Thought Leaders in Financial Technology: Levi King, CEO of Nav (Part 3)

Sramana Mitra: Is there any dynamic that you see in people seeking credit versus not seeking credit by industry sectors?

Levi King: The answer probably won’t surprise you. There are certain industries where your credit comes into play way more often than others. My first business was an electric sign company. I would get 50% downpayment from the customer. I had to manufacture and install the job. I was a lender to my customer for 30% to 40% of the job because our margin was only 10% to 15%.

In those industries, you use your credit all the time to get financing. There are some industries where the credit is way more relevant more often and they’re borrowing more money more frequently. Whereas the example I gave of a home-based consultant that maybe had three customers, their credit’s going to matter because they need a business credit card. Maybe they want to lease their automobile. They’re not going to need credit as often as a business with meaningful business operations.

Sramana Mitra: The dynamics of payment are different, especially if consultants are paying wild chunks of money and don’t have a lot of employees. They don’t really need a lot of working capital financing. Retail is a very common category that needs credit more often than not. Is there any other category? Do you see, for example, receivable financing coming up?

Levi King: Yes, absolutely. The example I gave of my manufacturing company, that was a common one. You have big AR. You can, oftentimes, borrow against that. Also, you might be getting a loan for inventory or getting credit directly from suppliers. Receivable financing is very common. Fortunately, there’re a lot of alternative lenders that are now carving into some of these categories where historically it was very clumsy to get the financing. Capital is much easier and the cost, overall, is coming down.

Sramana Mitra: What about the competitive landscape? Are there other people doing what you’re doing?

Levi King: There are lots of people doing bits and pieces of what we do, but no one is doing everything we do. If you want to understand Dun & Bradstreet business credit, you can go to one of two places. Here or Dun & Bradstreet. If you want to understand your Experian business credit, you have to get through us or Experian. If you want a business loan, you can got a loan broker like Lendio.

It’s very fragmented, but there’s nowhere you can go to actually get the credit and financial education in one piece. If you want to know if you’re qualified for something before applying, there’s nowhere you can go other than Nav to know that.

Sramana Mitra: Got it. The way to look at it is, all the people who are lending are also looking at this data. You, as the small business owner, do not have a console to look at your credit options across those different lenders. That’s the summary of all this.

Levi King: Absolutely. If you apply with the lender without knowing if you’re qualified, they can’t share back with you that data. They can’t show you the business credit data either. That’s the challenge. In this day and age, it’s amazing to think that anyone would apply for any financing product unless they knew there was high certainty. Small business really trails consumer. More and more, consumers are watching their credit and they know where they stand. It means the lender can’t give them any baloney. They can’t drive up the price.

Sramana Mitra: Transparency is always good.

Levi King: We’re leading the battle in small business rights in transparency and privacy.

Sramana Mitra: Excellent. It’s really interesting what you’re doing. I’m quite familiar with this segment in terms of what we do. We work with a lot of small businesses. Our whole business is about working with entrepreneurs and helping them grow. We have relationships with some people who are lending into the small business ecosystem. What you’re describing is actually very interesting from that point of view.

Thank you for your time.

This segment is part 3 in the series : Thought Leaders in Financial Technology: Levi King, CEO of Nav
1 2 3