Credit Karma for businesses: monitoring credit for small businesses

Before online lending, long before Credit Karma, and way before machine learning powered by cloud-based applications, if a person or business needed to clean up their credit in order to apply for and be approved for a loan, perhaps even getting a loan on better terms, they had to write letters to each credit bureau where bad actions were recorded and ask to have those actions removed. That may have also entailed working out a payment plan with creditors who reported those actions in order to get in their good graces. Levi King understands that process well.

He also understands the challenges of being a small business owner. Having owned a hotel, a management company, a retail financial services company, and several franchises–all before co-founding Lendio and Nav–he’s seen countless small business owners with low credit problems.

“I’ve applied for financing about 30 different times,” he said, “and learned the hard way how it all works.”

King and Caton Hanson, a lawyer specializing in business credit, opened the doors to Nav in 2012. The lifelong friends saw a need for small business owners to manage their business credit and streamline access to financing. They each contributed half a million dollars out of pocket and raised another $40 million from venture capitalists. Last August, Experian, one of the tree major credit bureaus in the U.S., put in another $15 million. Tencent Holdings and Kleiner Perkins are both notable investors.

The Platform That Monitors Small Business Credit and its mobile app provide tools integrating and improving credit data so owners can get reporting, dispute errors, set goals, and keep track of where they are in relation to those goals.

“We start with where lenders say the credit box is,” King said. “We use machine learning and a match factor to unveil what’s keeping you from getting approved so you can work on that.”

The direct integration with various credit bureaus and customized alerts let small business owners see something wrong and act immediately by clicking to dispute those actions. The app redirects to the credit bureau websites where errors can be disputed online.

“We can predict errors, and the bureaus agree most of the time,” King said. “We like to measure engagement. How often do users log in? Is data improving? We’ve seen gains in both of those, and in credit approval. We’d like to remove the friction of applying for loans by getting people approved before they ever apply.”

Customer numbers have gone from 5,000 to 200,000 in two years as small business owners discover this alternative to dealing with each bureau separately. Unlike Credit Karma, they serve only the small business market. Nav hopes to continue adding data so customers can see information that lenders can use against them or that would help in making financial decisions. Their core product–business credit report scores–is free. For less than $30/month, users can get an additional dataset or credit check.

King said Nav hopes to incorporate PayPal and other data to the platform so that customers can focus on removing the friction of applying for loans and get approved before they ever apply.

Nav is bringing transparency to credit for the small business owner and solving the credit dilemma.

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Written with Nicki Jacoby.

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