In small-business financing, banks and loan applicants often have different agendas.
“Banks are looking for the highest credit quality and larger-dollar loan,” said Greg Ott, the president of Nav, which makes a financial management app for businesses and announced a new round of venture funding Tuesday. “A small-business owner often has a less-than-perfect credit profile or a smaller-dollar need.”
The Salt Lake City-based fintech, which sees itself as the Credit Karma or Rocket Mortgage of small-business lending, recently raised $44.8 million in funding to expand its lending partnerships and customer base. It has raised more $93 million in total.
Nav aims to help small-businesses find financing and offers them free access to business and personal credit reports. Its app lets business owners know what sort of loan they qualify for before they apply. Nav says it has more than 40 lending partners, including some of the biggest banks: Bank of America, JPMorgan Chase, Wells Fargo, U.S. Bank and Citibank.
“We sit on the credit and cash flow data,” Ott said. “Before they even apply we can help align their qualifications with the lender’s criteria. We make it a lower-cost transaction for both the borrower and the lender.”
The Series C round was led by Goldman Sachs Principal Strategic Investments, with participation from Point72 Ventures, Experian Ventures, Aries and CreditEase Fintech Investment Fund. Other investors include Kleiner Perkins and Tencent Holdings.
Rana Yared, managing director at Goldman Sachs Principal Strategic Investment, will move from an observer on Nav’s board to a voting director as part of the bank’s investment.
“We are pleased Goldman Sachs led this round of funding,” Yared said in a press release. “We look forward to continuing to support Nav’s efforts to scale their platform as they make financial options more readily accessible for millions of small-business owners.”
In November, Equifax joined Experian and Dun & Bradstreet as partners of Nav. The fintech said that the move makes it the first and only provider of free small-business credit data from all three major business credit bureaus.
To date, Nav serves more than 1 million small-business owners, the company said in the release.
“Imagine a single platform that uses data to anticipate and deliver all of a small-business owner’s financial needs,” Levi King, co-founder and CEO of Nav, said in the press release. “Because we can see the pattern of everything from who gets approved for financing to who has strong cash flow, we can solve for the myriad financial considerations for small businesses. This also means we’re doing legwork for lenders by matching them to the most appropriate candidate.”
