Mirador Financial Inc. is a front-end small business lending platform supporting established lenders with borrower acquisition, digital application, decisioning and borrower communications. Mirador leverages a streamlined user experience to create efficiencies in the lending process, giving traditional lenders the edge they need to compete.
When I was at Intuit, I was head of product for mobile payments and point of sale and in charge of a product called Go Payment, which is a Square competitor in essence, although this was before Square was big.
We had a lot of QuickBooks customers, and our task was to focus on the QuickBooks customer. They already had connections with the software. The powers that be told us not to worry about creating new demands, new businesses, etc., and that turned out obviously to be a mistake because Square really created a whole new market. Taxi drivers. Food carts. Occasional sellers. And we had a whole group of people focused on larger volume, larger value.
This was very analogous to the banking sector. Intuit felt they could deliver a seamless, much more integrated experience to those larger, established businesses, already well-versed in their software. And taxi drivers don’t tend to use QuickBooks.
It seemed, at the time, a very good rationale. For the same cost in acquiring a customer, you make a lot more money with the larger enterprise focus. But without any cross-selling, and continuing to pursue the same type of customer that was always pursued, Intuit missed out on a whole set of customers who weren’t being served, or who were underserved.
It is a mistake to ignore such a large and vibrant segment of the market.
That was a big lesson learned and something we carried forward when launching Mirador. The tendency among banks is similar to Intuit, to focus on the million-dollar loans, the big businesses. But it is a mistake to ignore such a large and vibrant segment of the market.
More than 70 percent of loans made to small businesses are under $150,000. In aggregate, loans to them can be very profitable, and a lot of these smaller businesses grow up to be bigger businesses. That was the market. We saw these small businesses that were just chronically underserved. Yet these small firms are over half the jobs in the country. They produce an enormous percentage of GDP but are completely underserved financially. We knew that was our market.
For a bank, it’s the same amount of effort to do a $50,000 loan as it is to do a $50 million loan. We got our start with those smaller-dollar loans. We learned a lot. We’ve since expanded into larger collateralized loans and commercial real estate, but the small business market remains a big chunk of our business. We are able to turn things around so quickly for people. It’s also very fun for us to have such a significant impact on individual businesses and equip them with capital that allows them to thrive.
Follow Mirador on Twitter at: @mirador
Pictured: Trevor Dryer | Photo courtesy of Trevor Dryer