SMB finance for FOX Small Business Center, Franchise Handbook, NewJerseyNewsroom, New York Enterprise Report, and others.
Founded in 2007, Biz2Credit is a leading credit marketplace connecting small- and medium-sized businesses with lenders, service providers, and complementary business tools. The company matches borrowers to financial institutions based on each business’s unique profile — completed in less than four minutes — in a safe, efficient, price-transparent environment. Biz2Credit’s network consists of 1.6 million users, 1,100+ lenders, credit rating agencies such as D&B and Equifax, and small business service providers including CPAs and lawyers.
Concerning the situation surrounding small businesses in the media, Rohit has said several things abouthte covid-19 pandemic and small businesses. As a former member of the US Presidential Council of Economic Advisers (during President Barrack Obama’s administration), he may have a point or two which could work out for everyone if taken to heart. He has said recently that :
We need to act fast or else 75% of small businesses in America will go bankrupt if they don’t get access to credit in the next 60 days Small business owners need money in hand. This is very different from the normal speed of the way the funding process occurs. We need radical federal and state intervention.
He also said recently:
Normally, SBA loans can take months to process and get cash to small business borrowers. The SBA is doing all it can, but the online Disaster Loan application form is 15 pages and then you have to attach up to 20 documents. It will take hours to fill out the form completely. Small business owners need cash quickly, and there is no guarantee of how long it will take for business owners to get this disaster funding.
His fears were also clearly expressed when he said recently that:
My fear is that the SBA disaster loan site may crash. It wasn’t built for the anticipated volume of applications from businesses that were sailing along fine two weeks ago and now are in desperate need of cash. The SBA has a network of partner banks, but the agency will need the help of FinTech companies to handle the volume of applications that will come. The longer this health crisis goes on, the worse it will be for small businesses, the economy, and the country overall. We understand how to efficiently collect data digitally.
Rohit Arora, CEO, Biz2Credit
- As a startup, how did Biz2Credit fare in lean times?
We started just before the 2008 crisis so we have lived through tough times. In times like these one needs to lead from front and motivate the teams to work closely with small business owners .
- What advice would you give to business owners having a tough time at the moment?
This is a true black swan event and next 6 to 8 weeks will be really tough. One needs to conserve cash and also keep the staff motivated. Like any other event like this it will pass and we will see a strong economic growth so one needs to keep their spirits high.
- What strategic advantage does Biz2Credit offer business owners?
We have a fully digital platform and multiple repayment options to help business owners get through these crisis times. We are also holding webinars to help small businesses to get through this time. https://www.biz2credit.com/disaster-support/sba-disaster-loans-coronavirus
- What is the Biz2Credit Service doing differently from other lenders?
We are helping our business owners to get access to state, city and federal money as well as helping them with bridge financing. We are giving them free cash flow tools also.
- Are we seeing a shift from traditional risk-based lending models to models that are based on new technologies?
Right now tracking the cash flow of businesses by states and industries is very imp as it would form the foundation of modern age risk management.
- How do you measure and assess risk when it comes to lending?
We look into the cash flow of the businesses as well as their personal credit scores and industries.
- During these times (the COVID-19 pandemic), what are you willing to do differently from other lenders so that the American Economy and business owners can gain?
We are working with our business owners to get them access to disaster loans.
- Is Biz2Credit’s credit scoring model different from regular models used these days? If so, how different is this?
We use cash flow based models and one based on probability of default.
- What will the American economy be like after the COVID-19 pandemic situation is over?
The economy will be totally different after this crisis as people will work in a more digital manner and will share data in online manner.
- If you had three wishes for the American economy and a Genies that will make those wishes come true, what will they be?
We should rcover from this crisis and go back to normal growth rates.