As banking relationships evolve, bank offerings are transforming alongside them.
This, as Rohit Mathur, head of Bridge built by Citi, tells PYMNTS CEO Karen Webster that the needs of small and medium-sized businesses (SMBs) have never been greater than they are today.
“There’s not many out there helping connect borrowers and lenders in the $250,000 to $10 million space,” he said, adding that when large corporate enterprises go hunting for access to capital, they are typically provided a term sheet from multiple lenders so they can compare terms to find the best fit for their needs — but there’s nothing similar for SMBs who might want improved access to capital.
That’s why Mathur and his team led the ideation, prototyping and creation of the Bridge built by Citi platform, designed to offer SMBs a modern digital solution for capital needs of up to $10 million.
“We [at Citi] wanted to see how we could do a lot of the things we do for our mid-corporate and large corporate clients for SMBs using those same processes and using technology,” Mathur said.
As reported by PYMNTS, the Bridge built by Citi platform recently announced a new partnership with Walmart to bring its lending capabilities to Walmart’s roughly 10,000 U.S. suppliers that qualify as SMBs.
Mathur says that bringing lending solutions for SMBs can help the platform serve as a bridge to scalable banking relationships and emphasizes that access to capital is a two-way street benefitting both lenders and borrowers.
“We have 70-plus lenders, including community banks and CDFIs (Community Development Financial Institutions) focused on SMB lending that can help these clients,” he said.
Mathur adds that one of the ways Bridge built by Citi helps SMBs the most is in the type of products it provides. “These are products that every small business needs, like a line of credit, a commercial mortgage, or a term loan to buy a competitor, or expand their business — and these are all products that businesses need to fulfill the orders they get from large vendors.”
It helps banks too, he notes, because banks — particularly community banks — want access to small businesses, and by using technology and partnerships, Citi can facilitate this interaction.
“Online lenders and other [FinTech] solutions are really focused on microloans and lending products that are less than $100,000 — but the business needs of SMBs looking for something in the range of $50,000 are different,” Mathur said. “Thinking about point-of-need financing. If you need the loan to deliver the product to a large client, like Walmart, financing can really propel a business to the next level.”
He noted that sometimes SMBs’ current banks might not be willing to extend a loan that could run into the low millions — but that the community banks on the Bridge platform view these lending products and solutions as their “bread and butter.”
“There are always lenders looking to deploy capital, they just need access to the SMBs, and they struggle to find that access because they’re competing with large institutions and online lenders. Many of these [community] institutions don’t have the capital themselves to build that digital storefront [to compete],” Mathur said. “So Bridge can serve as this channel to connect community banks to these great borrowers, and give these SMBs access to great lenders.”
He adds that with COVID, in-person meetings as a requirement by many banks went out the window, meaning that sourcing prospects became more challenging for lenders. “It used to be easier for lenders before when they could go meet people in the community, meet the business owners, but now they really need technology to find the SMBs … there’s just no other way to reach every small or medium-sized business owner.”
What’s more, says Mathur, is that a lot of existing digital solutions and online lending products don’t provide the kind of flexibility that SMBs are often looking for. As it relates to online lenders, “If you want to make a change, it gets a little tough, right? For a lot of online lending, when things are great, it is perfect — but if you have bumps in the road, it can get challenging. And with small business owners, 100% of them have bumps in the road. That’s just the nature of small business. By connecting them with a relationship manager, with a human being, that makes it easy for them to ask the right questions, get that education and support, and move forward.”
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