| SAN FRANCISCO
SAN FRANCISCO May 14 Kabbage, a start-up that
specializes in financing for small online merchants, has teamed
up with Intuit Inc to expand its service to
Kabbage said on Tuesday it will use data from QuickBooks,
Intuit's accounting software, to make quick decisions on whether
to extend financing to businesses that use the software.
About four million retail, services and manufacturing
businesses use QuickBooks, expanding Kabbage's potential reach.
Until now, Kabbage has focused on financing for sellers on
e-commerce marketplaces, such as those run by eBay Inc
and Amazon.com Inc.
Kabbage is one of several companies that are using new
sources of data from the Internet to underwrite differently than
banks and other traditional lenders.
PayPal, the payment division of eBay, and Amazon have also
begun lending money to merchants that sell on their
marketplaces, using online data to underwrite the process. [ID:
Some banks already use QuickBooks data, along with lots of
other information, to help them underwrite small business loans.
However, Kabbage will be the first company to use only
QuickBooks data to decide whether to extend financing.
For Intuit, teaming up with Kabbage makes its QuickBooks
service more attractive to small businesses, by helping them get
financing more easily.
"Small businesses have had a terrible time trying to get
capital," said Richard Preece, a director at Intuit's QuickBooks
unit. "If it's easier for QuickBooks users to get financing,
that's a good thing."
Through the partnership, Kabbage gets access to information
including cash flow, employee count, inventory levels and vendor
payments, Preece noted.
"There are literally hundreds of data points and the
combination of those over time allows Kabbage to start
underwriting in a way that banks don't do today," he added.
Thomvest Ventures is a Kabbage investor. Thomvest Chairman
Peter J. Thomson is a director of Thomson Reuters Corp, which
owns the publisher of this report.