Background
ByzFunder is a leading merchant cash advance company providing short-term loans to small businesses. Faced with the challenge of streamlining their underwriting process, particularly for smaller loans, ByzFunder sought a solution that could provide accurate Secretary of State, industry codes (NAICS codes) and other crucial business data for initial screening and verification. Livesight emerged as their partner of choice, offering a comprehensive and cost-effective solution that significantly improved their operational efficiency.
Challenges
ByzFunder's underwriting process was reliant on manual efforts, which was not sustainable for handling a high volume of small-dollar loans. The primary issues included:
- Inaccurate Industry Codes
- Brokers often provide incomplete or inaccurate industry codes in the application process.
- Manual Overload
- Underwriters can spend significant time verifying industry codes and secretary of state registration records through manual searches.
- Competitive Disadvantage
- Competitors were offering automated approvals and same-day funding, putting ByzFunder at a disadvantage.
Solution
ByzFunder implemented Livesight's advanced industry profiling solution, which provided:
- Accurate Industry Codes
- Livesight delivered reliable six-digit NAICS codes, reducing the reliance on incomplete or inaccurate broker-provided codes.
- Automated Processes
- The solution automated the initial stages of underwriting, particularly for smaller loans, freeing up underwriters to focus on more critical tasks.
- Partnership and Support
- Livesight’s Product and Data Science team provided exceptional customer service, regularly engaging with ByzFunder to refine and improve the product based on feedback.
Implementation
The implementation began with a micro-loan product intended to be fully automated, where no human intervention was required. As the process proved effective, ByzFunder expanded Livesight’s use across all applications to obtain a second opinion on industry codes.
Expansion
The collaboration extended to additional services, including:
- Know Your Business (KYB) Verifications: Ensuring businesses are properly registered with the Secretary of State.
- TIN Matching: Verifying the tax identification number through the IRS database.
The results of implementing Livesight’s solution were substantial:
- Increased Productivity
- Underwriters could focus on critical decision-making tasks rather than manual NAICS code and secretary of state registration verification. The frequency of incorrect industry codes dropped to less than one per week out of approximately 2,500 weekly verifications.
- Operational Efficiency
- The automated system handled up to 800 applications daily, streamlining the approval process and improving throughput.
- Enhanced Accuracy
- Livesight’s reliable NAICS code verification significantly reduced the occurrence of incorrect codes (<5%) and Livesight’s entity resolution capabilities allowed for automating lookup of secretary of state records, enhancing the overall underwriting process.
Client Testimonial
Eric Weiner, Chief Risk Officer at ByzFunder, praised Livesight for their partnership approach and dedication to improving their product. He highlighted the exceptional customer service and ongoing support from the Product and Data Science team, which surpassed their other vendor relationships.
Future Plans
ByzFunder plans to further integrate Livesight’s offerings, including exploring sanction list screening to enhance its risk management capabilities. The ongoing partnership aims to continuously evolve, leveraging new data sources and innovations from Livesight.
Conclusion
Livesight’s collaboration with ByzFunder showcases how tailored technology solutions can transform business operations, improve accuracy, and enhance productivity. By automating key aspects of the underwriting process, ByzFunder has positioned itself to better serve its clients and compete effectively in the financial services market.
Interested in transforming your risk management process? Contact Livesight today to learn how our solutions can help you achieve your business goals.
Client Overview
Company: ByzFunder
Industry: Financial Services - Small Business Financing
Location: New York, NY
