 Live from San Jose, California, in the heart of Silicon Valley, it's theCUBE, covering QuickBooks Connect 2016. Now, here are your hosts, Jeff Frick and John Wall. And welcome back inside the San Jose Convention Center here on theCUBE, along with Jeff Frick. I'm John Walls, appreciate you joining us here as we continue our coverage of QuickBooks Connect. 2016, live here on SiliconANGLE TV. This is the flagship broadcast, where we extract the signal from the noise. And Jeff, we're on the home stretch here to the second day. I think I could stay here for a few more days. Great guests, great lineups, great keynotes, and a lot of energy here on the floor, I like. A lot of energy, I love these kind of shows because it's really about helping people be successful. And we're talking about real things, and again, we keep coming back to products and solutions and technology, but for most small businesses, it's about cash. It's about cash flow. Very successful, Ranya Sukar is now joining us. She's a QuickBooks financing director there at QuickBooks, and we appreciate the time here, Ranya. So tell us about just the overarching mission, right? Because as Jeff said, helping people, giving them access to capital, badly needed, small business, it's a critical need. And what QuickBooks does on that, with that, on the financing platform. Well, you guys have seen it here for the last few days. The QuickBooks team is absolutely focused on helping small businesses survive and thrive. Everyone here is trying to crack that. And you just said it. Cash is one of the biggest pain points that small businesses face. Whenever we talk to small businesses, the first thing they tell us is the thing that keeps them up at night is cash flow. And we also know one of the biggest reasons that small businesses fail is they can't get access to cash flow and to cash. And so the team a couple years back said, we've got to crack this in order to help more small businesses survive past the five year mark and to be able to put their dreams into action. So with that in mind, we took a look at financing. And for small businesses, it's a fairly broken process. So we're working to reinvent small business lending. It's broken for a couple of reasons. One is if you have 10 businesses that go into a bank to apply for a loan, only three get approved. And it takes over 30 hours of work for a small business to do that application to a bank. So it's ripe for innovating and improving the experience for small businesses. So what we do is we are hyper focused on making the experience better in three ways. First, we're trying to drive up the approval rate. And we do that with the incredible clarity with which we can understand a small business based on the data that we have. We understand the small business ecosystem better than anyone. And we understand the full picture of a small businesses credit worthiness and financial health better than anyone. We can give them access to, but we can help them get credit for all the future invoices that they have coming in. We understand the strength of their customer base. You put that together, we can drive approval rates up. The other thing we're focused on is the time it takes to apply. You need to put together tax returns and interim financial reports if it's the middle of the year. And bank statements, it's very frustrating. We have most of that information in the into it space. And our vision is rather than even applying, it's just available for you in QuickBooks when you need it. And the third thing, so approval rates, the time it takes, the third thing we're very focused on is the guidance. Small businesses need advice. Most of them didn't get into running their own small business because they knew anything about finances. They had a dream and they wanted to put it into place. And so we're very focused on taking the insights we have about a small business to help them get lending that's right for them with confidence that they're getting the right financing for their business. So we can help them predict when they're going to need financing. And we can connect them to an accountant because we know over a million of our small businesses are connected to accountants. So that's what we do. And this week, as you heard, we just announced we crossed the half a billion dollar mark in financing a small business. Say that again. Half a billion dollars. Half a billion dollars of financing. Congratulations. We're incredibly proud. We're incredibly proud. Let me ask you a couple of details. So my kids are going, they're trying for college right now. So the common apps. So do you have like- Jeff will get somewhere shy of half a billion. I need money. Do you have like a common app inside QuickBooks, which is a defined kind of definition that then gets shared with the lenders that want to participate in the market? Or do you have like a defined QuickBooks FICO score, if you will, based on these other parameters that you have that then gets shared with the lenders? How do you kind of, you've got all this data. It's my data. But I'm allowing you to use it in such a way to help me get this loan in this marketplace. How does the actual mechanics work? I love that. We're a platform. Almost like an Amazon, in a sense where you go to Amazon, you have one thing that you want to get and you get access to multiple different providers. So we're a platform. Right now the way that it works is there's a common app. But the amazing thing is you don't have to fill it out because we have all the information inside QuickBooks. So we pre-fill it for you and ask you for just a couple of things, but we do all the work. And then we figure out which of our lending partners based on what you need. We've got about a dozen, are best suited for your needs. And then we send the information to the lenders with your permission. And then you get all your offers right there. And the really neat thing about what we do is we compare the offers apples to apples. This is pretty incredible. We're super focused on transparency. This is a big part of our value proposition. We always disclose the APR of the loan. We always show the loan cost apples to apples so that you know exactly what you're getting. We show you things like what are the fees? What are the prepayment penalties? So it's super clear, super transparent and you know what you're getting. It's like the comparison shopping table. Exactly. You lay it all out and I can make my decisions. Exactly. And then how long does it usually take on a relatively smooth process given the fact that you're already pre-populating the data, it goes out, what does it usually take? A lot of our lenders fund within the same day. So literally with a lot of our lenders, if everything goes right, you can apply within minutes and get funding in your bank account the same business day. The money goes through the same system as well. There are lenders and we have a portfolio of offerings. So we'll work with, we have an SBA lender. We've got working capital lenders. If you're going through the SBA process, it's a lot faster through our process than it would be if you applied through a traditional bank. But it still could take a couple of months in that case. So we make that very clear. When you choose the offering that you want, if you're in need for financing right away, it can happen very quickly. If you're willing to wait a couple more months, and in the worst case, in the case of an SBA loan, on average it's less than a week. Well it seems like you have so many pieces in place to make it much more convenient and much more reliable and I guess much more predictable. That's right. For a small business. What about approval rates then? Was it three out of 10? I think it's on average. That's the current, yeah. Is that the current, is that your average? Ours is better than that. It's not quite where, you know, we have a really high aspiration on that where we'd like to be able to get, you know, much, we'd like to get it closer to 60 or 70% over time via approval rate. So we're still moving in that direction. We've got a great team of, we've got tons of innovation and R&D happening right now back in Mountain View. We've got a ton of data scientists that are combing through this data and improving the approval rates all the time. So that's an area where we're innovating and really pushing for our small businesses. And so if you, you know, nice announcement this week, we're better than nice, but I need it, you know, a great announcement this week. But you're always looking, as you said, for the next best thing. Yep. And so what are you, what have you heard from your client base that says, okay, we've addressed this, now this is where we need to pivot. This is where we need to go. Like what's the next, you know, big hurdle or the next big challenge that you think you need to handle? It's innovating on those three areas I told you. And on each of those three, we've made quite a big, quite a lot of work and quite a lot of headway in the last few years, but there's so much more room. And so like I said, we've got this team of phenomenal data scientists working to find those areas of advantage for small businesses where we can help them get approved more often. We've got the team that's trying to really make it to a point where you're in QuickBooks and you can see your financing offer before you even apply. We want to get rid of the application altogether and just surface the best offer for you. And then all the prediction around when you're going to need financing and that cash flow prediction, looping in the accountant so the accountant can immediately see all the options you are given and they can talk through them with you. And your clients can find out right away the customers do it if they did not get approved. At least there's, where's your trouble area? You know, where did the red light come on? That's right. Because of the figures and you're able to consult with them and help them to shore up their bottom line? We don't do enough of that today. It's absolutely in our roadmap. So that's a huge opportunity because we have a relationship with small businesses. It's not like a transaction where you go to a website and you apply for a loan. We're in it for the long term to help small businesses grow. And so you can imagine, and this is where we're headed, when you start, you know, you get your first financing, it could be a credit card. And then a year or two later, we see that your financials have improved and we consult you on the next offering and all the way you get better terms because you've been with us for a while and we can help make sure that you're getting better financing deals over time. It's a really interesting situation because, you know, hopefully over time, really it becomes, we always talk about kind of looking back and then predictive and then prescriptive. So in theory, as you're moving down your path as you're growing your business, it should actually be flaggy, right? Hey, by the way, you've got a big event, seasonality's coming up. Oh, we just noticed you just locked in a big purchase order. Somebody's late to pay, et cetera. It might be a good time to get actually ahead of the curve before you even know that this event is coming to go ahead and make, even up to probably in making the offer. Absolutely, you know, you're getting ready to, you know, for the holidays and have you thought about making sure you've got enough financing to buy as much inventory as you want this year so you can take advantage of the seasonal trends we're seeing? Or we're seeing a lot of retailers, you know, really having up on inventory this year. Have you thought about doing that as part of your strategy? It looks like it could be a good year. So there's so much opportunity there. We can pair every small business owner with a line of credit so that they can manage payroll at any given time and never have to worry about the cash flow ups and downs that come. Right, and then I would imagine too, within like those different offers, not only apples to apples that cost the same type of a loan that maybe should consider, you know, a factoring on your receivables versus, you know, a capital loan that's capitalized against some equipment or something, because there's also options within the types of financing that you may want to choose. So on that, we've done quite a bit of work. We have lenders in our portfolio that do invoice financing. We've got lenders in our portfolio, Mx Working Capital Terms that do vendor bill payment through, you know, paying all of your bills that are coming up. We've got, as I said, SBA loans that will help with long-term expansion. So we've got that and we're just continuing to innovate on that too. And from the lender point of view, as you start bringing, you said you have about a dozen bringing in more, you know, for the opportunity because a lot of them probably already have existing relationships with many of these clients. How do they see kind of the opportunity to interface with those clients in this different way through QuickBooks as an intermediary? Oh, they love it because it's very hard for these lenders to go out and acquire new customers. Oftentimes they don't have a relationship with these existing customers and they have to go out and do the hard work to acquire customers. Whereas they're in the QuickBooks ecosystem and, you know, customers really love the opportunity to work with these lenders because we can provide the right advice to them paired with the loan offering. So it works out very well. It should be cheaper for them to actually provide those too because, again, you're taking a lot of the headache out. So before we went live, you talked about some of the numbers. I just want to go through some of the numbers. So you shared the big number, 500 million. But in terms of kind of average loan size that you see, kind of lifetime value of the loans to some of the customers, I wonder if you could share some of those statistics. Sure. So, you know, we see two very different needs for financing from our customer base. There's the working capital loans and then there's the expansion capital loans. And our customers typically are split between the need for both. And at any given time, a business actually is looking for both. They need to smooth over the working capital and then the expansion capital as well. But our average loan size is about $35,000 today. And it ranges from as little as $2,500 to just smooth a very small cash flow bump that you have all the way up to $250,000, $500,000 to do some of the bigger expansions that small businesses are looking to do. And it's really wonderful to be able to help small businesses on both sides of the spectrum because if you're a small business owner, seasonality is really a major pain point. Oftentimes, they'll have most of their business concentrated in the summer months or potentially the summer months and the winter months, but not the spring and the fall. And so you need, you still have tons of bills, you have employees you need to cover in those off months and having access to financing where you can get it fairly quickly because you don't know when those bumps are going to hit is incredibly valuable. On the flip side, the expansion side, every business owner's dream is to expand. And it's been amazing to be here over the past few days and hear these stories. You know, Allie Webb on stage yesterday, the founder of Drybar, talking about how she went from one location to 66 in five years. And so it's very hard to go into a bank branch and convince them of your grand idea to expand. Especially if they don't have hair. Especially if they don't have hair. I mean, she had a hard time. And her brother, her business partner. Yeah, they're sitting with them, they don't have hair either. So for that reason, it's hard to convince people. And so it's wonderful to be able to help the expansion side of things too. Hopefully this has been, if nothing else, a great opportunity for Frick, Inc. to find out about the small business that my colleagues want. My application has already gone through. We'll find out in less than 24 hours. I'm going into my bank right now, Tom. If the kids are going to Stanford or you're going to work at the community college for a year or two. Ron, we appreciate the time. Sure, it was great. Thank you for being here. Thank you. And congratulations on the AmEx announcement and some of the other great things you have in the pipeline now to make spoiled business dreams come true. Wonderful. Thank you very much. It was great to chat with you. Thank you very much, Ron. Back with more here on theCUBE from San Jose in just a moment.