Small business loans have been difficult to secure in the U.K. market since the global financial crisis. They have been so difficult to secure, in fact, that in 2012 a small team of financiers and technologists gathered to found a company called EZBOB—created specifically to lend to this high-demand, low-supply financial market.
The premise behind EZBOB is a simple one: U.K. banks are no longer able to do small business lending effectively. Traditional banks evaluate borrowers in ways that make smaller loans expensive and risky for them, even as an increasing portion of today's small businesses operate online, with detailed data about their success and performance is constantly accumulating. A new kind of lender able to access and make use of a borrower's real-world selling record stands to profit by making loans to small businesses in ways that banks simply can't.
This is precisely the kind of lender that EZBOB aspires to be.
EZBOB and a New Age of Banking
“New age banking” is what EZBOB Chief Technology Officer Nimrod Kaplan calls it. “We don't offer all of the things that a traditional bank can,” Kaplan says, “but what we do offer is done in a new way, with better results.”
EZBOB makes the loan application process much simpler than it has traditionally been, with funds for approved loans arriving very quickly afterward. Would-be borrowers simply visit the EZBOB website and fill out a brief online form. EZBOB's robust software uses real-world data in real time to make a decision about the loan and, if appropriate, to make an offer to the applicant. If the offered terms are accepted, funds are deposited electronically within hours or even minutes.
Instant Decisions and the Terapeak API
Instant, automated decisions like these are beyond most banks, but at EZBOB they're a regular part of doing business.
Terapeak data is one of the tools at the core of EZBOB's loan origination technology. Their proprietary software leverages Terapeak's Insights API to rapidly assemble a data-based performance profile for each applicant, taking into account their actual selling history—data that banks simply don’t have and lack the capability to analyze. This enables EZBOB to immediately identify and lend to the sellers best positioned to profit from an infusion of operating capital.
Kaplan says that EZBOB initially considered using publicly-available data on eBay and elsewhere for this purpose, but the data provided by Terapeak proved to be far deeper and more accurate, enabling better risk models for lending decisions.
“Using Terapeak data we can really analyze a seller,” says Kaplan. “We know how they are doing, whether they are currently in an uptrend or a downtrend, the amount of volume that they are moving, and so on.” For Kaplan, this kind of in-depth insight, assembled automatically using Terapeak data, is key to EZBOB's lending model.
Since being able conduct additional searches by hand makes human decision-making possible on the rare occasion when it's needed, EZBOB also supplements its use of the Terapeak API with manual access to market research data through Terapeak’s full suite of research products.
Using Technology to Make Business Life Easier
“Our main goal,” says Kaplan, “is to make life easier for our clients. We use our own technology and critical technology provided by companies like Terapeak to do this. Everything should be simple and user-friendly rather than a big hassle. Quick and to the point is our goal and our mantra. Terapeak is sitting on a pile of very interesting data that helps us to achieve this.”
Less than a year after launch, EZBOB is already looking for ways to expand—into new markets, new countries, and new communities, as well as into lending for small businesses operating offline. As it grows, the EZBOB team continues to work to make its product as simple and user-friendly—and as quick and to the point—as it can possibly be for borrowers, who use the loans in turn to grow their own businesses.
As one of the market leaders in developing what has become a new lending model, EZBOB is helping to fill a significant and emerging need in the U.K. economy—an endeavor that Terapeak is happy to be able to support.