Keeping Small Businesses Moving Forward with Rapid Finance CEO, Will Tumulty

Will Tumulty is the CEO of the company Rapid Finance which Rapid Finance that provides small businesses with access to capital when they need it most. He shares how he got into Fintech and how Rapid Finance is helping lenders and small businesses with financing solutions.

Three things in this episode that we dive into.

1️⃣ How being a Navy Seal prepared him for corporate America

2️⃣ The importance of modularity in lending software

3️⃣ Why businesses that need funding should look to alternate lenders.

Enjoy the entire episode on youtube.

Links:

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ABOUT:

Will Tumulty: As CEO, Will is responsible for expanding Rapid’s product portfolio, growing direct business and enhancing our partnership channel relationships. He possesses over 20 years in the banking and payments industry and has held management positions in marketing, operations and IT at Capital One and AccountNow. Will holds a Bachelor of Science in aerospace engineering from the United States Naval Academy, as well as a Master of Science in manufacturing systems engineering and an MBA from Stanford University

Rapid Finance: Rapid Finance has a proven track record of helping small businesses (and those who support them) succeed and since 2005, has been offering fast, simple, and trusted financing options that provide small businesses with access to capital when they need it most. Using a thoughtful combination of technology, speed and deep industry expertise, Rapid Finance has helped millions of small business clients find financing plans that meet their unique business needs.

Tedd Huff: President & Founder of Diamond D3, a professional services consulting firm focused on global payments and marketing. He is also a video podcast host and producer of Fintech Confidential and Head of Corporate Strategy at Corvia.

Over the past 24 years, he has contributed to FinTech startups as an Advisory Board Member, Co-Founder, and Chief Experience Officer, providing strategic and tactical direction for Global Payments OpenEdge, Heartland Payments, Nuvei, and TSYS, among others, focusing on growth while delivering innovation, process improvements and user experience-driven value to simplify the complexity of payments.

Diamond D3, Media: A media creation, management, and production company delivering engaging content globally

Transcript

Will Tumulty CEO Rapid Finance:

: 00:00:00

as what I've seen over a couple

Will Tumulty CEO Rapid Finance:

: 00:00:01

of decades doing FinTech work

Will Tumulty CEO Rapid Finance:

: 00:00:04

the biggest thing that I think separates success,

Will Tumulty CEO Rapid Finance:

: 00:00:08

from lack of success is those businesses that find demand.

Will Tumulty CEO Rapid Finance:

: 00:00:13

even if you don't have the business model right at first,

Will Tumulty CEO Rapid Finance:

: 00:00:16

you will figure it out over time.

Will Tumulty CEO Rapid Finance:

: 00:00:18

Some of those companies get up and get going but

Will Tumulty CEO Rapid Finance:

: 00:00:22

if they're not able to pivot into something where they find demand,

Will Tumulty CEO Rapid Finance:

: 00:00:26

and are able to meet that demand,

Will Tumulty CEO Rapid Finance:

: 00:00:27

it's really tough to get a business off the ground.

Tedd Huff | Fintech Confidential:

: 00:01:02

Will welcome to the show.

ill Tumulty CEO Rapid Finance: 00:01:05

Hey, Tedd, it's great to be with you here today.

tedd_huff___host__fintech_confidential:

: 00:01:08

Rapid Finance is a small business

tedd_huff___host__fintech_confidential:

: 00:01:10

finance software that has offered, trusted financing with technology

tedd_huff___host__fintech_confidential:

: 00:01:16

speed, and deep expertise since 2005.

tedd_huff___host__fintech_confidential:

: 00:01:20

And Will, you're a former Navy Seal, a Stanford grad, and have

tedd_huff___host__fintech_confidential:

: 00:01:25

been involved with banking and payments for well over 20 years.

tedd_huff___host__fintech_confidential:

: 00:01:29

You gotta tell me, how did you fall into FinTech?

Will Tumulty CEO Rapid Finance:

: 00:01:33

Uh, you know, Tedd, uh, I was

Will Tumulty CEO Rapid Finance:

: 00:01:36

interested coming outta grad school in manufacturing of all things.

Will Tumulty CEO Rapid Finance:

: 00:01:40

And, uh, one day walking across the quad I was tackled by a recruiter from

Will Tumulty CEO Rapid Finance:

: 00:01:45

Capital One who drug me over to a table, and then I found myself in banking.

Will Tumulty CEO Rapid Finance:

: 00:01:49

After a few years of Capital One, uh, doing some telecom work in an ill-fated

Will Tumulty CEO Rapid Finance:

: 00:01:54

telecom venture that the company was after there, uh, I got onto other

Will Tumulty CEO Rapid Finance:

: 00:01:58

things, did some, uh, some debt buying, some collections, some specialty credit

Will Tumulty CEO Rapid Finance:

: 00:02:02

card work and actually started the first prepaid debit card program, uh,

Will Tumulty CEO Rapid Finance:

: 00:02:06

at Capital One, uh, many years ago.

Will Tumulty CEO Rapid Finance:

: 00:02:09

Uh, I was interested in that, uh, and as Capital One was looking to do

Will Tumulty CEO Rapid Finance:

: 00:02:12

other things in the, in the business that I was running for them, uh,

Will Tumulty CEO Rapid Finance:

: 00:02:16

myself and a couple guys on my team started a prepaid debit card company.

Will Tumulty CEO Rapid Finance:

: 00:02:19

And that's, uh, that's how it all got going.

tedd_huff___host__fintech_confidential:

: 00:02:20

One of the things that I'm really

tedd_huff___host__fintech_confidential:

: 00:02:22

curious about being a vet myself, is there something specifically

tedd_huff___host__fintech_confidential:

: 00:02:27

from Your SEAL training and your SEAL experience and military experience in

tedd_huff___host__fintech_confidential:

: 00:02:32

general that has really helped you,

tedd_huff___host__fintech_confidential:

: 00:02:34

with FinTech?

ill Tumulty CEO Rapid Finance: 00:02:36

You know, I would say the military is a great

ill Tumulty CEO Rapid Finance: 00:02:39

place to start if that's your thing.

ill Tumulty CEO Rapid Finance: 00:02:41

When you are early in your career because you learned a bunch of stuff.

ill Tumulty CEO Rapid Finance: 00:02:44

I was fortunate.

ill Tumulty CEO Rapid Finance: 00:02:46

In that, uh, I got to, um, uh, lead teams, uh, and be responsible for,

ill Tumulty CEO Rapid Finance: 00:02:53

uh, lots of equipment and other sort of mission critical items that had

ill Tumulty CEO Rapid Finance: 00:02:58

a pretty big dollar value attached to them very earlier in my career.

ill Tumulty CEO Rapid Finance: 00:03:01

Uh, and so I think that kind of leadership and management experience

ill Tumulty CEO Rapid Finance: 00:03:04

of people and equipment and dollars, early on in your career is something

ill Tumulty CEO Rapid Finance: 00:03:10

that you get in the military, uh, that you don't get in many other places.

ill Tumulty CEO Rapid Finance: 00:03:14

And so, uh, that's been a, uh, a big leg up for me early in my management career.

tedd_huff___host__fintech_confidential:

: 00:03:18

You know, it's interesting

tedd_huff___host__fintech_confidential:

: 00:03:19

you bring that up because

tedd_huff___host__fintech_confidential:

: 00:03:20

I, as I think back, uh, I had responsibilities for, for billions

tedd_huff___host__fintech_confidential:

: 00:03:25

of dollars of equipment, um, and, and tens of people with within my platoon.

tedd_huff___host__fintech_confidential:

: 00:03:32

So I start to think about that and, you know, you really don't think

tedd_huff___host__fintech_confidential:

: 00:03:36

about it until you start to put it in the words like what you did.

tedd_huff___host__fintech_confidential:

: 00:03:38

I just thought saw it as part of my day-to-day job and, and all the

tedd_huff___host__fintech_confidential:

: 00:03:42

different things and just making sure that things didn't go wrong.

tedd_huff___host__fintech_confidential:

: 00:03:47

Um, but had great, uh, leaders there to help me along the way.

ill Tumulty CEO Rapid Finance: 00:03:51

I think particularly early on when you're, you

ill Tumulty CEO Rapid Finance: 00:03:54

know, whether you're 18 or 22, right?

ill Tumulty CEO Rapid Finance: 00:03:57

Y we don't have that, uh, career reference point, uh, right.

ill Tumulty CEO Rapid Finance: 00:04:02

So it's like, oh yeah, I'm responsible for 30 million dollar fighters jet, right?

ill Tumulty CEO Rapid Finance: 00:04:06

And it's just, this is just what I do for work, right?

ill Tumulty CEO Rapid Finance: 00:04:08

We don't think about that.

d Huff | Fintech Confidential: 00:04:09

Yeah.

d Huff | Fintech Confidential: 00:04:10

So looking you, you'd mentioned a handful of companies that you've been part of.

d Huff | Fintech Confidential: 00:04:15

You started a prepaid card company.

d Huff | Fintech Confidential: 00:04:18

You know what, what was it that, that got you all the way over, I think?

d Huff | Fintech Confidential: 00:04:25

I think you joined a Rapid Finance 2015.

d Huff | Fintech Confidential: 00:04:29

How did you end up at Rapid Finance?

ill Tumulty CEO Rapid Finance: 00:04:32

So, uh, you know, we grew the prepaid debit

ill Tumulty CEO Rapid Finance: 00:04:35

card company for a couple of years.

ill Tumulty CEO Rapid Finance: 00:04:37

Uh, we merged with, uh, another prepaid debit card company outta

ill Tumulty CEO Rapid Finance: 00:04:41

California called Account Now.

ill Tumulty CEO Rapid Finance: 00:04:43

Uh, I continued on with, uh, with Account Now and, uh, we continued to build that

ill Tumulty CEO Rapid Finance: 00:04:48

business up until, uh, until early 2015 where, uh, a bank called Green Dot,

ill Tumulty CEO Rapid Finance: 00:04:54

which is one of the big players, uh, in prepaid debit cards acquired us.

ill Tumulty CEO Rapid Finance: 00:04:57

Uh, and so, uh, a few months thereafter, as I was working on integration items,

ill Tumulty CEO Rapid Finance: 00:05:03

uh, the private equity guys, uh, who had invested in my debit card company gave

ill Tumulty CEO Rapid Finance: 00:05:09

me a call and, uh, asked if I wanted to come back to the East Coast, come

ill Tumulty CEO Rapid Finance: 00:05:12

back to the lending side of things, and, uh, join the team at Rapid.

Tedd Huff | Fintech Confidential:

: 00:05:15

That is F.

Tedd Huff | Fintech Confidential:

: 00:05:16

That is fantastic.

Tedd Huff | Fintech Confidential:

: 00:05:17

So when we look at Rapid Finance, it focuses on providing SMB

Tedd Huff | Fintech Confidential:

: 00:05:24

lending technology through a network of capital providers.

Tedd Huff | Fintech Confidential:

: 00:05:29

How would you describe the Rapid Finance mission?

ill Tumulty CEO Rapid Finance: 00:05:35

Tedd.

ill Tumulty CEO Rapid Finance: 00:05:36

You know, as I think about, uh, our mission here at Rapid Finance, it's really

ill Tumulty CEO Rapid Finance: 00:05:41

to help small businesses grow and prosper.

ill Tumulty CEO Rapid Finance: 00:05:44

Uh, and small businesses need capital to be able to do that.

ill Tumulty CEO Rapid Finance: 00:05:48

Some small businesses, uh, based on the type of business or maybe

ill Tumulty CEO Rapid Finance: 00:05:52

the stage, uh, of the business, uh, that they're in, um, can access all

ill Tumulty CEO Rapid Finance: 00:05:57

kinds of different forms of capital.

ill Tumulty CEO Rapid Finance: 00:05:59

Um, they may get an SBA loan of various types.

ill Tumulty CEO Rapid Finance: 00:06:02

Uh, the United States Department of Agriculture actually has a very big, uh,

ill Tumulty CEO Rapid Finance: 00:06:07

rural small business lending program.

ill Tumulty CEO Rapid Finance: 00:06:09

Um, but then there are other times where, uh, those products are either unavailable

ill Tumulty CEO Rapid Finance: 00:06:15

or they're not the right financing product that the small business needs at the time.

ill Tumulty CEO Rapid Finance: 00:06:19

Um, and so we provide, uh, those sorts of products on our own balance sheet.

ill Tumulty CEO Rapid Finance: 00:06:24

We also work with probably 50 or 60 other small business financing

ill Tumulty CEO Rapid Finance: 00:06:28

companies, uh, to help the small business owner first figure out what

ill Tumulty CEO Rapid Finance: 00:06:33

the right type of financing is for their particular business need at the time.

ill Tumulty CEO Rapid Finance: 00:06:37

Uh, and second, help them secure that financing.

tedd_huff___host__fintech_confidential:

: 00:06:40

So you mentioned a number of products,

tedd_huff___host__fintech_confidential:

: 00:06:42

you know, and I, I looked at the website and you and I had a chance to kind

tedd_huff___host__fintech_confidential:

: 00:06:46

of talk through some of these things.

tedd_huff___host__fintech_confidential:

: 00:06:47

You guys have, offer asset-based loans, factoring bridge loans,

tedd_huff___host__fintech_confidential:

: 00:06:52

small business loans, S B A

Tedd Huff | Fintech Confidential:

: 00:06:54

loans, just to name, a few.

tedd_huff___host__fintech_confidential:

: 00:06:56

How does Rapid Finance

Tedd Huff | Fintech Confidential:

: 00:06:58

look at SMB loans differently

tedd_huff___host__fintech_confidential:

: 00:07:00

than an SBA loan?

Will Tumulty CEO Rapid Finance:

: 00:07:03

Yeah, so some of those loans we

Will Tumulty CEO Rapid Finance:

: 00:07:05

offer on our own balance sheet.

Will Tumulty CEO Rapid Finance:

: 00:07:06

Uh, and some of those financing products we do through partnerships with others.

Will Tumulty CEO Rapid Finance:

: 00:07:11

Um, we are not an SBA lender, so uh, we can help small businesses find an SBA

Will Tumulty CEO Rapid Finance:

: 00:07:17

loan, if that's what they're looking for, through some SBA lending partners of ours.

Will Tumulty CEO Rapid Finance:

: 00:07:21

Um, you know, a small business may or may not qualify for an SBA loan.

Will Tumulty CEO Rapid Finance:

: 00:07:28

Uh, depending on what type of business they are, what stage of

Will Tumulty CEO Rapid Finance:

: 00:07:31

growth they're in, um, uh, and other things about their business.

Will Tumulty CEO Rapid Finance:

: 00:07:36

So many small business owners may start by thinking, Hey, um, what I

Will Tumulty CEO Rapid Finance:

: 00:07:41

need or what I want is an SBA loan.

Will Tumulty CEO Rapid Finance:

: 00:07:44

Um, but, uh, they, that may not actually be the right choice for them.

tedd_huff___host__fintech_confidential:

: 00:07:50

So if I'm a lender or a company, um, cuz

tedd_huff___host__fintech_confidential:

: 00:07:53

you'd mentioned you have partners and you have lending partners in the background.

tedd_huff___host__fintech_confidential:

: 00:07:57

If I'm a lender or a company that's wanting to deploy capital,

tedd_huff___host__fintech_confidential:

: 00:08:00

what should I be looking for in a technology platform provider?

ill Tumulty CEO Rapid Finance: 00:08:06

Yeah.

ill Tumulty CEO Rapid Finance: 00:08:06

So while we are, uh, a lender ourselves, um, we are also making elements of

ill Tumulty CEO Rapid Finance: 00:08:12

our technology platform available to others who are either lenders

ill Tumulty CEO Rapid Finance: 00:08:18

themselves to small businesses or want to become lenders to small businesses.

ill Tumulty CEO Rapid Finance: 00:08:22

Fundamentally, when you wanna be a lender to a small business, um,

ill Tumulty CEO Rapid Finance: 00:08:27

even if you have experience on the consumer side, you need to think

ill Tumulty CEO Rapid Finance: 00:08:30

about it a little bit differently.

ill Tumulty CEO Rapid Finance: 00:08:32

Um, the main difference is when you're doing commercial lending,

ill Tumulty CEO Rapid Finance: 00:08:36

your borrower is not a person, your borrower is, as is a business entity

ill Tumulty CEO Rapid Finance: 00:08:41

that may be owned by one person, or it may be owned by several people.

ill Tumulty CEO Rapid Finance: 00:08:45

And so you wind up having this one to many relationship, uh, of business

ill Tumulty CEO Rapid Finance: 00:08:51

owners to businesses that you have to take into account when you're

ill Tumulty CEO Rapid Finance: 00:08:54

doing your credit modeling and your underwriting for a small business loan.

ill Tumulty CEO Rapid Finance: 00:08:59

And so we offer software platforms, uh, to enable companies to do just that.

Tedd Huff | Fintech Confidential:

: 00:09:05

Give us like an example of, of

Tedd Huff | Fintech Confidential:

: 00:09:08

how a company could use the entire platform to deliver our product.

Tedd Huff | Fintech Confidential:

: 00:09:14

And then we'll dive into like a couple examples of how it's modular in nature

Tedd Huff | Fintech Confidential:

: 00:09:21

and how that can be leveraged to accelerate, uh, a businesses program.

ill Tumulty CEO Rapid Finance: 00:09:27

Sure Tedd.

ill Tumulty CEO Rapid Finance: 00:09:29

So, um, the platform, uh, covers everything that is needed, uh, in

ill Tumulty CEO Rapid Finance: 00:09:34

order to, uh, originate, uh, service, uh, and ultimately collect on if

ill Tumulty CEO Rapid Finance: 00:09:39

necessary, a small business loan asset.

ill Tumulty CEO Rapid Finance: 00:09:42

Um, when we think of the, uh, the value chain for small business lending, it's

ill Tumulty CEO Rapid Finance: 00:09:48

a fairly simple three-step process.

ill Tumulty CEO Rapid Finance: 00:09:51

First, I'm aquiring, uh, and there I'm getting lead, a small

ill Tumulty CEO Rapid Finance: 00:09:55

business owner who is interested in financing for their business.

ill Tumulty CEO Rapid Finance: 00:09:58

The second thing I'm doing is I'm doing origination, which is I'm seeing

ill Tumulty CEO Rapid Finance: 00:10:02

what kind of loan, what dollar amount, and what terms they could qualify

ill Tumulty CEO Rapid Finance: 00:10:06

for, and I'm creating a number of quotes that they can select from.

ill Tumulty CEO Rapid Finance: 00:10:09

Um, then after they accept one of those quotes, it moves on to

ill Tumulty CEO Rapid Finance: 00:10:13

servicing where I'm doing the regular collections or perhaps recoveries, if

ill Tumulty CEO Rapid Finance: 00:10:17

that becomes necessary down the road.

ill Tumulty CEO Rapid Finance: 00:10:19

Um, and so we have elements of our platform that can

ill Tumulty CEO Rapid Finance: 00:10:22

do do all of those parts.

ill Tumulty CEO Rapid Finance: 00:10:24

Um, we can take on the origination by standing up, uh, an online web

ill Tumulty CEO Rapid Finance: 00:10:29

form, or we can have some of our, uh, business advisors that would interact

ill Tumulty CEO Rapid Finance: 00:10:33

over the telephone with the customers.

ill Tumulty CEO Rapid Finance: 00:10:35

Um, we move on to the origination portion, uh, which does a whole bunch of data

ill Tumulty CEO Rapid Finance: 00:10:40

aggregation and enhancement, um, to run credit models and evaluate the credit

ill Tumulty CEO Rapid Finance: 00:10:44

worthiness, the dollar amount, the term, uh, and the rate, uh, that will be

ill Tumulty CEO Rapid Finance: 00:10:49

associated for various financing products.

ill Tumulty CEO Rapid Finance: 00:10:51

Um, then, uh, it will go to underwriting.

ill Tumulty CEO Rapid Finance: 00:10:54

Uh, where if necessary, an underwriter could dig deeper or we

ill Tumulty CEO Rapid Finance: 00:10:59

can run the machine-driven rules, uh, to help the underwriters to

ill Tumulty CEO Rapid Finance: 00:11:03

determine whether this is a, a loan that should be, uh, funded or not.

ill Tumulty CEO Rapid Finance: 00:11:07

Then from funding, it goes on to the servicing platform.

ill Tumulty CEO Rapid Finance: 00:11:11

Uh, and on the servicing side, we're doing all the functions of, uh, uh, customer

ill Tumulty CEO Rapid Finance: 00:11:16

service, uh, collections and working with customers if they're run into a problem.

ill Tumulty CEO Rapid Finance: 00:11:20

Uh, and then ultimately if things write off, uh, the recoveries part.

d Huff | Fintech Confidential: 00:11:25

So when you look at that full solution,

d Huff | Fintech Confidential: 00:11:28

I mean that, that typically takes a lot of time, um, when you start

d Huff | Fintech Confidential: 00:11:33

looking at small business loans.

d Huff | Fintech Confidential: 00:11:37

By being able to have that in a modular fashion, how are you

d Huff | Fintech Confidential: 00:11:40

helping other companies speed up the time to market or the time to,

d Huff | Fintech Confidential: 00:11:45

uh, to funding for the merchants or for the businesses I should say?

ill Tumulty CEO Rapid Finance: 00:11:51

Yeah.

ill Tumulty CEO Rapid Finance: 00:11:51

So Tedd, when we think about the speed, uh, that small businesses

ill Tumulty CEO Rapid Finance: 00:11:56

have a need for capital, um, it's a different sort of thing than if

ill Tumulty CEO Rapid Finance: 00:12:00

you're a really large company, right?

ill Tumulty CEO Rapid Finance: 00:12:02

If you're a large company, you've got financial teams that are doing forecasts

ill Tumulty CEO Rapid Finance: 00:12:06

and figuring out, uh, what your capital needs are gonna be years in advance.

ill Tumulty CEO Rapid Finance: 00:12:10

Small business owners, uh, often have an opportunity that

ill Tumulty CEO Rapid Finance: 00:12:13

comes up with that for them.

ill Tumulty CEO Rapid Finance: 00:12:15

Um, I just landed a new contract and I have to hire more employees to

ill Tumulty CEO Rapid Finance: 00:12:19

execute on it, or I'm, uh, I've got a hot product and it's really selling,

ill Tumulty CEO Rapid Finance: 00:12:23

so I need to bribe more inventory.

ill Tumulty CEO Rapid Finance: 00:12:25

Um, and so that might come up on a Tuesday and they need funding by

ill Tumulty CEO Rapid Finance: 00:12:31

Thursday to get the wheels moving.

ill Tumulty CEO Rapid Finance: 00:12:32

Right?

ill Tumulty CEO Rapid Finance: 00:12:33

And so that's what we really focus on is that speed up

ill Tumulty CEO Rapid Finance: 00:12:37

front in the origination piece.

ill Tumulty CEO Rapid Finance: 00:12:39

Um, uh, on our book, uh, if we have a small business owner that gets a

ill Tumulty CEO Rapid Finance: 00:12:43

completed application to us, we have 80% of them uh, that are gonna get funded.

ill Tumulty CEO Rapid Finance: 00:12:48

They get funded within 24 hours.

ill Tumulty CEO Rapid Finance: 00:12:50

Um, the, the, the balance of the rest, it's usually not a

ill Tumulty CEO Rapid Finance: 00:12:53

day or two longer than that.

ill Tumulty CEO Rapid Finance: 00:12:54

Um, because that's what small business owners really need, right?

ill Tumulty CEO Rapid Finance: 00:12:57

They have these opportunities, they come up and they need to act quickly.

ill Tumulty CEO Rapid Finance: 00:13:01

Um, so our platform is designed to do that by automating, um, uh, all

ill Tumulty CEO Rapid Finance: 00:13:06

of the tasks that are associated with evaluating a small business application,

ill Tumulty CEO Rapid Finance: 00:13:12

um, from, uh, reading in information from paper statements of various types

ill Tumulty CEO Rapid Finance: 00:13:17

to gra gra grabbing accounting data straight outta their QuickBooks account.

ill Tumulty CEO Rapid Finance: 00:13:21

Um, running all this through models, doing fraud checks and things on the,

ill Tumulty CEO Rapid Finance: 00:13:26

on the front end and the back end.

ill Tumulty CEO Rapid Finance: 00:13:27

Um, interactive, uh, uh, evaluations, uh, with the small business owner

ill Tumulty CEO Rapid Finance: 00:13:34

trying to understand what their needs are, uh, and ultimately getting

ill Tumulty CEO Rapid Finance: 00:13:38

to a decision and funding quickly.

confidential: 00:13:41

Tedd Huff | Fintech Confidential:

: 00:13:42

with the Feds continuing to increase

tedd_huff___host__fintech_confidential:

: 00:13:44

interest rates and there's a lot of

tedd_huff___host__fintech_confidential:

: 00:13:46

tightening going on in these lending markets, in addition to the economy

tedd_huff___host__fintech_confidential:

: 00:13:50

slowing down just a little bit.

tedd_huff___host__fintech_confidential:

: 00:13:52

Uh, which by the way, I didn't really notice.

tedd_huff___host__fintech_confidential:

: 00:13:54

I was at the mall this weekend and it was busier than years

tedd_huff___host__fintech_confidential:

: 00:13:58

that I've seen in the past.

tedd_huff___host__fintech_confidential:

: 00:14:00

Um,

Tedd Huff | Fintech Confidential:

: 00:14:01

but tell me what do you see

tedd_huff___host__fintech_confidential:

: 00:14:05

as opportunities ahead for the lending

tedd_huff___host__fintech_confidential:

: 00:14:07

sector as, as we continue to see these, these tightening measures?

ill Tumulty CEO Rapid Finance: 00:14:15

Yeah.

ill Tumulty CEO Rapid Finance: 00:14:15

So Tedd, in the lending space, uh, as we look forward into next year, um, sort of

ill Tumulty CEO Rapid Finance: 00:14:23

with this backdrop of, uh, interest rates rising due to, uh, Fed, uh, actions, um,

ill Tumulty CEO Rapid Finance: 00:14:30

and tightening sort of across the board.

ill Tumulty CEO Rapid Finance: 00:14:33

Um, if you know where to look, there are always good small businesses

ill Tumulty CEO Rapid Finance: 00:14:37

that have a need for capital.

ill Tumulty CEO Rapid Finance: 00:14:39

Um, even in a time, uh, that was as rough on small businesses as during

ill Tumulty CEO Rapid Finance: 00:14:44

the, uh, early, uh, spring of 2020 when the pandemic was going on.

ill Tumulty CEO Rapid Finance: 00:14:49

Well, many small businesses were closed for health reasons and struggling.

ill Tumulty CEO Rapid Finance: 00:14:52

There was lots of small businesses in the online space and other

ill Tumulty CEO Rapid Finance: 00:14:56

spaces that were just booming.

ill Tumulty CEO Rapid Finance: 00:14:58

Uh, and so, uh, depending on what the situation is, um, there are

ill Tumulty CEO Rapid Finance: 00:15:03

always good small businesses that have a need for capital to grow.

ill Tumulty CEO Rapid Finance: 00:15:06

And so, um, that's what we look for, uh, because we wanna help

ill Tumulty CEO Rapid Finance: 00:15:10

those small businesses grow.

tedd_huff___host__fintech_confidential:

: 00:15:12

So what opportunity do you see

tedd_huff___host__fintech_confidential:

: 00:15:14

for, for the lending space?

tedd_huff___host__fintech_confidential:

: 00:15:16

I know we, we talked, you talked about there being good businesses out

tedd_huff___host__fintech_confidential:

: 00:15:20

there, but what are the opportunities for, for the lenders and the FinTechs

tedd_huff___host__fintech_confidential:

: 00:15:25

to really capitalize on that?

ill Tumulty CEO Rapid Finance: 00:15:29

So some of the opportunities unique

ill Tumulty CEO Rapid Finance: 00:15:31

to the FinTechs, uh, that we're expecting to come along in 2023, um,

ill Tumulty CEO Rapid Finance: 00:15:37

are a result of what banks are doing.

ill Tumulty CEO Rapid Finance: 00:15:40

Um, banks are, uh, particularly through SBA loans, uh, they are some of the

ill Tumulty CEO Rapid Finance: 00:15:44

largest lenders to small businesses.

ill Tumulty CEO Rapid Finance: 00:15:47

Um, but the banks are looking forward to 2023 and, uh, preparing their

ill Tumulty CEO Rapid Finance: 00:15:52

balance sheets for a recession, right?

ill Tumulty CEO Rapid Finance: 00:15:54

That means that they're tightening credits.

ill Tumulty CEO Rapid Finance: 00:15:56

Um, they're holding on to liquidity.

ill Tumulty CEO Rapid Finance: 00:15:58

Some of the challenges that banks are seeing are the deposit volumes

ill Tumulty CEO Rapid Finance: 00:16:02

are dropping as, uh, consumers and businesses are, uh, exhausting the

ill Tumulty CEO Rapid Finance: 00:16:07

last of the, the government driven pandemic era of funds, um, and also

ill Tumulty CEO Rapid Finance: 00:16:12

banks, um, uh, it's, it's likely that they may have to hold more capital

ill Tumulty CEO Rapid Finance: 00:16:17

due to some regulatory changes, right?

ill Tumulty CEO Rapid Finance: 00:16:19

What that means is that banks, uh, will be more selective about the small

ill Tumulty CEO Rapid Finance: 00:16:25

businesses that they will approve for various types of financing products.

ill Tumulty CEO Rapid Finance: 00:16:29

Um, and that creates an opportunity for others in the space to find

ill Tumulty CEO Rapid Finance: 00:16:33

those, uh, well positioned, uh, small businesses that are a good lending

ill Tumulty CEO Rapid Finance: 00:16:38

risk, uh, and to be able to serve them.

ill Tumulty CEO Rapid Finance: 00:16:40

Uh, right?

ill Tumulty CEO Rapid Finance: 00:16:41

And so one of the things that's interesting that we're seeing is we're

ill Tumulty CEO Rapid Finance: 00:16:45

seeing our lead volume increase at a time, uh, when the general sentiment

ill Tumulty CEO Rapid Finance: 00:16:50

is that everyone is tightening.

ill Tumulty CEO Rapid Finance: 00:16:51

Uh, and so we see that as a good sign for us to be able to pick and choose,

ill Tumulty CEO Rapid Finance: 00:16:55

uh, to put the assets on our balance sheet that are going to be the most

ill Tumulty CEO Rapid Finance: 00:16:59

resilient as we head into next year.

tedd_huff___host__fintech_confidential:

: 00:17:02

Can you share an example about

tedd_huff___host__fintech_confidential:

: 00:17:04

of how Rapid Finance is helping these companies you just mentioned

tedd_huff___host__fintech_confidential:

: 00:17:09

seize those opportunities?

ill Tumulty CEO Rapid Finance: 00:17:13

Yes.

ill Tumulty CEO Rapid Finance: 00:17:14

So, uh, in terms of the opportunities and where we can help, uh, a small

ill Tumulty CEO Rapid Finance: 00:17:19

business that, um, uh, that may not be able to be served by a bank.

ill Tumulty CEO Rapid Finance: 00:17:25

One of our longest sanding, uh, small business customers, uh, is a restaurant,

ill Tumulty CEO Rapid Finance: 00:17:31

uh, that is, uh, now in Castroville, California called Phil's Fish Market.

ill Tumulty CEO Rapid Finance: 00:17:35

Uh, Phil has been a, uh, we have been a financing partner

ill Tumulty CEO Rapid Finance: 00:17:38

for Phil for over 10 years now.

ill Tumulty CEO Rapid Finance: 00:17:40

Um, and as you can imagine, um, Phil's Fish Market is a seafood restaurant,

ill Tumulty CEO Rapid Finance: 00:17:45

uh, and many banks, uh, and other types of lenders are looking for

ill Tumulty CEO Rapid Finance: 00:17:50

assets that will back the, uh, act as collateral for backing their loan.

ill Tumulty CEO Rapid Finance: 00:17:55

Um, Phil being a seafood restaurant, he has a lot of collateral,

ill Tumulty CEO Rapid Finance: 00:17:58

uh, and during busy holiday seasons and other seasons, right?

ill Tumulty CEO Rapid Finance: 00:18:02

Um, he needs to stock up, but his collateral has a shelf life

ill Tumulty CEO Rapid Finance: 00:18:05

of a few days to a week, right?

ill Tumulty CEO Rapid Finance: 00:18:07

He's buying, uh, shrimp and lobster and all kinds of fish.

ill Tumulty CEO Rapid Finance: 00:18:12

And that's not the kind of asset that banks are often looking for, um, right?

ill Tumulty CEO Rapid Finance: 00:18:17

And so, but we can look at Phil's business being a very successful, um, restaurant.

ill Tumulty CEO Rapid Finance: 00:18:22

Uh, and we can evaluate the cash flow of that business.

ill Tumulty CEO Rapid Finance: 00:18:25

See how long, uh, Phil has been in business, what a

ill Tumulty CEO Rapid Finance: 00:18:28

great customer base he's got.

ill Tumulty CEO Rapid Finance: 00:18:30

Um, and, uh, be a long-term capital partner to Phil,

ill Tumulty CEO Rapid Finance: 00:18:34

um, when he has that need.

tedd_huff___host__fintech_confidential:

: 00:18:36

So it sounds like that is a prime

tedd_huff___host__fintech_confidential:

: 00:18:39

candidate for factoring merchant

Tedd Huff | Fintech Confidential:

: 00:18:43

cash advance type stuff.

tedd_huff___host__fintech_confidential:

: 00:18:46

Is that, is that a, a good assessment

tedd_huff___host__fintech_confidential:

: 00:18:48

of, of Phil's need in that case?

ill Tumulty CEO Rapid Finance: 00:18:53

So, uh, for Phil, we're mostly doing loans.

ill Tumulty CEO Rapid Finance: 00:18:56

Uh, you know, there are different businesses that, um,

ill Tumulty CEO Rapid Finance: 00:18:59

where, where different types of products can make sense.

ill Tumulty CEO Rapid Finance: 00:19:03

Um, in general, um, most small businesses could do with more than

ill Tumulty CEO Rapid Finance: 00:19:08

one type of financing product.

ill Tumulty CEO Rapid Finance: 00:19:10

They may have a commercial real estate loan on their place of business.

ill Tumulty CEO Rapid Finance: 00:19:16

Um, in addition, they may have a, uh, a working capital, uh, loan for

ill Tumulty CEO Rapid Finance: 00:19:22

a particular piece of equipment, like a pizza oven that they need,

ill Tumulty CEO Rapid Finance: 00:19:25

uh, that sits on those premises.

ill Tumulty CEO Rapid Finance: 00:19:27

And they may have a need for a line of credit for those, uh, inventory

ill Tumulty CEO Rapid Finance: 00:19:30

or other expenses that tend to vary through um, through business

ill Tumulty CEO Rapid Finance: 00:19:34

cycles, uh, throughout the year.

ill Tumulty CEO Rapid Finance: 00:19:36

So, um, it's really about, uh, helping the business owner, uh, first

ill Tumulty CEO Rapid Finance: 00:19:42

understanding their business, seeing what their need needs are, and helping

ill Tumulty CEO Rapid Finance: 00:19:45

that business owner figure out with what the right financing solution is

ill Tumulty CEO Rapid Finance: 00:19:48

for their particular need at the time.

tedd_huff___host__fintech_confidential:

: 00:19:52

So we talked about a bunch of different

tedd_huff___host__fintech_confidential:

: 00:19:54

products and a bunch of different needs.

tedd_huff___host__fintech_confidential:

: 00:19:57

For maybe a single small business.

tedd_huff___host__fintech_confidential:

: 00:20:00

And when you look at the overarching financial ecosystem, uh, services

tedd_huff___host__fintech_confidential:

: 00:20:04

ecosystem, it's really still severely disjointed, disconnected, um,

tedd_huff___host__fintech_confidential:

: 00:20:12

to how people really use, track, and try and grow their money.

tedd_huff___host__fintech_confidential:

: 00:20:18

How is Rapid Finance positioned to lead the SMB lending market to solve for that?

ill Tumulty CEO Rapid Finance: 00:20:26

Yeah, so Tedd, you know, when we think.

ill Tumulty CEO Rapid Finance: 00:20:30

Small business lending, uh, and the way that it has historically been done,

ill Tumulty CEO Rapid Finance: 00:20:35

um, a lot of it has gone through banks and it has been sort of an offshoot

ill Tumulty CEO Rapid Finance: 00:20:40

of the commercial lending side.

ill Tumulty CEO Rapid Finance: 00:20:42

And when you're doing commercial lending, you're probably doing loans

ill Tumulty CEO Rapid Finance: 00:20:45

with an average dollar amount of 2 or 3 million dollars, sometimes

ill Tumulty CEO Rapid Finance: 00:20:49

more if you're a really big bank.

ill Tumulty CEO Rapid Finance: 00:20:52

Um, and the process that you go through when you're lending that

ill Tumulty CEO Rapid Finance: 00:20:55

amount of money is very involved.

ill Tumulty CEO Rapid Finance: 00:20:57

Um, historically it's been very human, uh, driven, um, right?

ill Tumulty CEO Rapid Finance: 00:21:03

You might be putting people on airplanes to, you know, fly to other states and

ill Tumulty CEO Rapid Finance: 00:21:07

do inventory accounts and warehouses and things like that, because that's the kind

ill Tumulty CEO Rapid Finance: 00:21:11

of thing that makes sense when you're doing a 5 or 10 million dollar loan

ill Tumulty CEO Rapid Finance: 00:21:14

right?

ill Tumulty CEO Rapid Finance: 00:21:15

On the other side of the spectrum, you've got consumer lending.

ill Tumulty CEO Rapid Finance: 00:21:18

Uh, and over the last number of decades, consumer lending has become very

ill Tumulty CEO Rapid Finance: 00:21:22

efficient, uh, because right, you can go in, you can go online, somebody can

ill Tumulty CEO Rapid Finance: 00:21:27

fill out a form, you can pull credit bureau and other information, right?

ill Tumulty CEO Rapid Finance: 00:21:30

Run your fraud checks and say, yeah, this is a person who could qualify for a

ill Tumulty CEO Rapid Finance: 00:21:34

$10,000 credit card and approve them right there, and they can be spending that day.

ill Tumulty CEO Rapid Finance: 00:21:39

Small businesses fit in the middle.

ill Tumulty CEO Rapid Finance: 00:21:41

Um, they're not a perfect fit for the consumer side because they're more

ill Tumulty CEO Rapid Finance: 00:21:44

complicated and they're more varied.

ill Tumulty CEO Rapid Finance: 00:21:46

Um, but they don't have the same dollar amounts associated with them that

ill Tumulty CEO Rapid Finance: 00:21:52

commercial lending, uh, operations have.

ill Tumulty CEO Rapid Finance: 00:21:55

So what you really need to do to be, uh, efficient and fast in the small

ill Tumulty CEO Rapid Finance: 00:22:00

business space is be able to have a platform that allows you to sort of

ill Tumulty CEO Rapid Finance: 00:22:04

dial a lever, um, depending on what that small business looks like.

ill Tumulty CEO Rapid Finance: 00:22:09

Everywhere on the one end from, Hey, this looks like a sole prop,

ill Tumulty CEO Rapid Finance: 00:22:12

maybe it's an Uber driver, right?

ill Tumulty CEO Rapid Finance: 00:22:14

Um, it's something that looks very consumer-like, but I'm actually lending

ill Tumulty CEO Rapid Finance: 00:22:17

to a business entity, uh, and therefore there are some things that are different,

ill Tumulty CEO Rapid Finance: 00:22:21

but I can do a lot of that checking,

ill Tumulty CEO Rapid Finance: 00:22:24

um, and, um, p be fast and be like, touch.

ill Tumulty CEO Rapid Finance: 00:22:27

All the way to, I might be doing a small business loan for an

ill Tumulty CEO Rapid Finance: 00:22:31

established small business that maybe has multiple locations.

ill Tumulty CEO Rapid Finance: 00:22:36

Maybe it's somebody with, uh, you know, five or six McDonald franchises and they

ill Tumulty CEO Rapid Finance: 00:22:41

might have 50 or 60 employees, right?

ill Tumulty CEO Rapid Finance: 00:22:43

So a much larger, small business, and maybe that loan is a half a

ill Tumulty CEO Rapid Finance: 00:22:47

million or a million dollar loan.

ill Tumulty CEO Rapid Finance: 00:22:49

Um, Uh, and so there you'd wanna say, Hey, I can identify that loan,

ill Tumulty CEO Rapid Finance: 00:22:54

things specific about this small business, and I'm gonna let the

ill Tumulty CEO Rapid Finance: 00:22:58

machine do a bunch of automated parts.

ill Tumulty CEO Rapid Finance: 00:22:59

There's gonna be things in there that I wanna put human underwriters in the loop.

ill Tumulty CEO Rapid Finance: 00:23:03

And so the platform we've built, um, has rules and workflow engines that

ill Tumulty CEO Rapid Finance: 00:23:08

allow, um, based on characteristics of both the applicant, uh, and the product,

ill Tumulty CEO Rapid Finance: 00:23:14

uh, to have different workflows that involve, um, different elements of

ill Tumulty CEO Rapid Finance: 00:23:18

man and machine through the process.

tedd_huff___host__fintech_confidential:

: 00:23:22

Your platform leverages data and a

tedd_huff___host__fintech_confidential:

: 00:23:25

whole bunch of different tools from all over different parts of the ecosystem.

tedd_huff___host__fintech_confidential:

: 00:23:30

How can financial institutions and FinTechs use tools and data to

tedd_huff___host__fintech_confidential:

: 00:23:37

drive a better customer experience?

ill Tumulty CEO Rapid Finance: 00:23:41

Yeah.

ill Tumulty CEO Rapid Finance: 00:23:42

So Tedd, when it comes to customer experience, um, data can be super helpful.

ill Tumulty CEO Rapid Finance: 00:23:48

Uh, and it's really a matter of, um, making it as easy on the

ill Tumulty CEO Rapid Finance: 00:23:53

applicant as you possibly can.

ill Tumulty CEO Rapid Finance: 00:23:55

Um, that starts with every time that you either have data or can find

ill Tumulty CEO Rapid Finance: 00:24:00

data that you don't need somebody to type into a form, use that.

ill Tumulty CEO Rapid Finance: 00:24:04

Um, uh, where you can prefill forms, uh, because you have data, or a partner

ill Tumulty CEO Rapid Finance: 00:24:09

you're working with has data, um, ask people to, uh, you know, prefill it

ill Tumulty CEO Rapid Finance: 00:24:13

for them and ask them to validate it.

ill Tumulty CEO Rapid Finance: 00:24:14

Right?

ill Tumulty CEO Rapid Finance: 00:24:15

Um, sometimes things change.

ill Tumulty CEO Rapid Finance: 00:24:16

You want them to check that to make sure that it's right.

ill Tumulty CEO Rapid Finance: 00:24:18

Um, As you get the data, you want to constantly be having

ill Tumulty CEO Rapid Finance: 00:24:22

rule sets to evaluate that data.

ill Tumulty CEO Rapid Finance: 00:24:25

Um, right.

ill Tumulty CEO Rapid Finance: 00:24:26

So don't make somebody sit there and take a half hour or an hour filling out a long

ill Tumulty CEO Rapid Finance: 00:24:30

application only to say, oh, I'm sorry,

ill Tumulty CEO Rapid Finance: 00:24:32

the second thing that you put in here indicates that you're a business

ill Tumulty CEO Rapid Finance: 00:24:35

type that we can't make a loan to.

ill Tumulty CEO Rapid Finance: 00:24:37

Um, right?

ill Tumulty CEO Rapid Finance: 00:24:38

So, um, it's much better for an applicant, uh, if there's not going

ill Tumulty CEO Rapid Finance: 00:24:44

to be yet, if there's not going to be an affirmative answer and you know

ill Tumulty CEO Rapid Finance: 00:24:47

that, to get an, a quick no upfront.

ill Tumulty CEO Rapid Finance: 00:24:49

Um, then to do a whole bunch of work only to find out that, hey, this never

ill Tumulty CEO Rapid Finance: 00:24:53

could have happened for me anyway.

ill Tumulty CEO Rapid Finance: 00:24:55

Um, so it's really about the way you structure your process and your flows

ill Tumulty CEO Rapid Finance: 00:24:59

around, um, what you can help a small business owner with, uh, versus uh,

ill Tumulty CEO Rapid Finance: 00:25:05

you know, the amount of effort that they have to put in to get there.

tedd_huff___host__fintech_confidential:

: 00:25:09

So we've talked a lot about the

tedd_huff___host__fintech_confidential:

: 00:25:13

small business experience, but one of

Tedd Huff | Fintech Confidential:

: 00:25:17

the things that Rapid Finance

tedd_huff___host__fintech_confidential:

: 00:25:19

offers is the platform out to lenders,

tedd_huff___host__fintech_confidential:

: 00:25:25

uh, whether it be a traditional bank or an alternative lender.

tedd_huff___host__fintech_confidential:

: 00:25:30

But at the same time, you also offer the access to a lot of those groups

tedd_huff___host__fintech_confidential:

: 00:25:37

as well to other capital providers.

d Huff | Fintech Confidential: 00:25:40

When you look at the types of companies,

d Huff | Fintech Confidential: 00:25:44

that you are looking to partner with to expand that ecosystem what is,

d Huff | Fintech Confidential: 00:25:52

let's just start with first what's, what's the perfect or the ultimate

d Huff | Fintech Confidential: 00:25:57

customer from a technology perspective?

d Huff | Fintech Confidential: 00:25:59

And then we'll move over to the capital side.

ill Tumulty CEO Rapid Finance: 00:26:03

Sure Tedd.

ill Tumulty CEO Rapid Finance: 00:26:04

So as we think of, uh, the kind of enterprise partners that we would

ill Tumulty CEO Rapid Finance: 00:26:09

wanna work with in small business lending, um, really what we're

ill Tumulty CEO Rapid Finance: 00:26:14

looking to do is to bring lending as a service to that relationship.

ill Tumulty CEO Rapid Finance: 00:26:19

Um, now, uh, the one thing that I think all of those enterprise partners would

ill Tumulty CEO Rapid Finance: 00:26:23

have in common is they have a large base of small business customers that

ill Tumulty CEO Rapid Finance: 00:26:27

they want to be able to bring financial products to, specifically capital

ill Tumulty CEO Rapid Finance: 00:26:31

oriented products, um, uh, like loans or factoring or lines of credit and the like.

ill Tumulty CEO Rapid Finance: 00:26:37

Um, so what we are able to do is in that lending as a service model, we can do

ill Tumulty CEO Rapid Finance: 00:26:43

everything from, you've got a big pool of small business customers, um, but

ill Tumulty CEO Rapid Finance: 00:26:47

you're really not interested in doing the lending or you're not set up to do

ill Tumulty CEO Rapid Finance: 00:26:51

it from a regulatory standpoint and, uh, but you want to be able to bring

ill Tumulty CEO Rapid Finance: 00:26:55

this to your customers and participate, uh, in some joint value there.

ill Tumulty CEO Rapid Finance: 00:27:01

We can do all of it, right?

ill Tumulty CEO Rapid Finance: 00:27:02

So maybe, uh, in that example, the partner company is working

ill Tumulty CEO Rapid Finance: 00:27:07

with us on marketing campaigns.

ill Tumulty CEO Rapid Finance: 00:27:09

Um, but once we get responders, we're taking it from there through

ill Tumulty CEO Rapid Finance: 00:27:12

the acquisition, origination and servicing process and keeping those

ill Tumulty CEO Rapid Finance: 00:27:16

loans on our own balance sheet.

ill Tumulty CEO Rapid Finance: 00:27:18

Um, on the other end of the spectrum, there may be a partner that looks,

ill Tumulty CEO Rapid Finance: 00:27:23

uh, maybe like a bank, um, that already has the authority to lend.

ill Tumulty CEO Rapid Finance: 00:27:28

They have a balance sheet, so, uh, they have the capacity to do lending.

ill Tumulty CEO Rapid Finance: 00:27:33

Um, and they're a bank, so they make loans so they know how to lend.

ill Tumulty CEO Rapid Finance: 00:27:37

But maybe the thing that they need is they need a small business lending

ill Tumulty CEO Rapid Finance: 00:27:42

software platform that allows them greater speed, accuracy, and efficiency

ill Tumulty CEO Rapid Finance: 00:27:48

to, um, make the economics work and make the customer experience better

ill Tumulty CEO Rapid Finance: 00:27:52

for the small business customer.

ill Tumulty CEO Rapid Finance: 00:27:53

Right?

ill Tumulty CEO Rapid Finance: 00:27:54

So maybe all that partner needs is one or more elements of our software

ill Tumulty CEO Rapid Finance: 00:27:59

platform, or, um, they may want us to participate as a servicing partner

ill Tumulty CEO Rapid Finance: 00:28:04

in some pieces, for instance, um, Uh, inevitably when some of those small

ill Tumulty CEO Rapid Finance: 00:28:09

business loans write off, maybe they don't want to do the collections of

ill Tumulty CEO Rapid Finance: 00:28:13

recoveries work, in which case, uh, we could do that in the relationship as well.

tedd_huff___host__fintech_confidential:

: 00:28:17

That is really nice to hear.

tedd_huff___host__fintech_confidential:

: 00:28:21

One of the, the things that is interesting is I dove into Rapid Finance

tedd_huff___host__fintech_confidential:

: 00:28:27

is that it is so modular, it, it really allows you to plug in the pieces that.

tedd_huff___host__fintech_confidential:

: 00:28:34

that you need for how you are lending to your small business customers.

tedd_huff___host__fintech_confidential:

: 00:28:40

And I really appreciate, well, you going through all of this

tedd_huff___host__fintech_confidential:

: 00:28:43

stuff with us today, but I have a question that's a little, well less

tedd_huff___host__fintech_confidential:

: 00:28:50

FinTechy and more guidance focused.

tedd_huff___host__fintech_confidential:

: 00:28:53

Uh, you know, we, we have a lot of FinTech, FinTech startup founders

tedd_huff___host__fintech_confidential:

: 00:28:58

that listen and watch the show.

tedd_huff___host__fintech_confidential:

: 00:29:01

If you were to give those FinTech startup founders just that one

tedd_huff___host__fintech_confidential:

: 00:29:05

piece of advice on how to build a successful company, what would that be?

Will Tumulty CEO Rapid Finance:

: 00:29:13

Yeah, that's a great one, Tedd.

Will Tumulty CEO Rapid Finance:

: 00:29:15

So if you're gonna start a new FinTech company, um, what's the one

Will Tumulty CEO Rapid Finance:

: 00:29:20

thing where you should start out?

Will Tumulty CEO Rapid Finance:

: 00:29:24

Um, you know, I've been down this path a couple of times, uh, and some

Will Tumulty CEO Rapid Finance:

: 00:29:29

of them have worked out and frankly some of them have, uh, not worked out.

Will Tumulty CEO Rapid Finance:

: 00:29:33

Uh, and as I reflect on my own experiences as well as what I've seen over a

Will Tumulty CEO Rapid Finance:

: 00:29:38

couple of decades doing FinTech work.

Will Tumulty CEO Rapid Finance:

: 00:29:41

Um, the biggest thing that I think separates success, uh,

Will Tumulty CEO Rapid Finance:

: 00:29:46

from lack of success is those businesses that find demand, right?

Will Tumulty CEO Rapid Finance:

: 00:29:52

Where is there is demand for what you are providing in the market.

Will Tumulty CEO Rapid Finance:

: 00:29:57

Um, even if you don't have the business model right at first,

Will Tumulty CEO Rapid Finance:

: 00:30:00

you will figure it out over time.

Will Tumulty CEO Rapid Finance:

: 00:30:02

Uh right?.

Will Tumulty CEO Rapid Finance:

: 00:30:03

Uh, there will be a, uh, customers will seek you out, uh, and, uh, capital

Will Tumulty CEO Rapid Finance:

: 00:30:11

sources that you need to, to grow and expand your business will be available.

Will Tumulty CEO Rapid Finance:

: 00:30:15

Right?

Will Tumulty CEO Rapid Finance:

: 00:30:16

Um, there's lots where it's like, Hey, that's a really cool technology and we

Will Tumulty CEO Rapid Finance:

: 00:30:20

can go, we can go build that and right?

Will Tumulty CEO Rapid Finance:

: 00:30:22

Some of those companies get up and get going but uh, if they're not able

Will Tumulty CEO Rapid Finance:

: 00:30:27

to pivot into something where they find demand, uh, and are able to meet

Will Tumulty CEO Rapid Finance:

: 00:30:31

that demand, um, it's really tough to get a business off the ground.

Will Tumulty CEO Rapid Finance:

: 00:30:35

You know, there are certain entrepreneurs out there, uh, that,

Will Tumulty CEO Rapid Finance:

: 00:30:38

uh, in FinTech and other spaces, they got a nose for it, right?

Will Tumulty CEO Rapid Finance:

: 00:30:41

And they can find that demand they find what people want, they

Will Tumulty CEO Rapid Finance:

: 00:30:44

figure out how to make money later.

Will Tumulty CEO Rapid Finance:

: 00:30:47

Um, but, uh, demand, strong demand will, uh, will take you a long way.

tedd_huff___host__fintech_confidential:

: 00:30:53

So before we go, is there anything that

tedd_huff___host__fintech_confidential:

: 00:30:56

you wanted to make sure that the audience hears from you or from Rapid finance?

ill Tumulty CEO Rapid Finance: 00:31:04

Yeah.

ill Tumulty CEO Rapid Finance: 00:31:04

So Tedd, I'd say for your audience, uh, if you are a small, uh, uh, in the small

ill Tumulty CEO Rapid Finance: 00:31:10

business space out there as an, uh, entrepreneur or as a, uh, FinTech company

ill Tumulty CEO Rapid Finance: 00:31:17

that wants to serve the small business community, um, we're looking for partners.

ill Tumulty CEO Rapid Finance: 00:31:22

Um, we would love to hear from you if you are an enterprise, uh, scale customer

ill Tumulty CEO Rapid Finance: 00:31:27

out there that wants to bring capital

ill Tumulty CEO Rapid Finance: 00:31:29

to your small business customers or wants to learn how you could get into

ill Tumulty CEO Rapid Finance: 00:31:34

providing your own capital, uh, we would love to partner with you as well.

ill Tumulty CEO Rapid Finance: 00:31:38

So, um, uh, give us a shout, uh, and we can give you, uh, more

ill Tumulty CEO Rapid Finance: 00:31:42

details on we can do together.

tedd_huff___host__fintech_confidential:

: 00:31:44

So Will just so that everybody knows where

tedd_huff___host__fintech_confidential:

: 00:31:47

to go and look and connect, where's the best place to connect with you and where's

Tedd Huff | Fintech Confidential:

: 00:31:52

the best way to reach

tedd_huff___host__fintech_confidential:

: 00:31:53

out to the company to see if

tedd_huff___host__fintech_confidential:

: 00:31:55

that partnership makes sense?

ill Tumulty CEO Rapid Finance: 00:31:58

Yeah.

ill Tumulty CEO Rapid Finance: 00:31:58

So, um, you can find us online of course, at rapidfinance.com.

ill Tumulty CEO Rapid Finance: 00:32:02

Uh, you'll find that we have two segments that are out there.

ill Tumulty CEO Rapid Finance: 00:32:07

Um, we have our small business borrower segment, and then we

ill Tumulty CEO Rapid Finance: 00:32:10

have the rapid enterprise segment.

ill Tumulty CEO Rapid Finance: 00:32:12

So, uh, if you are an enterprise customer, you're gonna go, gonna wanna go look

ill Tumulty CEO Rapid Finance: 00:32:16

at the rapid enterprise side, where you can take a look at what we have to offer

ill Tumulty CEO Rapid Finance: 00:32:20

in software servicing and partnerships.

ill Tumulty CEO Rapid Finance: 00:32:23

Uh, and on the small business owner side, uh, we'd love to show you, uh, what we

ill Tumulty CEO Rapid Finance: 00:32:28

can help you with, uh, in terms of capital needs for your small business enterprise.

tedd_huff___host__fintech_confidential:

: 00:32:33

Fantastic.

tedd_huff___host__fintech_confidential:

: 00:32:34

So what I'm gonna do is I'm gonna put the links to this in the show notes as well

tedd_huff___host__fintech_confidential:

: 00:32:37

as down in the description for everybody to get a hold of the folks at Rapid

d Huff | Fintech Confidential: 00:32:43

Finance.

d Huff | Fintech Confidential: 00:32:44

Will, thank

tedd_huff___host__fintech_confidential:

: 00:32:45

you so much for your time today.

tedd_huff___host__fintech_confidential:

: 00:32:48

Uh, this has been amazing.

tedd_huff___host__fintech_confidential:

: 00:32:50

I love doing research on this.

tedd_huff___host__fintech_confidential:

: 00:32:51

I love having the conversation and I always learn

Tedd Huff | Fintech Confidential:

: 00:32:55

something new.

Will Tumulty CEO Rapid Finance:

: 00:32:57

Tedd, thanks so much for having me.

Will Tumulty CEO Rapid Finance:

: 00:32:59

It's been great to talk with you and uh, and with your audience.

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ill Tumulty CEO Rapid Finance: 00:34:20

Hey, Tedd it's great to be with you here today.

ill Tumulty CEO Rapid Finance: 00:34:51

Uh, you know, Tedd uh, I was interested coming outta grad school

ill Tumulty CEO Rapid Finance: 00:34:55

in manufacturing of all things.

ill Tumulty CEO Rapid Finance: 00:34:57

And, uh, one day walking across the quad I was tackled by a recruiter from

ill Tumulty CEO Rapid Finance: 00:35:02

Capital One who drug me over to a table, and then I found myself in banking.

ill Tumulty CEO Rapid Finance: 00:35:06

So, um, you know, after a few years of Capital One, uh, doing some telecom work

ill Tumulty CEO Rapid Finance: 00:35:11

in an ill-fated telecom venture that the company was after there, uh, I got

ill Tumulty CEO Rapid Finance: 00:35:16

onto other things, did some, uh, some debt buying, some collections, some.

ill Tumulty CEO Rapid Finance: 00:35:19

specialty Credit card work and actually started the first

ill Tumulty CEO Rapid Finance: 00:35:23

prepaid debit card program, uh, at Capital One, uh, many years ago.

ill Tumulty CEO Rapid Finance: 00:35:27

Uh, I was interested in that, uh, and as Capital One was looking to do

ill Tumulty CEO Rapid Finance: 00:35:31

other things in the, in the business that I was running for them, uh,

ill Tumulty CEO Rapid Finance: 00:35:34

myself and a couple guys on my team started a prepaid debit card company.

ill Tumulty CEO Rapid Finance: 00:35:37

And that's, uh, that's how it all got going.

ill Tumulty CEO Rapid Finance: 00:36:02

You know, I would say the military is a great place to start if that's your thing.

ill Tumulty CEO Rapid Finance: 00:36:07

When you are early in your career because you learned a bunch of stuff.

ill Tumulty CEO Rapid Finance: 00:36:10

Um, I was fortunate.

ill Tumulty CEO Rapid Finance: 00:36:12

In that, uh, I got to, um, uh, lead teams, uh, and be responsible for,

ill Tumulty CEO Rapid Finance: 00:36:20

uh, lots of equipment and other sort of mission critical items that had

ill Tumulty CEO Rapid Finance: 00:36:24

a pretty big dollar value attached to them very earlier in my career.

ill Tumulty CEO Rapid Finance: 00:36:27

Uh, and so I think that kind of leadership and management experience

ill Tumulty CEO Rapid Finance: 00:36:31

of people and equipment and dollars.

ill Tumulty CEO Rapid Finance: 00:36:35

Early on in your career is something that you get in the military, uh, that

ill Tumulty CEO Rapid Finance: 00:36:39

you don't get in many other places.

ill Tumulty CEO Rapid Finance: 00:36:40

And so, uh, that's been a, uh, a big leg up for me early in my management career.

ill Tumulty CEO Rapid Finance: 00:37:19

Yeah, exactly.

ill Tumulty CEO Rapid Finance: 00:37:20

Um, you know, I think particularly early on when you're, you know,

ill Tumulty CEO Rapid Finance: 00:37:24

whether you're 18 or 22, right?

ill Tumulty CEO Rapid Finance: 00:37:26

Y we don't have that, uh, career reference point, uh, right.

ill Tumulty CEO Rapid Finance: 00:37:31

So it's like, oh yeah, I'm responsible for 30 million dollar fighters jet right?

ill Tumulty CEO Rapid Finance: 00:37:35

And it's just, this is just what I do for work, right?

ill Tumulty CEO Rapid Finance: 00:37:38

We don't think about that.

ill Tumulty CEO Rapid Finance: 00:38:02

So, uh, you know, we grew the prepaid debit card company for a couple of years.

ill Tumulty CEO Rapid Finance: 00:38:06

Uh, we merged with, uh, another prepaid debit card company outta

ill Tumulty CEO Rapid Finance: 00:38:10

California called Account Now.

ill Tumulty CEO Rapid Finance: 00:38:12

Uh, I continued on with, uh, with account now and, uh, we continued to build

ill Tumulty CEO Rapid Finance: 00:38:17

that business up until, uh, until early 2015 where, uh, a bank called Green

ill Tumulty CEO Rapid Finance: 00:38:23

Dot, which is one of the big players, uh, in prepaid debit cards acquired.

ill Tumulty CEO Rapid Finance: 00:38:26

us Uh, and so, uh, a few months thereafter, as I was working on

ill Tumulty CEO Rapid Finance: 00:38:31

integration items, uh, the private equity guys, uh, who had invested in my debit

ill Tumulty CEO Rapid Finance: 00:38:37

card company gave me a call and, uh, asked if I wanted to come back to the East

ill Tumulty CEO Rapid Finance: 00:38:41

coast, come back to the lending side of things, and, uh, join the team at Rapid.

ill Tumulty CEO Rapid Finance: 00:39:05

Tedd You know, as I think about, uh, our mission here at Rapid Finance, it's really

ill Tumulty CEO Rapid Finance: 00:39:10

to help small businesses grow and prosper.

ill Tumulty CEO Rapid Finance: 00:39:14

Uh, and small businesses need capital to be able.

ill Tumulty CEO Rapid Finance: 00:39:17

To do that.

ill Tumulty CEO Rapid Finance: 00:39:18

Some small businesses, uh, based on the type of business or maybe

ill Tumulty CEO Rapid Finance: 00:39:21

the stage, uh, of the business, uh, that they're in, um, can access all

ill Tumulty CEO Rapid Finance: 00:39:26

kinds of different forms of capital.

ill Tumulty CEO Rapid Finance: 00:39:28

Um, they may get an SBA loan of various types.

ill Tumulty CEO Rapid Finance: 00:39:32

Uh, the United States Department of Agriculture actually has a very big, uh,

ill Tumulty CEO Rapid Finance: 00:39:36

rural small business lending program.

ill Tumulty CEO Rapid Finance: 00:39:39

Um, but then there are other times where.

ill Tumulty CEO Rapid Finance: 00:39:42

Uh, those products are either unavailable or they're not the right financing product

ill Tumulty CEO Rapid Finance: 00:39:47

that the small business needs at the time.

ill Tumulty CEO Rapid Finance: 00:39:49

Um, and so we provide, uh, those sorts of products on our own balance sheet.

ill Tumulty CEO Rapid Finance: 00:39:54

We also work with probably 50 or 60 other small business financing

ill Tumulty CEO Rapid Finance: 00:39:58

companies, uh, to help the small business owner first figure out what

ill Tumulty CEO Rapid Finance: 00:40:03

the right type of financing is for their particular business need at the time.

ill Tumulty CEO Rapid Finance: 00:40:06

Uh, and second, help them secure that financing Yeah, so some of those

ill Tumulty CEO Rapid Finance: 00:40:34

loans we offer on our own balance.

ill Tumulty CEO Rapid Finance: 00:40:36

sheet Uh, and some of those financing products we do through

ill Tumulty CEO Rapid Finance: 00:40:39

partnerships with others.

ill Tumulty CEO Rapid Finance: 00:40:41

Um, we are not an SBA lender, so uh, we can help small businesses find an SBA

ill Tumulty CEO Rapid Finance: 00:40:46

loan, if that's what they're looking for through some SBA lending partners of ours.

ill Tumulty CEO Rapid Finance: 00:40:51

Um, you know, A small business may or may not qualify for an SBA loan.

ill Tumulty CEO Rapid Finance: 00:40:57

Uh, depending on what type of business they are, what stage of

ill Tumulty CEO Rapid Finance: 00:41:01

growth they're in, um, uh, and other things about their business.

ill Tumulty CEO Rapid Finance: 00:41:06

So many small business owners may start by thinking, Hey, um, what I

ill Tumulty CEO Rapid Finance: 00:41:10

need or what I want is an SBA loan.

ill Tumulty CEO Rapid Finance: 00:41:13

Um, but, uh, they, that may not actually be the right choice.

ill Tumulty CEO Rapid Finance: 00:41:18

for Yeah.

ill Tumulty CEO Rapid Finance: 00:41:36

So while we are, uh, a lender ourselves, um, we are also making elements of

ill Tumulty CEO Rapid Finance: 00:41:42

our technology platform available to others who are either lenders

ill Tumulty CEO Rapid Finance: 00:41:47

themselves to small businesses.

ill Tumulty CEO Rapid Finance: 00:41:49

Or want to become lenders to small businesses.

ill Tumulty CEO Rapid Finance: 00:41:52

Fundamentally, when you wanna be a lender to a small business, um,

ill Tumulty CEO Rapid Finance: 00:41:57

even if you have experience on the consumer side, you need to think

ill Tumulty CEO Rapid Finance: 00:42:00

about it a little bit differently.

ill Tumulty CEO Rapid Finance: 00:42:02

Um, the main difference is when you're doing commercial lending,

ill Tumulty CEO Rapid Finance: 00:42:06

your borrower is not a person your borrower is, as is a business entity

ill Tumulty CEO Rapid Finance: 00:42:10

that may be owned by one person, or it may be owned by several people.

ill Tumulty CEO Rapid Finance: 00:42:15

. And so you wind up having this one to many relationship, uh, of business

ill Tumulty CEO Rapid Finance: 00:42:20

owners to businesses that you have to take into account when you're

ill Tumulty CEO Rapid Finance: 00:42:24

doing your credit modeling and your underwriting for a small business loan.

ill Tumulty CEO Rapid Finance: 00:42:29

And so we offer software platforms, uh, to enable companies to do just that.

d Huff | Fintech Confidential: 00:42:35

Give

ill Tumulty CEO Rapid Finance: 00:42:57

Sure Tedd So, um, the platform, uh, covers

ill Tumulty CEO Rapid Finance: 00:43:01

everything that is needed, uh, in order to, uh, originate, uh, service,

ill Tumulty CEO Rapid Finance: 00:43:07

uh, and ultimately collect on if necessary, a small business loan asset.

ill Tumulty CEO Rapid Finance: 00:43:12

Um, when we think of the, uh, the value chain for small business lending, it's

ill Tumulty CEO Rapid Finance: 00:43:18

a fairly simple three-step process.

ill Tumulty CEO Rapid Finance: 00:43:21

First, I'm.

ill Tumulty CEO Rapid Finance: 00:43:21

aquiring Uh, and there I'm getting lead, a small business owner who is interested

ill Tumulty CEO Rapid Finance: 00:43:26

in financing for their business.

ill Tumulty CEO Rapid Finance: 00:43:27

The second thing I'm doing is I'm doing origination, which is I'm seeing

ill Tumulty CEO Rapid Finance: 00:43:31

what kind of loan, what dollar amount, and what terms they could qualify

ill Tumulty CEO Rapid Finance: 00:43:35

for, and I'm creating a number of quotes that they can select from.

ill Tumulty CEO Rapid Finance: 00:43:39

Um, then after they accept one of those quotes, it moves on to

ill Tumulty CEO Rapid Finance: 00:43:43

servicing where I'm doing the regular collections or perhaps recoveries, if

ill Tumulty CEO Rapid Finance: 00:43:47

that becomes necessary down the road.

ill Tumulty CEO Rapid Finance: 00:43:49

Um, and so we have elements of our platform that can

ill Tumulty CEO Rapid Finance: 00:43:52

do do all of those parts.

ill Tumulty CEO Rapid Finance: 00:43:54

Um, we can take on the origination by standing up, uh, an online web

ill Tumulty CEO Rapid Finance: 00:43:58

form, or we can have some of our, uh, business advisors that would

ill Tumulty CEO Rapid Finance: 00:44:02

interact over the telephone with the.

ill Tumulty CEO Rapid Finance: 00:44:03

customers Um, we move on to the origination portion, uh, which does

ill Tumulty CEO Rapid Finance: 00:44:08

a whole bunch of data aggregation and enhancement, um, to run credit models

ill Tumulty CEO Rapid Finance: 00:44:12

and evaluate the credit worthiness, the dollar amount, the term, uh, and

ill Tumulty CEO Rapid Finance: 00:44:17

the rate, uh, that will be associated for various financing products.

ill Tumulty CEO Rapid Finance: 00:44:21

Um, then, uh, it will go to underwriting.

ill Tumulty CEO Rapid Finance: 00:44:24

Uh, where If necessary, an underwriter could dig deeper or we

ill Tumulty CEO Rapid Finance: 00:44:29

can run the machine-driven rules, uh, to help the underwriters to

ill Tumulty CEO Rapid Finance: 00:44:33

determine whether this is a, a loan that should be, uh, funded or not.

ill Tumulty CEO Rapid Finance: 00:44:37

Then from funding, it goes on to the servicing platform.

ill Tumulty CEO Rapid Finance: 00:44:40

Uh, and on the servicing side, we're doing all the functions of, uh, uh, customer

ill Tumulty CEO Rapid Finance: 00:44:46

service, uh, collections and working with customers if they're run into a problem.

ill Tumulty CEO Rapid Finance: 00:44:49

Uh, and then ultimately if things write off, uh, the recoveries,

ill Tumulty CEO Rapid Finance: 00:44:53

part

d Huff | Fintech Confidential: 00:45:19

say

ill Tumulty CEO Rapid Finance: 00:45:20

Yeah.

ill Tumulty CEO Rapid Finance: 00:45:21

So Tedd when we think about the speed, uh, that small businesses

ill Tumulty CEO Rapid Finance: 00:45:26

have a need for capital, um, it's a different sort of thing than if

ill Tumulty CEO Rapid Finance: 00:45:30

you're a really large company, right?

ill Tumulty CEO Rapid Finance: 00:45:31

If you're a large company, you've got financial teams that are.

ill Tumulty CEO Rapid Finance: 00:45:34

Doing forecasts and figuring out, uh, what your capital needs

ill Tumulty CEO Rapid Finance: 00:45:38

are gonna be years in advance.

ill Tumulty CEO Rapid Finance: 00:45:39

Small business owners, uh, often have an opportunity that

ill Tumulty CEO Rapid Finance: 00:45:43

comes up with that for them.

ill Tumulty CEO Rapid Finance: 00:45:44

Um, I just landed a new contract and I have to hire more employees to

ill Tumulty CEO Rapid Finance: 00:45:48

execute on it, or I'm, uh, I've got a hot product and it's really selling,

ill Tumulty CEO Rapid Finance: 00:45:52

so I need to bribe more inventory.

ill Tumulty CEO Rapid Finance: 00:45:55

Um, and.

ill Tumulty CEO Rapid Finance: 00:45:56

so That might come up on a Tuesday and they need funding by

ill Tumulty CEO Rapid Finance: 00:46:00

Thursday to get the wheels moving.

ill Tumulty CEO Rapid Finance: 00:46:02

Right?

ill Tumulty CEO Rapid Finance: 00:46:03

And so that's what we really focus on is that speed up

ill Tumulty CEO Rapid Finance: 00:46:06

front in the origination piece.

ill Tumulty CEO Rapid Finance: 00:46:08

Um, uh, on our book, uh, if we have a small business owner that gets a completed

ill Tumulty CEO Rapid Finance: 00:46:13

application to us, we have 80% of them.

ill Tumulty CEO Rapid Finance: 00:46:16

Uh, that are gonna get funded.

ill Tumulty CEO Rapid Finance: 00:46:17

They get funded within 24 hours.

ill Tumulty CEO Rapid Finance: 00:46:19

Um, the, the, the balance of the rest, it's usually not a

ill Tumulty CEO Rapid Finance: 00:46:22

day or two longer than that.

ill Tumulty CEO Rapid Finance: 00:46:24

Um, because that's what small business owners really need, right?

ill Tumulty CEO Rapid Finance: 00:46:27

They have these opportunities, they come up and they need to act quickly.

ill Tumulty CEO Rapid Finance: 00:46:30

Um, so our platform is designed to do that by automating, um, uh, all

ill Tumulty CEO Rapid Finance: 00:46:36

of the tasks that are associated.

ill Tumulty CEO Rapid Finance: 00:46:38

with Evaluating a small business application, um, from, uh, reading

ill Tumulty CEO Rapid Finance: 00:46:43

in information from paper statements of various types to gra gra

ill Tumulty CEO Rapid Finance: 00:46:48

grabbing accounting data straight outta their QuickBooks account.

ill Tumulty CEO Rapid Finance: 00:46:51

Um, running all this through models, doing fraud checks and things on the,

ill Tumulty CEO Rapid Finance: 00:46:55

on the front end and the back end.

ill Tumulty CEO Rapid Finance: 00:46:57

Um, Interactive, uh, uh, evaluations, uh, with the small business owner

ill Tumulty CEO Rapid Finance: 00:47:04

trying to understand what their needs are, uh, and ultimately getting

ill Tumulty CEO Rapid Finance: 00:47:08

to a decision and funding quickly.

ill Tumulty CEO Rapid Finance: 00:47:45

Yeah.

ill Tumulty CEO Rapid Finance: 00:47:45

So Tedd in the lending space, uh, as we look forward into next year, um, sort of

ill Tumulty CEO Rapid Finance: 00:47:52

with this backdrop of, uh, interest rates rising due to, uh, fed, uh, actions, um,

ill Tumulty CEO Rapid Finance: 00:47:59

And tightening sort of across the board.

ill Tumulty CEO Rapid Finance: 00:48:02

Um, if you know where to look, there are always good small businesses

ill Tumulty CEO Rapid Finance: 00:48:07

that have a need for capital.

ill Tumulty CEO Rapid Finance: 00:48:09

Um, even in a time, uh, that was as rough on small businesses as during

ill Tumulty CEO Rapid Finance: 00:48:14

the, uh, early, uh, spring of 2020 when the pandemic was going on.

ill Tumulty CEO Rapid Finance: 00:48:18

Well, many small businesses were closed for health reasons and struggling.

ill Tumulty CEO Rapid Finance: 00:48:22

There was lots of small businesses in the online space

ill Tumulty CEO Rapid Finance: 00:48:25

and other spaces that were just.

ill Tumulty CEO Rapid Finance: 00:48:26

booming Uh, and so, uh, depending on what the situation is, um, there are

ill Tumulty CEO Rapid Finance: 00:48:32

always good small businesses that have a need for capital to grow.

ill Tumulty CEO Rapid Finance: 00:48:36

And so, um, that's what we look for, uh, because we wanna help

ill Tumulty CEO Rapid Finance: 00:48:40

those small businesses grow.

ill Tumulty CEO Rapid Finance: 00:48:59

So some of the opportunities unique to the fintechs, uh, that we're

ill Tumulty CEO Rapid Finance: 00:49:03

expecting to come along in 2023, um, are a result of what banks are doing.

ill Tumulty CEO Rapid Finance: 00:49:09

Um, banks are, uh, particularly through SBA loans, uh, they are some of the

ill Tumulty CEO Rapid Finance: 00:49:14

largest lenders to small businesses.

ill Tumulty CEO Rapid Finance: 00:49:16

Um, but the banks are looking forward to 2023 and, uh, preparing their

ill Tumulty CEO Rapid Finance: 00:49:22

balance sheets for a recession, right?

ill Tumulty CEO Rapid Finance: 00:49:23

That means that they're tightening.

ill Tumulty CEO Rapid Finance: 00:49:25

credits Um, they're holding on to liquidity.

ill Tumulty CEO Rapid Finance: 00:49:28

Some of the challenges that banks are seeing are the deposit volumes

ill Tumulty CEO Rapid Finance: 00:49:31

are dropping as, uh, consumers and businesses are, uh, exhausting.

ill Tumulty CEO Rapid Finance: 00:49:36

The last of the, the government driven pandemic era of funds, um, and also

ill Tumulty CEO Rapid Finance: 00:49:41

banks, um, uh, it's, it's likely that they may have to hold more capital

ill Tumulty CEO Rapid Finance: 00:49:46

due to some regulatory changes, right?

ill Tumulty CEO Rapid Finance: 00:49:49

What that means is that banks, uh, will be more selective About the small

ill Tumulty CEO Rapid Finance: 00:49:54

businesses that they will approve for various types of financing products.

ill Tumulty CEO Rapid Finance: 00:49:58

Um, and that creates an opportunity for others in the space to find

ill Tumulty CEO Rapid Finance: 00:50:02

those, uh, well positioned, uh, small businesses that are a good lending

ill Tumulty CEO Rapid Finance: 00:50:08

risk, uh, and to be able to serve them.

ill Tumulty CEO Rapid Finance: 00:50:10

Uh, right.

ill Tumulty CEO Rapid Finance: 00:50:11

And so one of the things that's interesting that we're seeing is we're

ill Tumulty CEO Rapid Finance: 00:50:15

seeing our lead volume increase at a time, uh, when the general sentiment

ill Tumulty CEO Rapid Finance: 00:50:19

is that everyone is tightening.

ill Tumulty CEO Rapid Finance: 00:50:21

Uh, and so we see that as a good sign for us to be able to pick and

ill Tumulty CEO Rapid Finance: 00:50:24

choose, uh, to put the assets on our balance sheet that are going to be the

ill Tumulty CEO Rapid Finance: 00:50:29

most resilient as we head into next.

ill Tumulty CEO Rapid Finance: 00:50:30

year Yes.

ill Tumulty CEO Rapid Finance: 00:50:43

So, uh, in terms of the opportunities and where we can help, uh, a small

ill Tumulty CEO Rapid Finance: 00:50:48

business that, um, uh, That may not be able to be served by a bank.

ill Tumulty CEO Rapid Finance: 00:50:54

One of our longest sanding, uh, small business customers, uh, is a restaurant,

ill Tumulty CEO Rapid Finance: 00:51:00

uh, that is, uh, now in Castroville, California called Phil's Fish Market.

ill Tumulty CEO Rapid Finance: 00:51:04

Uh, Phil has been a, uh, we have been a financing partner

ill Tumulty CEO Rapid Finance: 00:51:08

for Phil for over 10 years now.

ill Tumulty CEO Rapid Finance: 00:51:10

Um, and as you can imagine, um, Phil's fish market is a seafood restaurant

ill Tumulty CEO Rapid Finance: 00:51:15

Uh, and many banks, uh, and other types of lenders are looking for

ill Tumulty CEO Rapid Finance: 00:51:19

assets that will back the, uh, act as collateral for backing their loan.

ill Tumulty CEO Rapid Finance: 00:51:24

Um, Phil being a seafood restaurant, he has a lot of collateral,

ill Tumulty CEO Rapid Finance: 00:51:28

uh, and during busy holiday seasons and other seasons, right?

ill Tumulty CEO Rapid Finance: 00:51:31

Um, he needs to stock up, but his collateral has a shelf life

ill Tumulty CEO Rapid Finance: 00:51:35

of a few days to a week, right?

ill Tumulty CEO Rapid Finance: 00:51:37

He's buying, uh, shrimp And lobster and all kinds of fish.

ill Tumulty CEO Rapid Finance: 00:51:42

And that's not the kind of asset that banks are often looking for.

ill Tumulty CEO Rapid Finance: 00:51:45

Um, right.

ill Tumulty CEO Rapid Finance: 00:51:46

And so, but we can look at Phil's business being a very successful, um, restaurant.

ill Tumulty CEO Rapid Finance: 00:51:52

Uh, and we can evaluate the cash flow of that business.

ill Tumulty CEO Rapid Finance: 00:51:54

See how long, uh, Phil has been in business, what a

ill Tumulty CEO Rapid Finance: 00:51:57

great customer base he's got.

ill Tumulty CEO Rapid Finance: 00:52:00

Um, and, uh, be a long-term capital partner to Phil um, when he has.

ill Tumulty CEO Rapid Finance: 00:52:05

that need So, uh, for Phil, we're mostly doing loans.

ill Tumulty CEO Rapid Finance: 00:52:26

Uh, you know, there are different businesses that, um,

ill Tumulty CEO Rapid Finance: 00:52:29

where, where different types of products can make sense.

ill Tumulty CEO Rapid Finance: 00:52:33

Um, in general, um, Most small businesses could do with more than

ill Tumulty CEO Rapid Finance: 00:52:38

one type of financing product.

ill Tumulty CEO Rapid Finance: 00:52:40

They may have a commercial real estate loan on their place of business.

ill Tumulty CEO Rapid Finance: 00:52:46

Um, in addition, they may have a, uh, a working capital, uh, loan for

ill Tumulty CEO Rapid Finance: 00:52:51

a particular piece of equipment, like a pizza oven that they need,

ill Tumulty CEO Rapid Finance: 00:52:54

uh, that sits on those premises.

ill Tumulty CEO Rapid Finance: 00:52:56

And they may have a need for a line of credit for those, uh, inventory or other

ill Tumulty CEO Rapid Finance: 00:53:00

expenses that tend to vary through.

ill Tumulty CEO Rapid Finance: 00:53:02

um Through business cycles, uh, throughout the year.

ill Tumulty CEO Rapid Finance: 00:53:06

So, um, it's really about, uh, helping the business owner, uh, first

ill Tumulty CEO Rapid Finance: 00:53:11

understanding their business, seeing what their need needs are, and helping

ill Tumulty CEO Rapid Finance: 00:53:14

that business owner figure out with what the right financing solution is

ill Tumulty CEO Rapid Finance: 00:53:18

for their particular need at the time.

ill Tumulty CEO Rapid Finance: 00:53:56

Yeah, so Tedd you know, when we think.

ill Tumulty CEO Rapid Finance: 00:53:59

Small business lending.

ill Tumulty CEO Rapid Finance: 00:54:01

Uh, and the way that it has historically been done, um, a lot of it has gone

ill Tumulty CEO Rapid Finance: 00:54:06

through banks and it has been sort of an offshoot of the commercial lending side.

ill Tumulty CEO Rapid Finance: 00:54:12

And when you're doing commercial lending, you're probably doing loans with an.

ill Tumulty CEO Rapid Finance: 00:54:16

Average dollar amount of 2 or 3 million, dollars sometimes more

ill Tumulty CEO Rapid Finance: 00:54:19

if you're a really big bank.

ill Tumulty CEO Rapid Finance: 00:54:21

Um, and the process that you go through when you're lending that

ill Tumulty CEO Rapid Finance: 00:54:24

amount of money is very involved.

ill Tumulty CEO Rapid Finance: 00:54:27

Um, historically it's been very human, uh, driven, um, right.

ill Tumulty CEO Rapid Finance: 00:54:32

You might be putting people on airplanes to, you know, fly to other states and

ill Tumulty CEO Rapid Finance: 00:54:36

do inventory accounts and warehouses and things like that, because that's

ill Tumulty CEO Rapid Finance: 00:54:40

the kind of thing that makes sense when you're doing a 5 or $10 million.

ill Tumulty CEO Rapid Finance: 00:54:43

dollar loan Right.

ill Tumulty CEO Rapid Finance: 00:54:44

On the other side of the spectrum, you've got consumer lending.

ill Tumulty CEO Rapid Finance: 00:54:48

Uh, and over the last number of decades, consumer lending has become very

ill Tumulty CEO Rapid Finance: 00:54:52

efficient, uh, because right, you can go in, you can go online, somebody can

ill Tumulty CEO Rapid Finance: 00:54:56

fill out a form, you can pull credit bureau and other information, right?

ill Tumulty CEO Rapid Finance: 00:55:00

Run your fraud checks and say, yeah, this is a person who could qualify for a

ill Tumulty CEO Rapid Finance: 00:55:04

$10,000 credit card and approve them right there, and they can be spending that.

ill Tumulty CEO Rapid Finance: 00:55:08

day Small businesses fit in the middle.

ill Tumulty CEO Rapid Finance: 00:55:11

Um, they're not a perfect fit for the consumer side because they're more

ill Tumulty CEO Rapid Finance: 00:55:14

complicated and they're more varied.

ill Tumulty CEO Rapid Finance: 00:55:16

Um, but they don't have the same dollar amounts associated with them that

ill Tumulty CEO Rapid Finance: 00:55:21

commercial lending, uh, operations have.

ill Tumulty CEO Rapid Finance: 00:55:24

So what you really need to do to be, uh, efficient and fast in the

ill Tumulty CEO Rapid Finance: 00:55:29

small business space is be able to have a platform that allows you to.

ill Tumulty CEO Rapid Finance: 00:55:33

sort of Dial a lever, um, depending on what that small business looks

ill Tumulty CEO Rapid Finance: 00:55:38

like everywhere on the one end from, Hey, this looks like a sole prop,

ill Tumulty CEO Rapid Finance: 00:55:42

maybe it's an Uber driver, right?

ill Tumulty CEO Rapid Finance: 00:55:43

Um, it's something that looks very consumer-like, but I'm actually

ill Tumulty CEO Rapid Finance: 00:55:47

lending to a business entity.

ill Tumulty CEO Rapid Finance: 00:55:48

Uh, and therefore there are some things that are different, but

ill Tumulty CEO Rapid Finance: 00:55:51

I can do a lot of that checking.

ill Tumulty CEO Rapid Finance: 00:55:53

Um, and, um, p be fast and be like, touch all the way to, I might be

ill Tumulty CEO Rapid Finance: 00:55:58

doing a small business loan for an established small business.

ill Tumulty CEO Rapid Finance: 00:56:03

That maybe has multiple locations.

ill Tumulty CEO Rapid Finance: 00:56:05

Maybe it's somebody with, uh, you know, five or six McDonald franchises and they

ill Tumulty CEO Rapid Finance: 00:56:11

might have 50 or 60 employees, right?

ill Tumulty CEO Rapid Finance: 00:56:13

So a much larger, small business, and maybe that loan is a half a

ill Tumulty CEO Rapid Finance: 00:56:17

million or a million dollar loan.

ill Tumulty CEO Rapid Finance: 00:56:19

Um, Uh, and so there you'd wanna say, Hey, I can identify that loan

ill Tumulty CEO Rapid Finance: 00:56:24

things specific about this small business, and I'm gonna let the

ill Tumulty CEO Rapid Finance: 00:56:27

machine do a bunch of automated parts.

ill Tumulty CEO Rapid Finance: 00:56:29

There's gonna be things in there that I wanna put human underwriters in the loop.

ill Tumulty CEO Rapid Finance: 00:56:33

And so the platform we've built, um, has rules and workflow engines that

ill Tumulty CEO Rapid Finance: 00:56:38

allow, um, based on characteristics of both the applicant, uh, and the product,

ill Tumulty CEO Rapid Finance: 00:56:44

uh, to have different workflows that involve, um, different elements of

ill Tumulty CEO Rapid Finance: 00:56:48

man and machine through the process.

ill Tumulty CEO Rapid Finance: 00:57:11

Yeah.

ill Tumulty CEO Rapid Finance: 00:57:11

So Tedd when it comes to customer experience, um, data can be super helpful.

ill Tumulty CEO Rapid Finance: 00:57:17

Uh, and it's really a matter of, um, making it as easy on the

ill Tumulty CEO Rapid Finance: 00:57:23

applicant as you possibly can.

ill Tumulty CEO Rapid Finance: 00:57:25

Um, that starts with every time that you either have data or can

ill Tumulty CEO Rapid Finance: 00:57:29

find data that you don't need somebody to type into a form use.

ill Tumulty CEO Rapid Finance: 00:57:33

that Um, uh, where you can prefill forms, uh, because you have data, or a partner

ill Tumulty CEO Rapid Finance: 00:57:38

you're working with has data, um, ask people to, uh, you know, prefill it

ill Tumulty CEO Rapid Finance: 00:57:43

for them and ask them to validate it.

ill Tumulty CEO Rapid Finance: 00:57:44

Right?

ill Tumulty CEO Rapid Finance: 00:57:44

Um, sometimes things change.

ill Tumulty CEO Rapid Finance: 00:57:46

You want them to check that to make sure that it's right.

ill Tumulty CEO Rapid Finance: 00:57:48

Um, As you get the data, you want to constantly be having

ill Tumulty CEO Rapid Finance: 00:57:52

rule sets to evaluate that data.

ill Tumulty CEO Rapid Finance: 00:57:55

Um, right.

ill Tumulty CEO Rapid Finance: 00:57:55

So don't make somebody sit there and take a half hour or an hour filling out a long

ill Tumulty CEO Rapid Finance: 00:57:59

application only to say, oh, I'm sorry.

ill Tumulty CEO Rapid Finance: 00:58:02

The second thing that you put in here indicates that you're a business

ill Tumulty CEO Rapid Finance: 00:58:05

type that we can't make a loan to.

ill Tumulty CEO Rapid Finance: 00:58:07

Um, right.

ill Tumulty CEO Rapid Finance: 00:58:07

So, um, it's much better for an applicant, uh, if there's not

ill Tumulty CEO Rapid Finance: 00:58:13

going to be yet, if there's not going to be an affirmative answer.

ill Tumulty CEO Rapid Finance: 00:58:16

And you know that to get an, a quick no.

ill Tumulty CEO Rapid Finance: 00:58:18

upfront Um, then to do a whole bunch of work only to find out that, hey, this

ill Tumulty CEO Rapid Finance: 00:58:23

never could have happened for me anyway.

ill Tumulty CEO Rapid Finance: 00:58:25

Um, so it's really about the way you structure your process and your flows

ill Tumulty CEO Rapid Finance: 00:58:29

around, um, what you can help a small business owner with, uh, versus uh,

ill Tumulty CEO Rapid Finance: 00:58:35

you know, the amount of effort that they have to put in to get there.

ill Tumulty CEO Rapid Finance: 00:59:33

Sure Tedd So as we think of, uh, the kind of enterprise partners that

ill Tumulty CEO Rapid Finance: 00:59:38

we would wanna work with in small business lending, um, really what

ill Tumulty CEO Rapid Finance: 00:59:43

we're looking to do is to bring lending as a service to that relationship.

ill Tumulty CEO Rapid Finance: 00:59:48

Um, now, uh, the one thing that I think all of those enterprise partners would

ill Tumulty CEO Rapid Finance: 00:59:53

have in common is they have a large base of small business customers that

ill Tumulty CEO Rapid Finance: 00:59:57

they want to be able to bring financial products to, specifically capital

ill Tumulty CEO Rapid Finance: 01:00:01

oriented products, um, uh, like loans or factoring or lines of credit and the like.

ill Tumulty CEO Rapid Finance: 01:00:07

Um, so what we are able to do is in that lending as a service model, we

ill Tumulty CEO Rapid Finance: 01:00:12

can do everything from, you've got a big pool of small business customers,

ill Tumulty CEO Rapid Finance: 01:00:16

um, but you're really not interested in doing the lending or you're not set up

ill Tumulty CEO Rapid Finance: 01:00:21

to do it from a regulatory standpoint.

ill Tumulty CEO Rapid Finance: 01:00:23

And, uh, but you want to be able to bring this to your customers and participate,

ill Tumulty CEO Rapid Finance: 01:00:27

uh, in some joint value there.

ill Tumulty CEO Rapid Finance: 01:00:30

We can do all of it, right?

ill Tumulty CEO Rapid Finance: 01:00:32

So maybe, uh, in that example, the partner company is working

ill Tumulty CEO Rapid Finance: 01:00:36

with us on marketing campaigns.

ill Tumulty CEO Rapid Finance: 01:00:38

Um, but once we get responders, we're taking it from there through

ill Tumulty CEO Rapid Finance: 01:00:42

the acquisition, origination and servicing process and keeping those

ill Tumulty CEO Rapid Finance: 01:00:46

loans on our own balance sheet.

ill Tumulty CEO Rapid Finance: 01:00:48

. Um, on the other end of the spectrum, there may be a partner that looks,

ill Tumulty CEO Rapid Finance: 01:00:53

uh, maybe like a bank, um, that already has the authority to lend.

ill Tumulty CEO Rapid Finance: 01:00:58

They have a balance sheet, so, uh, they have the capacity to do lending.

ill Tumulty CEO Rapid Finance: 01:01:03

Um, and they're a bank, so they make loans so they know how to lend.

ill Tumulty CEO Rapid Finance: 01:01:07

But maybe the thing that they need is they need a small business

ill Tumulty CEO Rapid Finance: 01:01:11

lending software platform that allows them greater speed, accuracy, and.

ill Tumulty CEO Rapid Finance: 01:01:16

Efficiency to, um, make the economics work and make the customer experience

ill Tumulty CEO Rapid Finance: 01:01:21

better for the small business customer.

ill Tumulty CEO Rapid Finance: 01:01:23

Right?

ill Tumulty CEO Rapid Finance: 01:01:24

So maybe all that partner needs is one or more elements of our software

ill Tumulty CEO Rapid Finance: 01:01:29

platform, or, um, they may want us to participate as a servicing

ill Tumulty CEO Rapid Finance: 01:01:33

partner in some pieces, for instance.

ill Tumulty CEO Rapid Finance: 01:01:35

Um, Uh, inevitably when some of those small business loans write

ill Tumulty CEO Rapid Finance: 01:01:40

off, maybe they don't want to do the collections of recoveries work, in

ill Tumulty CEO Rapid Finance: 01:01:43

which case, uh, we could do that in the

ill Tumulty CEO Rapid Finance: 01:02:43

Yeah, that's a great one, Tedd So if you're gonna start a new

ill Tumulty CEO Rapid Finance: 01:02:47

FinTech company, um, what's the one thing where you should start out?

ill Tumulty CEO Rapid Finance: 01:02:54

Um, you know, I've been down this path a couple of times, uh, and some

ill Tumulty CEO Rapid Finance: 01:02:58

of them have worked out and frankly some of them have, uh, not worked out.

ill Tumulty CEO Rapid Finance: 01:03:02

Uh, and as I.

ill Tumulty CEO Rapid Finance: 01:03:04

Reflect on my own experiences as well as what I've seen over a couple

ill Tumulty CEO Rapid Finance: 01:03:08

of decades doing FinTech work.

ill Tumulty CEO Rapid Finance: 01:03:10

Um, the biggest thing that I think separates success, uh,

ill Tumulty CEO Rapid Finance: 01:03:16

from lack of success is those businesses that find demand, right?

ill Tumulty CEO Rapid Finance: 01:03:22

Where is there is demand for what you are providing in the market.

ill Tumulty CEO Rapid Finance: 01:03:27

Um, even if you don't have the business model right at first,

ill Tumulty CEO Rapid Finance: 01:03:30

you will figure it out over.

ill Tumulty CEO Rapid Finance: 01:03:31

time Uh Right.

ill Tumulty CEO Rapid Finance: 01:03:33

Uh, there will be a, uh, customers will seek you out, uh, and, uh, capital

ill Tumulty CEO Rapid Finance: 01:03:41

sources that you need to, to grow and expand your business will be available.

ill Tumulty CEO Rapid Finance: 01:03:45

Right.

ill Tumulty CEO Rapid Finance: 01:03:46

Um, there's lots where it's like, Hey, that's a really cool technology and we

ill Tumulty CEO Rapid Finance: 01:03:49

can go, we can go build that and Right.

ill Tumulty CEO Rapid Finance: 01:03:52

Some of those companies get up and get going but Uh, if they're not able

ill Tumulty CEO Rapid Finance: 01:03:56

to pivot into something where they find demand, uh, and are able to meet

ill Tumulty CEO Rapid Finance: 01:04:01

that demand, um, it's really tough to get a business off the ground.

ill Tumulty CEO Rapid Finance: 01:04:05

You know, there are certain entrepreneurs out there, uh, that,

ill Tumulty CEO Rapid Finance: 01:04:08

uh, in FinTech and other spaces, they got a nose for it, right?

ill Tumulty CEO Rapid Finance: 01:04:11

And they can find that demand.

ill Tumulty CEO Rapid Finance: 01:04:12

They find what people want, they figure out how to make money later.

ill Tumulty CEO Rapid Finance: 01:04:16

Um, but, uh, demand, strong demand will, uh, will take

ill Tumulty CEO Rapid Finance: 01:04:21

way Yeah.

ill Tumulty CEO Rapid Finance: 01:04:34

So Tedd I'd say for your audience, uh, if you are a small, uh, uh, in the small

ill Tumulty CEO Rapid Finance: 01:04:40

business space out there as an, uh, entrepreneur or as a, uh, FinTech company

ill Tumulty CEO Rapid Finance: 01:04:46

that wants to serve the small business community, um, we're looking for partners.

ill Tumulty CEO Rapid Finance: 01:04:51

Um, we would love to hear from you if you are an enterprise, uh, scale customer

ill Tumulty CEO Rapid Finance: 01:04:56

out there that wants to bring capital.

ill Tumulty CEO Rapid Finance: 01:04:58

To your small business customers or wants to learn how you could get into

ill Tumulty CEO Rapid Finance: 01:05:03

providing your own capital, uh, we would love to partner with you as well.

ill Tumulty CEO Rapid Finance: 01:05:08

So, um, uh, give us a shout, uh, you, uh, more we can Yeah.

ill Tumulty CEO Rapid Finance: 01:05:28

So, um, you can find us online of course, at rapidfinance.com

ill Tumulty CEO Rapid Finance: 01:05:32

Uh, you'll find that we have.

ill Tumulty CEO Rapid Finance: 01:05:34

Two segments that are out there.

ill Tumulty CEO Rapid Finance: 01:05:37

Um, we have our small business borrower segment, and then we

ill Tumulty CEO Rapid Finance: 01:05:40

have the rapid enterprise segment.

ill Tumulty CEO Rapid Finance: 01:05:41

So, uh, if you are an enterprise customer, you're gonna go, gonna wanna go look

ill Tumulty CEO Rapid Finance: 01:05:46

at the rapid enterprise side, where you can take a look at what we have to offer

ill Tumulty CEO Rapid Finance: 01:05:50

in software servicing and partnerships.

ill Tumulty CEO Rapid Finance: 01:05:52

Uh, and on the small business owner side, uh, we'd love to show you, uh, what

ill Tumulty CEO Rapid Finance: 01:05:58

we can help you with, uh, in terms of capital needs for your small business.

ill Tumulty CEO Rapid Finance: 01:06:02

enterprise

Tedd Huff | Fintech Confidential:

: 01:06:25

something

Will Tumulty CEO Rapid Finance:

: 01:06:27

Tedd thanks so much for having me.

Will Tumulty CEO Rapid Finance:

: 01:06:29

It's been great to talk with you and uh, and with your audience.

Will Tumulty CEO Rapid Finance:

: 01:06:41

Hey, Tedd it's great to be with you here today.

Will Tumulty CEO Rapid Finance:

: 01:07:12

Uh, you know, Tedd uh, I was interested coming outta grad school

Will Tumulty CEO Rapid Finance:

: 01:07:16

in manufacturing of all things.

Will Tumulty CEO Rapid Finance:

: 01:07:18

And, uh, one day walking across the quad I was tackled by a recruiter from

Will Tumulty CEO Rapid Finance:

: 01:07:23

Capital One who drug me over to a table, and then I found myself in banking.

Will Tumulty CEO Rapid Finance:

: 01:07:27

So, um, you know, after a few years of Capital One, uh, doing some telecom work

Will Tumulty CEO Rapid Finance:

: 01:07:32

in an ill-fated telecom venture that the company was after there, uh, I got

Will Tumulty CEO Rapid Finance:

: 01:07:37

onto other things, did some, uh, some debt buying, some collections, some.

Will Tumulty CEO Rapid Finance:

: 01:07:40

specialty Credit card work and actually started the first

Will Tumulty CEO Rapid Finance:

: 01:07:43

prepaid debit card program, uh, at Capital One, uh, many years ago.

Will Tumulty CEO Rapid Finance:

: 01:07:48

Uh, I was interested in that, uh, and as Capital One was looking to do

Will Tumulty CEO Rapid Finance:

: 01:07:52

other things in the, in the business that I was running for them, uh,

Will Tumulty CEO Rapid Finance:

: 01:07:55

myself and a couple guys on my team started a prepaid debit card company.

Will Tumulty CEO Rapid Finance:

: 01:07:58

And that's, uh, that's how it all got going.

Will Tumulty CEO Rapid Finance:

: 01:08:23

You know, I would say the military is a great place to start if that's your thing.

Will Tumulty CEO Rapid Finance:

: 01:08:28

When you are early in your career because you learned a bunch of stuff.

Will Tumulty CEO Rapid Finance:

: 01:08:31

Um, I was fortunate.

Will Tumulty CEO Rapid Finance:

: 01:08:33

In that, uh, I got to, um, uh, lead teams, uh, and be responsible for,

Will Tumulty CEO Rapid Finance:

: 01:08:41

uh, lots of equipment and other sort of mission critical items that had

Will Tumulty CEO Rapid Finance:

: 01:08:45

a pretty big dollar value attached to them very earlier in my career.

Will Tumulty CEO Rapid Finance:

: 01:08:48

Uh, and so I think that kind of leadership and management experience

Will Tumulty CEO Rapid Finance:

: 01:08:52

of people and equipment and dollars.

Will Tumulty CEO Rapid Finance:

: 01:08:56

Early on in your career is something that you get in the military, uh, that

Will Tumulty CEO Rapid Finance:

: 01:09:00

you don't get in many other places.

Will Tumulty CEO Rapid Finance:

: 01:09:01

And so, uh, that's been a, uh, a big leg up for me early in my management career.

Will Tumulty CEO Rapid Finance:

: 01:09:40

Yeah, exactly.

Will Tumulty CEO Rapid Finance:

: 01:09:41

Um, you know, I think particularly early on when you're, you know,

Will Tumulty CEO Rapid Finance:

: 01:09:45

whether you're 18 or 22, right?

Will Tumulty CEO Rapid Finance:

: 01:09:47

Y we don't have that, uh, career reference point, uh, right.

Will Tumulty CEO Rapid Finance:

: 01:09:52

So it's like, oh yeah, I'm responsible for 30 million dollar fighters jet right?

Will Tumulty CEO Rapid Finance:

: 01:09:56

And it's just, this is just what I do for work, right?

Will Tumulty CEO Rapid Finance:

: 01:09:59

We don't think about that.

Will Tumulty CEO Rapid Finance:

: 01:10:23

So, uh, you know, we grew the prepaid debit card company for a couple of years.

Will Tumulty CEO Rapid Finance:

: 01:10:27

Uh, we merged with, uh, another prepaid debit card company outta

Will Tumulty CEO Rapid Finance:

: 01:10:31

California called Account Now.

Will Tumulty CEO Rapid Finance:

: 01:10:33

Uh, I continued on with, uh, with account now and, uh, we continued to build

Will Tumulty CEO Rapid Finance:

: 01:10:38

that business up until, uh, until early 2015 where, uh, a bank called Green

Will Tumulty CEO Rapid Finance:

: 01:10:44

Dot, which is one of the big players, uh, in prepaid debit cards acquired.

Will Tumulty CEO Rapid Finance:

: 01:10:47

us Uh, and so, uh, a few months thereafter, as I was working on

Will Tumulty CEO Rapid Finance:

: 01:10:52

integration items, uh, the private equity guys, uh, who had invested in my debit

Will Tumulty CEO Rapid Finance:

: 01:10:57

card company gave me a call and, uh, asked if I wanted to come back to the East

Will Tumulty CEO Rapid Finance:

: 01:11:02

coast, come back to the lending side of things, and, uh, join the team at Rapid.

Will Tumulty CEO Rapid Finance:

: 01:11:26

Tedd You know, as I think about, uh, our mission here at Rapid Finance, it's really

Will Tumulty CEO Rapid Finance:

: 01:11:31

to help small businesses grow and prosper.

Will Tumulty CEO Rapid Finance:

: 01:11:35

Uh, and small businesses need capital to be able.

Will Tumulty CEO Rapid Finance:

: 01:11:38

To do that.

Will Tumulty CEO Rapid Finance:

: 01:11:39

Some small businesses, uh, based on the type of business or maybe

Will Tumulty CEO Rapid Finance:

: 01:11:42

the stage, uh, of the business, uh, that they're in, um, can access all

Will Tumulty CEO Rapid Finance:

: 01:11:47

kinds of different forms of capital.

Will Tumulty CEO Rapid Finance:

: 01:11:49

Um, they may get an SBA loan of various types.

Will Tumulty CEO Rapid Finance:

: 01:11:53

Uh, the United States Department of Agriculture actually has a very big, uh,

Will Tumulty CEO Rapid Finance:

: 01:11:57

rural small business lending program.

Will Tumulty CEO Rapid Finance:

: 01:12:00

Um, but then there are other times where.

Will Tumulty CEO Rapid Finance:

: 01:12:03

Uh, those products are either unavailable or they're not the right financing product

Will Tumulty CEO Rapid Finance:

: 01:12:08

that the small business needs at the time.

Will Tumulty CEO Rapid Finance:

: 01:12:10

Um, and so we provide, uh, those sorts of products on our own balance sheet.

Will Tumulty CEO Rapid Finance:

: 01:12:15

We also work with probably 50 or 60 other small business financing

Will Tumulty CEO Rapid Finance:

: 01:12:19

companies, uh, to help the small business owner first figure out what

Will Tumulty CEO Rapid Finance:

: 01:12:24

the right type of financing is for their particular business need at the time.

Will Tumulty CEO Rapid Finance:

: 01:12:27

Uh, and second, help them secure that financing Yeah, so some of those

Will Tumulty CEO Rapid Finance:

: 01:12:55

loans we offer on our own balance.

Will Tumulty CEO Rapid Finance:

: 01:12:56

sheet Uh, and some of those financing products we do through

Will Tumulty CEO Rapid Finance:

: 01:13:00

partnerships with others.

Will Tumulty CEO Rapid Finance:

: 01:13:02

Um, we are not an SBA lender, so uh, we can help small businesses find an SBA

Will Tumulty CEO Rapid Finance:

: 01:13:07

loan, if that's what they're looking for through some SBA lending partners of ours.

Will Tumulty CEO Rapid Finance:

: 01:13:11

Um, you know, A small business may or may not qualify for an SBA loan.

Will Tumulty CEO Rapid Finance:

: 01:13:18

Uh, depending on what type of business they are, what stage of

Will Tumulty CEO Rapid Finance:

: 01:13:22

growth they're in, um, uh, and other things about their business.

Will Tumulty CEO Rapid Finance:

: 01:13:27

So many small business owners may start by thinking, Hey, um, what I

Will Tumulty CEO Rapid Finance:

: 01:13:31

need or what I want is an SBA loan.

Will Tumulty CEO Rapid Finance:

: 01:13:34

Um, but, uh, they, that may not actually be the right choice.

Will Tumulty CEO Rapid Finance:

: 01:13:39

for Yeah.

Will Tumulty CEO Rapid Finance:

: 01:13:57

So while we are, uh, a lender ourselves, um, we are also making elements of

Will Tumulty CEO Rapid Finance:

: 01:14:03

our technology platform available to others who are either lenders

Will Tumulty CEO Rapid Finance:

: 01:14:08

themselves to small businesses.

Will Tumulty CEO Rapid Finance:

: 01:14:10

Or want to become lenders to small businesses.

Will Tumulty CEO Rapid Finance:

: 01:14:13

Fundamentally, when you wanna be a lender to a small business, um,

Will Tumulty CEO Rapid Finance:

: 01:14:18

even if you have experience on the consumer side, you need to think

Will Tumulty CEO Rapid Finance:

: 01:14:21

about it a little bit differently.

Will Tumulty CEO Rapid Finance:

: 01:14:23

Um, the main difference is when you're doing commercial lending,

Will Tumulty CEO Rapid Finance:

: 01:14:27

your borrower is not a person your borrower is, as is a business entity

Will Tumulty CEO Rapid Finance:

: 01:14:31

that may be owned by one person, or it may be owned by several people.

Will Tumulty CEO Rapid Finance:

: 01:14:36

. And so you wind up having this one to many relationship, uh, of business

Will Tumulty CEO Rapid Finance:

: 01:14:41

owners to businesses that you have to take into account when you're

Will Tumulty CEO Rapid Finance:

: 01:14:45

doing your credit modeling and your underwriting for a small business loan.

Will Tumulty CEO Rapid Finance:

: 01:14:50

And so we offer software platforms, uh, to enable companies to do just that.

d Huff | Fintech Confidential: 01:14:56

Give

ill Tumulty CEO Rapid Finance: 01:15:18

Sure Tedd So, um, the platform, uh, covers

ill Tumulty CEO Rapid Finance: 01:15:22

everything that is needed, uh, in order to, uh, originate, uh, service,

ill Tumulty CEO Rapid Finance: 01:15:28

uh, and ultimately collect on if necessary, a small business loan asset.

ill Tumulty CEO Rapid Finance: 01:15:33

Um, when we think of the, uh, the value chain for small business lending, it's

ill Tumulty CEO Rapid Finance: 01:15:39

a fairly simple three-step process.

ill Tumulty CEO Rapid Finance: 01:15:41

First, I'm.

ill Tumulty CEO Rapid Finance: 01:15:42

aquiring Uh, and there I'm getting lead, a small business owner who is interested

ill Tumulty CEO Rapid Finance: 01:15:47

in financing for their business.

ill Tumulty CEO Rapid Finance: 01:15:48

The second thing I'm doing is I'm doing origination, which is I'm seeing

ill Tumulty CEO Rapid Finance: 01:15:52

what kind of loan, what dollar amount, and what terms they could qualify

ill Tumulty CEO Rapid Finance: 01:15:56

for, and I'm creating a number of quotes that they can select from.

ill Tumulty CEO Rapid Finance: 01:16:00

Um, then after they accept one of those quotes, it moves on to

ill Tumulty CEO Rapid Finance: 01:16:04

servicing where I'm doing the regular collections or perhaps recoveries, if

ill Tumulty CEO Rapid Finance: 01:16:07

that becomes necessary down the road.

ill Tumulty CEO Rapid Finance: 01:16:10

Um, and so we have elements of our platform that can

ill Tumulty CEO Rapid Finance: 01:16:13

do do all of those parts.

ill Tumulty CEO Rapid Finance: 01:16:15

Um, we can take on the origination by standing up, uh, an online web

ill Tumulty CEO Rapid Finance: 01:16:19

form, or we can have some of our, uh, business advisors that would

ill Tumulty CEO Rapid Finance: 01:16:23

interact over the telephone with the.

ill Tumulty CEO Rapid Finance: 01:16:24

customers Um, we move on to the origination portion, uh, which does

ill Tumulty CEO Rapid Finance: 01:16:29

a whole bunch of data aggregation and enhancement, um, to run credit models

ill Tumulty CEO Rapid Finance: 01:16:33

and evaluate the credit worthiness, the dollar amount, the term, uh, and

ill Tumulty CEO Rapid Finance: 01:16:38

the rate, uh, that will be associated for various financing products.

ill Tumulty CEO Rapid Finance: 01:16:42

Um, then, uh, it will go to underwriting.

ill Tumulty CEO Rapid Finance: 01:16:45

Uh, where If necessary, an underwriter could dig deeper or we

ill Tumulty CEO Rapid Finance: 01:16:50

can run the machine-driven rules, uh, to help the underwriters to

ill Tumulty CEO Rapid Finance: 01:16:54

determine whether this is a, a loan that should be, uh, funded or not.

ill Tumulty CEO Rapid Finance: 01:16:58

Then from funding, it goes on to the servicing platform.

ill Tumulty CEO Rapid Finance: 01:17:01

Uh, and on the servicing side, we're doing all the functions of, uh, uh, customer

ill Tumulty CEO Rapid Finance: 01:17:07

service, uh, collections and working with customers if they're run into a problem.

ill Tumulty CEO Rapid Finance: 01:17:10

Uh, and then ultimately if things write off, uh, the recoveries,

ill Tumulty CEO Rapid Finance: 01:17:14

part

d Huff | Fintech Confidential: 01:17:40

say

ill Tumulty CEO Rapid Finance: 01:17:41

Yeah.

ill Tumulty CEO Rapid Finance: 01:17:42

So Tedd when we think about the speed, uh, that small businesses

ill Tumulty CEO Rapid Finance: 01:17:47

have a need for capital, um, it's a different sort of thing than if

ill Tumulty CEO Rapid Finance: 01:17:51

you're a really large company, right?

ill Tumulty CEO Rapid Finance: 01:17:52

If you're a large company, you've got financial teams that are.

ill Tumulty CEO Rapid Finance: 01:17:55

Doing forecasts and figuring out, uh, what your capital needs

ill Tumulty CEO Rapid Finance: 01:17:59

are gonna be years in advance.

ill Tumulty CEO Rapid Finance: 01:18:00

Small business owners, uh, often have an opportunity that

ill Tumulty CEO Rapid Finance: 01:18:04

comes up with that for them.

ill Tumulty CEO Rapid Finance: 01:18:05

Um, I just landed a new contract and I have to hire more employees to

ill Tumulty CEO Rapid Finance: 01:18:09

execute on it, or I'm, uh, I've got a hot product and it's really selling,

ill Tumulty CEO Rapid Finance: 01:18:13

so I need to bribe more inventory.

ill Tumulty CEO Rapid Finance: 01:18:16

Um, and.

ill Tumulty CEO Rapid Finance: 01:18:17

so That might come up on a Tuesday and they need funding by

ill Tumulty CEO Rapid Finance: 01:18:21

Thursday to get the wheels moving.

ill Tumulty CEO Rapid Finance: 01:18:23

Right?

ill Tumulty CEO Rapid Finance: 01:18:23

And so that's what we really focus on is that speed up

ill Tumulty CEO Rapid Finance: 01:18:27

front in the origination piece.

ill Tumulty CEO Rapid Finance: 01:18:29

Um, uh, on our book, uh, if we have a small business owner that gets a completed

ill Tumulty CEO Rapid Finance: 01:18:34

application to us, we have 80% of them.

ill Tumulty CEO Rapid Finance: 01:18:37

Uh, that are gonna get funded.

ill Tumulty CEO Rapid Finance: 01:18:38

They get funded within 24 hours.

ill Tumulty CEO Rapid Finance: 01:18:40

Um, the, the, the balance of the rest, it's usually not a

ill Tumulty CEO Rapid Finance: 01:18:43

day or two longer than that.

ill Tumulty CEO Rapid Finance: 01:18:45

Um, because that's what small business owners really need, right?

ill Tumulty CEO Rapid Finance: 01:18:48

They have these opportunities, they come up and they need to act quickly.

ill Tumulty CEO Rapid Finance: 01:18:51

Um, so our platform is designed to do that by automating, um, uh, all

ill Tumulty CEO Rapid Finance: 01:18:57

of the tasks that are associated.

ill Tumulty CEO Rapid Finance: 01:18:59

with Evaluating a small business application, um, from, uh, reading

ill Tumulty CEO Rapid Finance: 01:19:04

in information from paper statements of various types to gra gra

ill Tumulty CEO Rapid Finance: 01:19:09

grabbing accounting data straight outta their QuickBooks account.

ill Tumulty CEO Rapid Finance: 01:19:12

Um, running all this through models, doing fraud checks and things on the,

ill Tumulty CEO Rapid Finance: 01:19:16

on the front end and the back end.

ill Tumulty CEO Rapid Finance: 01:19:18

Um, Interactive, uh, uh, evaluations, uh, with the small business owner

ill Tumulty CEO Rapid Finance: 01:19:25

trying to understand what their needs are, uh, and ultimately getting

ill Tumulty CEO Rapid Finance: 01:19:29

to a decision and funding quickly.

ill Tumulty CEO Rapid Finance: 01:20:06

Yeah.

ill Tumulty CEO Rapid Finance: 01:20:06

So Tedd in the lending space, uh, as we look forward into next year, um, sort of

ill Tumulty CEO Rapid Finance: 01:20:13

with this backdrop of, uh, interest rates rising due to, uh, fed, uh, actions, um,

ill Tumulty CEO Rapid Finance: 01:20:20

And tightening sort of across the board.

ill Tumulty CEO Rapid Finance: 01:20:23

Um, if you know where to look, there are always good small businesses

ill Tumulty CEO Rapid Finance: 01:20:28

that have a need for capital.

ill Tumulty CEO Rapid Finance: 01:20:30

Um, even in a time, uh, that was as rough on small businesses as during

ill Tumulty CEO Rapid Finance: 01:20:35

the, uh, early, uh, spring of 2020 when the pandemic was going on.

ill Tumulty CEO Rapid Finance: 01:20:39

Well, many small businesses were closed for health reasons and struggling.

ill Tumulty CEO Rapid Finance: 01:20:43

There was lots of small businesses in the online space

ill Tumulty CEO Rapid Finance: 01:20:46

and other spaces that were just.

ill Tumulty CEO Rapid Finance: 01:20:47

booming Uh, and so, uh, depending on what the situation is, um, there are

ill Tumulty CEO Rapid Finance: 01:20:53

always good small businesses that have a need for capital to grow.

ill Tumulty CEO Rapid Finance: 01:20:57

And so, um, that's what we look for, uh, because we wanna help

ill Tumulty CEO Rapid Finance: 01:21:01

those small businesses grow.

ill Tumulty CEO Rapid Finance: 01:21:20

So some of the opportunities unique to the fintechs, uh, that we're

ill Tumulty CEO Rapid Finance: 01:21:24

expecting to come along in 2023, um, are a result of what banks are doing.

ill Tumulty CEO Rapid Finance: 01:21:30

Um, banks are, uh, particularly through SBA loans, uh, they are some of the

ill Tumulty CEO Rapid Finance: 01:21:35

largest lenders to small businesses.

ill Tumulty CEO Rapid Finance: 01:21:37

Um, but the banks are looking forward to 2023 and, uh, preparing their

ill Tumulty CEO Rapid Finance: 01:21:42

balance sheets for a recession, right?

ill Tumulty CEO Rapid Finance: 01:21:44

That means that they're tightening.

ill Tumulty CEO Rapid Finance: 01:21:45

credits Um, they're holding on to liquidity.

ill Tumulty CEO Rapid Finance: 01:21:49

Some of the challenges that banks are seeing are the deposit volumes

ill Tumulty CEO Rapid Finance: 01:21:52

are dropping as, uh, consumers and businesses are, uh, exhausting.

ill Tumulty CEO Rapid Finance: 01:21:57

The last of the, the government driven pandemic era of funds, um, and also

ill Tumulty CEO Rapid Finance: 01:22:02

banks, um, uh, it's, it's likely that they may have to hold more capital

ill Tumulty CEO Rapid Finance: 01:22:07

due to some regulatory changes, right?

ill Tumulty CEO Rapid Finance: 01:22:10

What that means is that banks, uh, will be more selective About the small

ill Tumulty CEO Rapid Finance: 01:22:15

businesses that they will approve for various types of financing products.

ill Tumulty CEO Rapid Finance: 01:22:19

Um, and that creates an opportunity for others in the space to find

ill Tumulty CEO Rapid Finance: 01:22:23

those, uh, well positioned, uh, small businesses that are a good lending

ill Tumulty CEO Rapid Finance: 01:22:29

risk, uh, and to be able to serve them.

ill Tumulty CEO Rapid Finance: 01:22:31

Uh, right.

ill Tumulty CEO Rapid Finance: 01:22:32

And so one of the things that's interesting that we're seeing is we're

ill Tumulty CEO Rapid Finance: 01:22:36

seeing our lead volume increase at a time, uh, when the general sentiment

ill Tumulty CEO Rapid Finance: 01:22:40

is that everyone is tightening.

ill Tumulty CEO Rapid Finance: 01:22:42

Uh, and so we see that as a good sign for us to be able to pick and

ill Tumulty CEO Rapid Finance: 01:22:45

choose, uh, to put the assets on our balance sheet that are going to be the

ill Tumulty CEO Rapid Finance: 01:22:50

most resilient as we head into next.

ill Tumulty CEO Rapid Finance: 01:22:51

year Yes.

ill Tumulty CEO Rapid Finance: 01:23:04

So, uh, in terms of the opportunities and where we can help, uh, a small

ill Tumulty CEO Rapid Finance: 01:23:09

business that, um, uh, That may not be able to be served by a bank.

ill Tumulty CEO Rapid Finance: 01:23:15

One of our longest sanding, uh, small business customers, uh, is a restaurant,

ill Tumulty CEO Rapid Finance: 01:23:21

uh, that is, uh, now in Castroville, California called Phil's Fish Market.

ill Tumulty CEO Rapid Finance: 01:23:25

Uh, Phil has been a, uh, we have been a financing partner

ill Tumulty CEO Rapid Finance: 01:23:29

for Phil for over 10 years now.

ill Tumulty CEO Rapid Finance: 01:23:31

Um, and as you can imagine, um, Phil's fish market is a seafood restaurant

ill Tumulty CEO Rapid Finance: 01:23:36

Uh, and many banks, uh, and other types of lenders are looking for

ill Tumulty CEO Rapid Finance: 01:23:40

assets that will back the, uh, act as collateral for backing their loan.

ill Tumulty CEO Rapid Finance: 01:23:45

Um, Phil being a seafood restaurant, he has a lot of collateral,

ill Tumulty CEO Rapid Finance: 01:23:49

uh, and during busy holiday seasons and other seasons, right?

ill Tumulty CEO Rapid Finance: 01:23:52

Um, he needs to stock up, but his collateral has a shelf life

ill Tumulty CEO Rapid Finance: 01:23:56

of a few days to a week, right?

ill Tumulty CEO Rapid Finance: 01:23:58

He's buying, uh, shrimp And lobster and all kinds of fish.

ill Tumulty CEO Rapid Finance: 01:24:02

And that's not the kind of asset that banks are often looking for.

ill Tumulty CEO Rapid Finance: 01:24:06

Um, right.

ill Tumulty CEO Rapid Finance: 01:24:07

And so, but we can look at Phil's business being a very successful, um, restaurant.

ill Tumulty CEO Rapid Finance: 01:24:13

Uh, and we can evaluate the cash flow of that business.

ill Tumulty CEO Rapid Finance: 01:24:15

See how long, uh, Phil has been in business, what a

ill Tumulty CEO Rapid Finance: 01:24:18

great customer base he's got.

ill Tumulty CEO Rapid Finance: 01:24:20

Um, and, uh, be a long-term capital partner to Phil um, when he has.

ill Tumulty CEO Rapid Finance: 01:24:25

that need So, uh, for Phil, we're mostly doing loans.

ill Tumulty CEO Rapid Finance: 01:24:47

Uh, you know, there are different businesses that, um,

ill Tumulty CEO Rapid Finance: 01:24:50

where, where different types of products can make sense.

ill Tumulty CEO Rapid Finance: 01:24:54

Um, in general, um, Most small businesses could do with more than

ill Tumulty CEO Rapid Finance: 01:24:58

one type of financing product.

ill Tumulty CEO Rapid Finance: 01:25:01

They may have a commercial real estate loan on their place of business.

ill Tumulty CEO Rapid Finance: 01:25:07

Um, in addition, they may have a, uh, a working capital, uh, loan for

ill Tumulty CEO Rapid Finance: 01:25:12

a particular piece of equipment, like a pizza oven that they need,

ill Tumulty CEO Rapid Finance: 01:25:15

uh, that sits on those premises.

ill Tumulty CEO Rapid Finance: 01:25:17

And they may have a need for a line of credit for those, uh, inventory or other

ill Tumulty CEO Rapid Finance: 01:25:21

expenses that tend to vary through.

ill Tumulty CEO Rapid Finance: 01:25:23

um Through business cycles, uh, throughout the year.

ill Tumulty CEO Rapid Finance: 01:25:27

So, um, it's really about, uh, helping the business owner, uh, first

ill Tumulty CEO Rapid Finance: 01:25:32

understanding their business, seeing what their need needs are, and helping

ill Tumulty CEO Rapid Finance: 01:25:35

that business owner figure out with what the right financing solution is

ill Tumulty CEO Rapid Finance: 01:25:39

for their particular need at the time.

ill Tumulty CEO Rapid Finance: 01:26:17

Yeah, so Tedd you know, when we think.

ill Tumulty CEO Rapid Finance: 01:26:20

Small business lending.

ill Tumulty CEO Rapid Finance: 01:26:22

Uh, and the way that it has historically been done, um, a lot of it has gone

ill Tumulty CEO Rapid Finance: 01:26:27

through banks and it has been sort of an offshoot of the commercial lending side.

ill Tumulty CEO Rapid Finance: 01:26:33

And when you're doing commercial lending, you're probably doing loans with an.

ill Tumulty CEO Rapid Finance: 01:26:36

Average dollar amount of 2 or 3 million, dollars sometimes more

ill Tumulty CEO Rapid Finance: 01:26:40

if you're a really big bank.

ill Tumulty CEO Rapid Finance: 01:26:42

Um, and the process that you go through when you're lending that

ill Tumulty CEO Rapid Finance: 01:26:45

amount of money is very involved.

ill Tumulty CEO Rapid Finance: 01:26:48

Um, historically it's been very human, uh, driven, um, right.

ill Tumulty CEO Rapid Finance: 01:26:53

You might be putting people on airplanes to, you know, fly to other states and

ill Tumulty CEO Rapid Finance: 01:26:57

do inventory accounts and warehouses and things like that, because that's

ill Tumulty CEO Rapid Finance: 01:27:01

the kind of thing that makes sense when you're doing a 5 or $10 million.

ill Tumulty CEO Rapid Finance: 01:27:04

dollar loan Right.

ill Tumulty CEO Rapid Finance: 01:27:05

On the other side of the spectrum, you've got consumer lending.

ill Tumulty CEO Rapid Finance: 01:27:09

Uh, and over the last number of decades, consumer lending has become very

ill Tumulty CEO Rapid Finance: 01:27:13

efficient, uh, because right, you can go in, you can go online, somebody can

ill Tumulty CEO Rapid Finance: 01:27:17

fill out a form, you can pull credit bureau and other information, right?

ill Tumulty CEO Rapid Finance: 01:27:21

Run your fraud checks and say, yeah, this is a person who could qualify for a

ill Tumulty CEO Rapid Finance: 01:27:25

$10,000 credit card and approve them right there, and they can be spending that.

ill Tumulty CEO Rapid Finance: 01:27:29

day Small businesses fit in the middle.

ill Tumulty CEO Rapid Finance: 01:27:32

Um, they're not a perfect fit for the consumer side because they're more

ill Tumulty CEO Rapid Finance: 01:27:35

complicated and they're more varied.

ill Tumulty CEO Rapid Finance: 01:27:37

Um, but they don't have the same dollar amounts associated with them that

ill Tumulty CEO Rapid Finance: 01:27:42

commercial lending, uh, operations have.

ill Tumulty CEO Rapid Finance: 01:27:45

So what you really need to do to be, uh, efficient and fast in the

ill Tumulty CEO Rapid Finance: 01:27:50

small business space is be able to have a platform that allows you to.

ill Tumulty CEO Rapid Finance: 01:27:54

sort of Dial a lever, um, depending on what that small business looks

ill Tumulty CEO Rapid Finance: 01:27:59

like everywhere on the one end from, Hey, this looks like a sole prop,

ill Tumulty CEO Rapid Finance: 01:28:03

maybe it's an Uber driver, right?

ill Tumulty CEO Rapid Finance: 01:28:04

Um, it's something that looks very consumer-like, but I'm actually

ill Tumulty CEO Rapid Finance: 01:28:08

lending to a business entity.

ill Tumulty CEO Rapid Finance: 01:28:09

Uh, and therefore there are some things that are different, but

ill Tumulty CEO Rapid Finance: 01:28:12

I can do a lot of that checking.

ill Tumulty CEO Rapid Finance: 01:28:14

Um, and, um, p be fast and be like, touch all the way to, I might be

ill Tumulty CEO Rapid Finance: 01:28:19

doing a small business loan for an established small business.

ill Tumulty CEO Rapid Finance: 01:28:24

That maybe has multiple locations.

ill Tumulty CEO Rapid Finance: 01:28:26

Maybe it's somebody with, uh, you know, five or six McDonald franchises and they

ill Tumulty CEO Rapid Finance: 01:28:32

might have 50 or 60 employees, right?

ill Tumulty CEO Rapid Finance: 01:28:34

So a much larger, small business, and maybe that loan is a half a

ill Tumulty CEO Rapid Finance: 01:28:38

million or a million dollar loan.

ill Tumulty CEO Rapid Finance: 01:28:40

Um, Uh, and so there you'd wanna say, Hey, I can identify that loan

ill Tumulty CEO Rapid Finance: 01:28:45

things specific about this small business, and I'm gonna let the

ill Tumulty CEO Rapid Finance: 01:28:48

machine do a bunch of automated parts.

ill Tumulty CEO Rapid Finance: 01:28:50

There's gonna be things in there that I wanna put human underwriters in the loop.

ill Tumulty CEO Rapid Finance: 01:28:54

And so the platform we've built, um, has rules and workflow engines that

ill Tumulty CEO Rapid Finance: 01:28:59

allow, um, based on characteristics of both the applicant, uh, and the product,

ill Tumulty CEO Rapid Finance: 01:29:05

uh, to have different workflows that involve, um, different elements of

ill Tumulty CEO Rapid Finance: 01:29:09

man and machine through the process.

ill Tumulty CEO Rapid Finance: 01:29:32

Yeah.

ill Tumulty CEO Rapid Finance: 01:29:32

So Tedd when it comes to customer experience, um, data can be super helpful.

ill Tumulty CEO Rapid Finance: 01:29:38

Uh, and it's really a matter of, um, making it as easy on the

ill Tumulty CEO Rapid Finance: 01:29:44

applicant as you possibly can.

ill Tumulty CEO Rapid Finance: 01:29:46

Um, that starts with every time that you either have data or can

ill Tumulty CEO Rapid Finance: 01:29:50

find data that you don't need somebody to type into a form use.

ill Tumulty CEO Rapid Finance: 01:29:54

that Um, uh, where you can prefill forms, uh, because you have data, or a partner

ill Tumulty CEO Rapid Finance: 01:29:59

you're working with has data, um, ask people to, uh, you know, prefill it

ill Tumulty CEO Rapid Finance: 01:30:04

for them and ask them to validate it.

ill Tumulty CEO Rapid Finance: 01:30:05

Right?

ill Tumulty CEO Rapid Finance: 01:30:05

Um, sometimes things change.

ill Tumulty CEO Rapid Finance: 01:30:07

You want them to check that to make sure that it's right.

ill Tumulty CEO Rapid Finance: 01:30:09

Um, As you get the data, you want to constantly be having

ill Tumulty CEO Rapid Finance: 01:30:13

rule sets to evaluate that data.

ill Tumulty CEO Rapid Finance: 01:30:16

Um, right.

ill Tumulty CEO Rapid Finance: 01:30:16

So don't make somebody sit there and take a half hour or an hour filling out a long

ill Tumulty CEO Rapid Finance: 01:30:20

application only to say, oh, I'm sorry.

ill Tumulty CEO Rapid Finance: 01:30:23

The second thing that you put in here indicates that you're a business

ill Tumulty CEO Rapid Finance: 01:30:26

type that we can't make a loan to.

ill Tumulty CEO Rapid Finance: 01:30:28

Um, right.

ill Tumulty CEO Rapid Finance: 01:30:28

So, um, it's much better for an applicant, uh, if there's not

ill Tumulty CEO Rapid Finance: 01:30:34

going to be yet, if there's not going to be an affirmative answer.

ill Tumulty CEO Rapid Finance: 01:30:37

And you know that to get an, a quick no.

ill Tumulty CEO Rapid Finance: 01:30:39

upfront Um, then to do a whole bunch of work only to find out that, hey, this

ill Tumulty CEO Rapid Finance: 01:30:44

never could have happened for me anyway.

ill Tumulty CEO Rapid Finance: 01:30:46

Um, so it's really about the way you structure your process and your flows

ill Tumulty CEO Rapid Finance: 01:30:50

around, um, what you can help a small business owner with, uh, versus uh,

ill Tumulty CEO Rapid Finance: 01:30:56

you know, the amount of effort that they have to put in to get there.

ill Tumulty CEO Rapid Finance: 01:31:53

Sure Tedd So as we think of, uh, the kind of enterprise partners that

ill Tumulty CEO Rapid Finance: 01:31:59

we would wanna work with in small business lending, um, really what

ill Tumulty CEO Rapid Finance: 01:32:04

we're looking to do is to bring lending as a service to that relationship.

ill Tumulty CEO Rapid Finance: 01:32:09

Um, now, uh, the one thing that I think all of those enterprise partners would

ill Tumulty CEO Rapid Finance: 01:32:14

have in common is they have a large base of small business customers that

ill Tumulty CEO Rapid Finance: 01:32:18

they want to be able to bring financial products to, specifically capital

ill Tumulty CEO Rapid Finance: 01:32:22

oriented products, um, uh, like loans or factoring or lines of credit and the like.

ill Tumulty CEO Rapid Finance: 01:32:28

Um, so what we are able to do is in that lending as a service model, we

ill Tumulty CEO Rapid Finance: 01:32:33

can do everything from, you've got a big pool of small business customers,

ill Tumulty CEO Rapid Finance: 01:32:37

um, but you're really not interested in doing the lending or you're not set up

ill Tumulty CEO Rapid Finance: 01:32:42

to do it from a regulatory standpoint.

ill Tumulty CEO Rapid Finance: 01:32:44

And, uh, but you want to be able to bring this to your customers and participate,

ill Tumulty CEO Rapid Finance: 01:32:48

uh, in some joint value there.

ill Tumulty CEO Rapid Finance: 01:32:51

We can do all of it, right?

ill Tumulty CEO Rapid Finance: 01:32:53

So maybe, uh, in that example, the partner company is working

ill Tumulty CEO Rapid Finance: 01:32:57

with us on marketing campaigns.

ill Tumulty CEO Rapid Finance: 01:32:59

Um, but once we get responders, we're taking it from there through

ill Tumulty CEO Rapid Finance: 01:33:03

the acquisition, origination and servicing process and keeping those

ill Tumulty CEO Rapid Finance: 01:33:06

loans on our own balance sheet.

ill Tumulty CEO Rapid Finance: 01:33:09

. Um, on the other end of the spectrum, there may be a partner that looks,

ill Tumulty CEO Rapid Finance: 01:33:14

uh, maybe like a bank, um, that already has the authority to lend.

ill Tumulty CEO Rapid Finance: 01:33:19

They have a balance sheet, so, uh, they have the capacity to do lending.

ill Tumulty CEO Rapid Finance: 01:33:24

Um, and they're a bank, so they make loans so they know how to lend.

ill Tumulty CEO Rapid Finance: 01:33:28

But maybe the thing that they need is they need a small business

ill Tumulty CEO Rapid Finance: 01:33:32

lending software platform that allows them greater speed, accuracy, and.

ill Tumulty CEO Rapid Finance: 01:33:37

Efficiency to, um, make the economics work and make the customer experience

ill Tumulty CEO Rapid Finance: 01:33:42

better for the small business customer.

ill Tumulty CEO Rapid Finance: 01:33:44

Right?

ill Tumulty CEO Rapid Finance: 01:33:44

So maybe all that partner needs is one or more elements of our software

ill Tumulty CEO Rapid Finance: 01:33:50

platform, or, um, they may want us to participate as a servicing

ill Tumulty CEO Rapid Finance: 01:33:54

partner in some pieces, for instance.

ill Tumulty CEO Rapid Finance: 01:33:56

Um, Uh, inevitably when some of those small business loans write

ill Tumulty CEO Rapid Finance: 01:34:01

off, maybe they don't want to do the collections of recoveries work, in

ill Tumulty CEO Rapid Finance: 01:34:04

which case, uh, we could do that in the

ill Tumulty CEO Rapid Finance: 01:35:04

Yeah, that's a great one, Tedd So if you're gonna start a new

ill Tumulty CEO Rapid Finance: 01:35:08

FinTech company, um, what's the one thing where you should start out?

ill Tumulty CEO Rapid Finance: 01:35:14

Um, you know, I've been down this path a couple of times, uh, and some

ill Tumulty CEO Rapid Finance: 01:35:19

of them have worked out and frankly some of them have, uh, not worked out.

ill Tumulty CEO Rapid Finance: 01:35:23

Uh, and as I.

ill Tumulty CEO Rapid Finance: 01:35:25

Reflect on my own experiences as well as what I've seen over a couple

ill Tumulty CEO Rapid Finance: 01:35:29

of decades doing FinTech work.

ill Tumulty CEO Rapid Finance: 01:35:31

Um, the biggest thing that I think separates success, uh,

ill Tumulty CEO Rapid Finance: 01:35:37

from lack of success is those businesses that find demand, right?

ill Tumulty CEO Rapid Finance: 01:35:43

Where is there is demand for what you are providing in the market.

ill Tumulty CEO Rapid Finance: 01:35:47

Um, even if you don't have the business model right at first,

ill Tumulty CEO Rapid Finance: 01:35:51

you will figure it out over.

ill Tumulty CEO Rapid Finance: 01:35:52

time Uh Right.

ill Tumulty CEO Rapid Finance: 01:35:54

Uh, there will be a, uh, customers will seek you out, uh, and, uh, capital

ill Tumulty CEO Rapid Finance: 01:36:02

sources that you need to, to grow and expand your business will be available.

ill Tumulty CEO Rapid Finance: 01:36:06

Right.

ill Tumulty CEO Rapid Finance: 01:36:07

Um, there's lots where it's like, Hey, that's a really cool technology and we

ill Tumulty CEO Rapid Finance: 01:36:10

can go, we can go build that and Right.

ill Tumulty CEO Rapid Finance: 01:36:13

Some of those companies get up and get going but Uh, if they're not able

ill Tumulty CEO Rapid Finance: 01:36:17

to pivot into something where they find demand, uh, and are able to meet

ill Tumulty CEO Rapid Finance: 01:36:22

that demand, um, it's really tough to get a business off the ground.

ill Tumulty CEO Rapid Finance: 01:36:26

You know, there are certain entrepreneurs out there, uh, that,

ill Tumulty CEO Rapid Finance: 01:36:29

uh, in FinTech and other spaces, they got a nose for it, right?

ill Tumulty CEO Rapid Finance: 01:36:32

And they can find that demand.

ill Tumulty CEO Rapid Finance: 01:36:33

They find what people want, they figure out how to make money later.

ill Tumulty CEO Rapid Finance: 01:36:37

Um, but, uh, demand, strong demand will, uh, will take

ill Tumulty CEO Rapid Finance: 01:36:42

way Yeah.

ill Tumulty CEO Rapid Finance: 01:36:55

So Tedd I'd say for your audience, uh, if you are a small, uh, uh, in the small

ill Tumulty CEO Rapid Finance: 01:37:01

business space out there as an, uh, entrepreneur or as a, uh, FinTech company

ill Tumulty CEO Rapid Finance: 01:37:07

that wants to serve the small business community, um, we're looking for partners.

ill Tumulty CEO Rapid Finance: 01:37:12

Um, we would love to hear from you if you are an enterprise, uh, scale customer

ill Tumulty CEO Rapid Finance: 01:37:17

out there that wants to bring capital.

ill Tumulty CEO Rapid Finance: 01:37:19

To your small business customers or wants to learn how you could get into

ill Tumulty CEO Rapid Finance: 01:37:24

providing your own capital, uh, we would love to partner with you as well.

ill Tumulty CEO Rapid Finance: 01:37:29

So, um, uh, give us a shout, uh, you, uh, more we can Yeah.

ill Tumulty CEO Rapid Finance: 01:37:49

So, um, you can find us online of course, at rapidfinance.com

ill Tumulty CEO Rapid Finance: 01:37:53

Uh, you'll find that we have.

ill Tumulty CEO Rapid Finance: 01:37:55

Two segments that are out there.

ill Tumulty CEO Rapid Finance: 01:37:58

Um, we have our small business borrower segment, and then we

ill Tumulty CEO Rapid Finance: 01:38:01

have the rapid enterprise segment.

ill Tumulty CEO Rapid Finance: 01:38:02

So, uh, if you are an enterprise customer, you're gonna go, gonna wanna go look

ill Tumulty CEO Rapid Finance: 01:38:07

at the rapid enterprise side, where you can take a look at what we have to offer

ill Tumulty CEO Rapid Finance: 01:38:11

in software servicing and partnerships.

ill Tumulty CEO Rapid Finance: 01:38:13

Uh, and on the small business owner side, uh, we'd love to show you, uh, what

ill Tumulty CEO Rapid Finance: 01:38:19

we can help you with, uh, in terms of capital needs for your small business.

ill Tumulty CEO Rapid Finance: 01:38:23

enterprise

Tedd Huff | Fintech Confidential:

: 01:38:46

something

Will Tumulty CEO Rapid Finance:

: 01:38:48

Tedd thanks so much for having me.

Will Tumulty CEO Rapid Finance:

: 01:38:50

It's been great to talk with you and uh, and with your audience.

Episode 34

14th Apr 2023

Keeping Small Businesses Moving Forward with Rapid Finance CEO, Will Tumulty

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Tedd Huff