>> Male Narrator: Live from San Jose, California, in the heart of Silicon Valley, it's the Cube, covering QuickBooks Connect 2016. Now here are your hosts Jeff Frick and John Walls. >> And welcome back inside the San Jose Convention Center here at the Cube, along with Jeff Frick, I'm John Walls, appreciate you joining us here as we continue our coverage of QuickBooks Connect 2016, live here on SiliconANGLE TV. This is the flagship broadcast where we extract the signal from the noise. And Jeff, we're on the home stretch here through the second day, I could stay here for a few more days. Great guests, great lineups, great keynotes, and a lot of energy here on the floor I like. >> Lot of energy, I love these kinds of shows because it's really about helping people be successful and we're talking about real things, and again we keep coming back to products and solutions in technology but for most small businesses it's about cash. It's about cash flow. >> Being successful, Rania Succar, is now joining us, she's a QuickBooks Financing and Director there at QuickBooks, and we appreciate your time here, Rania. >> Great. >> So tell us about just the overarching mission, right, cause as Jeff said, helping people, giving them access to capital, badly needed, small businesses, it's a critical need, and what QuickBooks does on that, with that, on the financing platform. >> Well you guys have seen it here for the last few days. The QuickBooks team is absolutely focused on helping small businesses survive and thrive. Everyone here's trying to crack that, and you just said it, cash is one of the biggest pain points that small businesses face. Whenever we talk to small businesses, the first thing they tell us is the thing that keeps them up at night is cash flow, and we also know one of the biggest reasons that small businesses fail is they can't get access to cash flow, and to cash, and so the team a couple years back said we've got to crack this in order to help more small businesses survive past the five year mark and be able to put their dreams into action. So with that in mind, we took a look at financing and for small businesses, it's a fairly broken process, so we're working to reinvent small business lending. It's broken for a couple of reasons, one is, if you have ten businesses that go into a bank to apply for a loan, only three get approved, and it takes over 30 hours of work for a small business to do that application to a bank, so it's right for innovating and improving the experience for small businesses, so what we do, is we're hyper focused on making the experience better in three ways, first, we're trying to drive up the approval rate, and we do that with the incredible clarity and we do that with the incredible clarity with which we can understand the small business based on the data that we have. We understand the small business ecosystem better than anyone, and we understand the full picture of a small business' credit worthiness, and financial health better than everyone, anyone. We can give them access to-- we can help them get credit for all the future invoices that they have coming in, we understand the strength of their customer base, you put that together, we can drive approval rates up. The other thing we're focused on is the time it takes to apply. You need to put together tax returns, and interim financial reports if it's the middle of the year, and bank statements, it's very frustrating. We have most of that information in the Intuit space, and our vision is rather than even applying it's just available for you in QuickBooks when you need it, and the third thing, so approval rates, the time it takes, the third thing we're very focused on is the guidance. Small businesses need advice, most of them didn't get into running their own small business because they knew anything about finances, they had a dream and they wanted to put it into place, and so we're very focused on taking the insights we have about a small business to help them get lending that's right for them with confidence that they're getting the right financing for their business. So we can help them predict when they're going to need financing, and we can connect them to an accountant because we know over a million of our small businesses are connected to accountants. So that's what we do, and this week as you heard, we just announced we crossed the half a billion dollar mark in financing in small businesses. >> Now, say that again. >> Half a billion dollars. >> Half a billion dollars of financing. >> Congratulations. >> We're incredibly proud, we're incredibly proud. >> Let me ask you a couple details, so my kids are going, they're applying for college right now, so the CommonApp-- >> So, Jeff will need somewhere shy of half a million of that money. (Rania laughs) >> Do you have like a CommonApp inside QuickBooks which is a defined kind of definition that then gets shared with the lenders that want to participate in the market, or do you have like a defined QuickBooks FICO score, if you will, based on these other parameters that you have that then get shared with the lenders, how do you kind of, you've got all this data, it's my data, but I'm allowing you to use in such a way to help me get this loan in this market place. How does the actual mechanics work. >> I love that, we're a platform, almost like an Amazon in a sense, where you go to Amazon, you have one thing that you want to get and you get access to multiple different providers, so we're a platform. Right now, the way that it works, there is a CommonApp, but the amazing thing is you don't have to fill it out because we have all the information inside QuickBooks so we pre-fill it for you and ask you just for a couple of things but we do all the work and then we figure out which of our lending partners based on what you need, we've got about a dozen, are best suited for your needs, and then we send the information to the lenders with your permission and then you get all your offers right there, and the really neat thing about what we do is we compare the offers apples to apples, this is pretty incredible, we're super focused on transparency, this is a big part of our value proposition, we always disclose the APR of the loan, we always show the loan cost apples to apples so that you know exactly what you're getting, we show you things like what are the fees, what are the pre-payment penalties, so it's super clear, super transparent, and you know what you're getting. >> It's like the comparison shopping table. >> Exactly. >> You lay it all out and I can make my decisions. >> Exactly. >> And then how long does it usually take on a relatively smooth process given the fact you're already pre-populating the data, it goes out, what does it usually take? >> A lot of our lenders fund within the same day. >> Jeff: Within the same day? >> So you literally with a lot of our lenders, if everything goes right, you can apply within minutes and get funding in your bank account the same business day. >> The money goes through the same system as well. (Jeff chuckles) >> There are lenders, and we have a portfolio of offerings, so we'll work with, we have an SBA lender, we've got work in capital lenders, if you're going through the SBA process it's a lot faster through our process than it would be if you applied through a traditional bank, but it still could take a couple of months in that case, so we make that very clear, when you choose the offering that you want, if you're in need for financing right away, it can happen very quickly, if you're willing to wait a couple more months, in the worst case, in the case of an SBA loan, on average, it's less than a week. >> Well it seems like you have so many pieces in place to make it much more convenient and much more reliable and I guess much more predictable for a small business, what about approval rates then, what, you said three out of ten? >> That's the current. >> On average, is that the current, is that your average? >> Ours is better than that, it's not quite there, you know, we have a really high aspiration on that, where we'd like to be able to get, you know, we'd like to get it closer to 60 or 70 percent over time, the approval rate, so we're still moving in that direction, we've got a great team, we've got tons of innovation and R&D happening right now back in Mountain View, we've got a ton of data scientists that are combing through this data and improving the approval rates all the time, so that's an area where we're innovating and really pushing for our small businesses. >> And so, nice announcement this week, well better than nice, great announcement this week, but you're always looking, as you said, for the next best thing. >> Rania: Yep. >> And so what have you heard from your client base that says okay, we've addressed this, now this is where we need to pivot, this is where we need to go, like what's the next big hurdle or next big challenge that you think you need to handle? >> It's innovating on those three areas I told you, and on each of those three we've made quite a lot of work and quite a lot of headway in the last few years, but there's so much more room, and so like I've said we have this team of phenomenal data scientists working to find those areas of advantage for small businesses where we can help them get approved more often. We've got the team that's trying to really make it to a point where you're in QuickBooks and you can see your financing offer before you even apply. We want to get rid of the application altogether and just service the best offer for you, and then all the prediction for when you're going to need financing and that cash flow prediction, looping in the accountant so the accountant can immediately see all the options you were given and they can talk through them with you. >> And your clients can find out right away, the customers, if they did not get approved. >> Right. >> Where's the trouble area, where did the red light come on? >> That's right. >> Because of the figures you're able to consult with them and help them maybe shore up their bottom line? >> We don't do enough of that today, it's absolutely in our road map, so that's a huge opportunity because we have a relationship with small businesses, it's not like a transaction where you go to a website and you apply for a loan, we're in it for the long term to help small businesses grow and so you can imagine, and this is where we're headed, when you start, you know, you get your first financing, it could be a credit card, and then a year or two later we see that you're financials have improved and we consult you on the next offering and all the way you get better terms because you've been with us for a while and we can help make sure you're getting better financing deals over time. >> It's a really interesting situation, because, you know, hopefully over time, really it becomes, we always talk about kind of looking back, and then predictive and then prescriptive, so in theory, as you're moving down your path, as you're growing your business, it should actually flag you, right, hey, by the way you've got a big event, seasonalities coming up, oh we just noticed you just locked in a big purchase order, somebody's late to pay et cetera, it might be a good time to get actually ahead of the curve before you even know that this event is coming to go ahead and make even up to in making the offer. >> Absolutely, you know, you're getting ready to, you know, for the holidays and have you thought about making sure you've got enough financing to buy as much inventory as you want this year so you can take advantage of the seasonal trends we're seeing. Or we're seeing a lot of retailers, you know, really heavying up on inventory, have you thought about doing that as apart of your strategy, it looks like it could be a good year, so there's so much opportunity there, we can pair every small business owner with a line of credit so that they can manage payroll at any given time and never have to worry about the cash flow ups and downs that come. >> Right, and then I would imagine too, within like those different offers, not only apples to apples across the same type of loan, but maybe you should consider, you know, a factoring on your receivables, versus a capital loan that's capitalized against some equipment or something, cause there's also options within the types of financing that you may want to do. >> So on that we've done quite bit of work. We have lenders in our portfolio that do invoice financing. We've got lenders in our portfolio, Amex working capital terms, that do vendor bill payment through, you know, paying all of your bills that are coming up, we've got as I said SBA loans that will help with long term expansion, we've got that, and we're just continuing to innovate on that too. >> And from the lender point of you, you said you have about a dozen, you're bringing in more, you know, for the opportunity, cause a lot of them probably already have existing relationships with many of these clients, how do they see kind of the opportunity to interface for those clients in this different way through QuickBooks as an intermediary? >> Oh, they love it, because it's very hard for these lenders to go out and acquire new customers, often times they don't have a relationship with these existing customers and they have to go out and do the hard work to acquire customers whereas they're in the QuickBooks ecosystem and, you know, customers really love the opportunity to work with these lenders because we can provide the right advice to them paired with the loan offering, so it works out very well. >> It should be cheaper for them to actually provide those too, cause again you're taking a lot of the headache out. So, before we went live, you talked about some of the numbers, I just want to go through some of the numbers, so you shared the big number 500 million. >> Yep. >> But in terms of kind of an average loan size that you see, in a lifetime value of the loans to some of the customers, I was wondering if you could share some of those statistics. >> Sure, so we see two very different needs for financing from our customer base, there's the work and capital loans, and there's the expansion capital loans, and our customers typically are split between the need for both and at any given time, a business is actually looking for both. They need to smooth over the work and capital and then the expansion capital as well, but our average loan size is about 35,000 dollars today, and it ranges from as little as 2,500 dollars to just smooth a very small cashflow bump that you have, all the way up to 250-500 thousand dollars to do some of the all the way up to 250-500 thousand dollars to do some of the bigger expansions that small businesses are looking to do, and it's really wonderful to be able to help small businesses on both sides of the spectrum because if you're a small business owner, seasonality is really a major pain point. Often times, they'll have most of their business concentrated in the summer months, or potentially the summer months and the winter months, but not the spring and the fall, and so you need, you still have tons of bills, you have employees you need to cover in those off months, and having access to financing where you can get it fairly quickly cause you don't know when those bumps are going to hit, is incredibly valuable. On the flip side, the expansion side, every business owners dream is to expand and it's been amazing to be here over the past few days and hear these stories, you know, Alli Webb on stage yesterday, the founder of Drybar, talking about how she went from one location to 66 in 5 years, and so it's very hard to go into a bank branch in 5 years, and so it's very hard to go into a bank branch and convince them of your grand idea to expand. >> Jeff: Especially if they don't have hair. >> Especially if they don't have hair, she had a hard time... (everyone laughs) >> Her husband and her brother are business partners and they're both bald. >> Yeah, they're sitting with them, they don't have hair either, so. >> So for that reason, it's hard to convince people, and so it's wonderful to be able to help the expansion side of things too. >> Hopefully this has been, if nothing else, a great opportunity for Frick Inc. to find out about the small business college fund. >> Jeff: It's already gone through. >> That quick. >> John: Right, so we'll find out in less than 24 hours. The kids are going to Stanford. >> Alright. >> Or you're going to work at the community college for a bit. Rania we appreciate the time. >> Sure, it was great. >> Very much, thank you for being here. >> Thank you. >> And congratulations on the Amex announcement, and so many other great things you have in the pipeline now to make small business dreams come true. >> Wonderful, thank you very much, it was great to chat with you. >> Thank you very much Rania. Back with more here on the Cube from San Jose in just a moment. (hip tech music)