Nav, a business credit management marketplace, this week announced the launch of a new feature called MatchFactor. It uses a proprietary algorithm combined with machine learning to help small business owners save time searching for funding. And the company claims it makes getting approved four times more likely.
The feature, which is part of Nav’s financing dashboard, tells business owners just how likely they are to receive approval based on a rating that uses information such as their credit score and the lender’s qualifications for financing, the company says.
More than 67 percent of Nav customers surveyed about MatchFactor stated that they used their rating to apply for a loan or credit card, choose the best options or better understand the reasons why they did not qualify, says the announcement.
How MatchFactor Works to Boost Business Financing Approval
The machine learning process employed by MatchFactor continually improves the proprietary algorithm with each new application submitted and subsequent approval or denial from the lender. This makes the platform smarter, faster and more accurate than self-reporting systems used by other financial marketplaces.
Nav does not need to pull a business owner’s personal or business credit, which can adversely affect scores. It already has access to a majority of the information lenders use to judge whether or not a business is credit worthy.
The algorithm generates a “likelihood of approval” rating for each business credit card and financing offer available in the marketplace. Nav bases the rating on the business owner’s credit and financial data as compared to the lender’s underwriting requirements.
Nav customers will see a MatchFactor score next to each financing product in the marketplace, ranging from 0 to 100 percent with top matches displayed first. The higher the score, the more likely the funding option is to get approved.
“Nav’s goal is to make it easier for small businesses to find financing, sort through all the offers and apply with confidence,” said Gerri Detweiler, head of market education at Nav, in a phone interview with Small Business Trends discussing the announcement. “MatchFactor lets business owners apply more confidently by giving an indication of their likelihood to qualify for the loans or credit cards they’re interested in.”
Business Financing Stats Reveal Abysmal Trend
“Everyone says they love the American Dream, but when it comes to financing your own business, the dream and reality don’t add up,” said Levi King, CEO and co-founder of Nav, in the announcement.
The following business financing statistics, taken from the announcement, fortify King’s conclusion and reveal an abysmal trend:
- On average, it takes 26 hours to search and apply for business financing;
- 72 percent of small businesses get turned down for traditional loans;
- 22 percent of business owners have given up on applying because they’re discouraged.
Nav’s Mission: Reduce U.S. Small Business ‘Death Rate’
Nav’s mission is to “materially reduce the small business death rate in America” by providing businesses with access to financing minus all the hassles associated with borrowing money, the announcement said.
“Helping business owners quickly access their best funding options can have a significant impact,” King said. “Most business owners barely have enough time to eat lunch, much less [spend] 26 hours researching financing.”
As a self-professed serial entrepreneur, King said he has been down the financing road more than 30 times. His experience provided the impetus to create MatchFactor.
MatchFactor has been in beta testing for a few months and is being rolled out to all registered users starting today.
Nav provides free access to personal and business credit reports, tools to build credit and a marketplace that connects users to pre-qualified financing. Currently, more than 130,000 entrepreneurs and business owners use Nav to manage their credit and get financial advice.