A portal that helped more than 2,000 certified public accountant firms originate about 40,000 Paycheck Protection Program loans is
Biz2Credit’s CPA Business Funding Portal now enables certified public accountants to offer small-business clients term loans from $25,000 to $1 million. It’s the first foray outside the PPP arena for the 15-month-old portal, but it won’t be the last, Biz2Credit CEO Rohit Arora said. Biz2Credit is considering adding commercial insurance capabilities, Small Business Administration and commercial real estate loans, as well as merchant services.
“We’re going to become an end-to-end financing platform for CPA firms,” Arora said. The CPA relationship also provides a steady flow of "high-quality clients" for other products, he said.
Many CPA firms became more deeply involved in the financing process as a result of PPP, and that experience has transformed the way many think about their role with small business clients, according to Arora. Now, the hope is that CPAs can capitalize their role as a source of strategic guidance on financing options and begin originating conventional loans.
It's an example of how measures adopted during the pandemic can be adapted for long-term loan growth. Biz2Credit launched the CPA Business Credit Portal in September 2020 in partnership with the American Institute of Certified Public Accountants. Back then, the focus was squarely on PPP.
Few advisors are better positioned than CPAs to offer guidance on business financing
According to Erik Asgeirsson, president and CEO of CPA.com, AICPA’s business and technology arm, accountants proved more successful in securing loans on behalf of their clients than small-business owners who applied on their own. The same trend should be evident in the conventional term loans they originate, Asgeirsson added.
“Few advisors are better positioned than CPAs to offer guidance on business financing as part of an overall assessment of a company’s health and growth opportunities,” Asgeirsson said. “We feel their participation in the process brings a greater level of trust that can benefit both lenders and clients.”
Given the loans’ $25,000 to $1 million size parameters, many prospective borrowers are likely to be smaller businesses “that lack a track record that lenders can use to assess their health and price risk,” said Paul Davis, director of market intelligence for Strategic Resource Management in Memphis, Tennessee. To fill that gap, Biz2Credit “is relying on accounting firms’ knowledge of their customers … it’s an interesting concept.”
For AICPA, offering CPAs a small-business lending option was a natural extension of the portal post-PPP.
“We always envisioned that the next iteration of the Portal would be able to support the profession in offering this service,” Asgeirsson said. “The demand for firm advisory services, which includes business financing, has been steadily increasing for many years now. The pandemic has only further accelerated it.”
Though he did not provide any projections, Arora said he expects demand to be strong “as the government rolls back all this massive stimulus.” Once a loan is originated, Biz2Credit acts as both underwriter and servicer. It can move a credit from the application stage to approval and funding within 72 hours, Arora said.
Biz2Credit is counting on third parties — including banks — to fund much of that anticipated production. That means underwriting “has got to be consistent with what financial institutions want,” Davis said.
Biz2Credit, which began in 2007 as an online funding provider to the small-business sector, has provided more than $7 billion in financing to hundreds of thousands of small businesses across the United States. In recent years, Biz2Credit has expanded its technology-focused business,
