The online lender Kabbage continues to add digital offerings for small businesses, with its latest product an artificial intelligence-driven cash-flow dashboard.
This is an example of how fintechs are running circles around most traditional banks, in this case by offering financial insights that will likely lead to greater customer loyalty.
Last month, Kabbage launched short-term loans to small business, with terms of anywhere from three to 45 days.
In October, the company rolled out Kabbage Payments, a payment-processing solution for small businesses.
The latest product, called Insights, shows small-business owners their cash flow over the past 90 days and their predicted cash flow over the coming month. It also shows them how they compare to other small businesses in their area.
This information can help business owners make decisions about cutting expenses or reminding customers to pay their bills.
To create the dashboard, Kabbage gathers customer data from aggregators and, in some cases, its own payment-processing offering.
The latest product could help small-business owners save time: Research Kabbage conducted recently found that small businesses typically spend more than 20 hours a week on calculating and managing their own cash flow.
Kathryn Petralia, co-founder and president of Kabbage, noted that among the company’s 220,000 customers, 90% have fewer than 10 employees and typically don’t have access to this kind of tool.
Petralia said the product is not designed to entice entrepreneurs who see a shortfall coming to borrow more. Instead, Kabbage is trying to help customers take out fewer loans, she said.
“We went into this because we believe that our customers borrow too much, and they hold the money for too long, and they pay too much in fees,” she said. “We're trying to help them be more precise in the manner in which they borrow and the amount that they borrow. I think there's this misconception that small businesses are borrowing because of increasing volatility or turbulence, or they need to manage a cash-flow gap. That does happen, but a lot of times they simply want to invest in growth.”
The cash-flow projections can help businesses make these kinds of decisions, she said.
“If you can tell a business that they're actually doing well and they're doing better than the benchmark, then they have more confidence to invest in their business because they think that they're doing a good job,” Petralia said.
Kabbage’s aim is to give its customers a single destination for products that address their cash-flow needs, including payments, invoicing, and loans, she said.
“If we're able to connect those tools together for them, then we can help them make better decisions about how and when to save and borrow,” Petralia said.
