USING FACEBOOK AND GOOGLE TO REVOLUTIONIZE FINANCE IN EMERGING MARKETS
It is estimated that a staggering 450 million companies worldwide are unable to get a loan from the traditional banking system because they operate solely in cash, cannot prove their creditworthiness, do not have collateral or are unable to demonstrate a market opportunity.
It is extremely hard for traditional banks to serve these small businesses when it is nearly impossible to evaluate the risk/opportunity and offer them small loans with low margins, compared to larger loans for big companies with high margins and less risk.
Even the companies that can be approved for a bank loan struggle with paperwork, meetings, and bureaucracy in a process that can take several months. The consequence is the loss of jobs, economic growth, and, ultimately, major movements of people towards areas with job opportunities.
The main problem is the costly and inefficient methods of assessing, delivering, and charging repayments on loans.
That’s why we built GrowthBond,
a platform designed to automate the credit assessment process for small business owners, which cuts waiting times by weeks, reduces loan operating costs, slashes minimum loans from thousands to hundreds of dollars, and enables real-time tracking of the deployment and financial return of the funds.
Instead of relying on a paper-based loan application, loans officers, and official meetings to review old school business documentation, we primarily rely on data from Facebook/Google and, secondarily, on revenue data from payment gateways, such as Stripe and Paypal.
We review companies’ marketing and revenue data, monthly revenue, return on ad spend, and unit economics to automate the diligence process and make a funding decision in minutes, compared to months in the traditional banking system.
If a company’s Facebook/Google ads and Stripe/Paypal sales metrics are positive, GrowthBond issues credit for the companies to hire internet marketing experts and increase their Facebook and Google ad spent. If the company does not conduct online marketing or charges customers offline, we provide a smaller loan for a marketing expert to setup advertising and a payment gateway. Consequently, Growthbond gradually disburse, monitor, and control the capital going into Facebook/Google ads and the sales and revenue going back into the company to charge the repayment.
This gives small business owners an alternative to expensive bank loans and trying to raise venture capital, which is close to impossible in most emerging markets. It leverages low start-up costs and an established user base of Facebook and Google to reach a wider and increasingly international audience beyond their traditional local market. Today, millions of African and Asian online retailers, selling everything from shoes, clothing, and cars, run their entire business through Facebook.
We offer investments up to $50,000
in active companies on Facebook with a positive ad spend and positive unit economics after we have reviewed the company’s marketing and revenue data. We normally approve the funding within 24 hours, and we do not require a personal guarantee or collateral, and we seek to invest in the company as it grows, so long as ad spend and unit economics remains positive.
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