Access to capital is fundamental for businesses to manage cash flow, expand, innovate and remain resilient. In the past few years, fintech companies have made it much more convenient for businesses of all sizes to secure capital. One principal company in this area is Priority, led by CEO Thomas Priore, which has developed a unified commerce platform that combines payments and banking solutions for businesses.
Priority offers an example of how fintech can improve operational efficiency and reduce costs. The company’s latest move in this area involves an integration with software company Pipe to create Priority Capital, a streamlined platform empowering businesses with seamless access to growth funding. Loans are based on transaction data, not a one-size-fits-all bank algorithm. This approach allows enterprises to better manage cash flow and fuel growth with fast funding and flexible payments.
Advanced technology is already a central part of automating and streamlining payments processing for most companies. But in recent years, fintech has expanded into providing alternative financing options and cost-effective financial services.
Priority is considered a leader in this area. It offers a unique, scalable platform that integrates payments and banking solutions and offers faster transactions and cash flow acceleration. It also eliminates the need for businesses to cobble together financial and sales systems using different platforms.
“Our mission is to change how any size company manages their money, and offering our customers access to funding through Pipe is a seamless and powerful extension of that,” Priore said.
Priority Capital is part of Priority’s unified commerce approach that connects a company’s payments, banking and payables on a single platform. This tech-driven approach to managing money through embedded financial services is quickly becoming a central component of modern business.
Embedded Finance Is Changing How Businesses Operate, Says Thomas Priore
Embedded finance is perhaps best known for how it’s rapidly changing the way consumers interact with financial products. One well-known example is Apple Pay, which allows people to make purchases with their phones. Ride-sharing apps are another example, incorporating payment processing within their platforms to ensure the entire transaction, from booking to payment, occurs within the app.
With a service like Priority Capital, fintech is also rapidly altering how businesses approach financial products. The flexibility built into these systems allows business owners to get approved for capital based on their biggest asset: the cash they bring in each and every day.
Thomas Priore says embedded finance is the future for companies of all sizes. He added, “We’re now at a point where it’s an expectation that my cash flow should get to me fast and I should be able to do what I want with it, when I want it.”
Priore discussed the issue at length in a webinar with Pipe CEO Luke Voiles. The two talked about the benefits of embedded finance and how it takes on real-world challenges for businesses.
“We’re sitting in a commerce network that demands modern tools to tap into its potential,” Priore said. “Access to working capital — fast, when you need it, on demand — is a really important component of a thriving business.”
Thomas Priore noted that small businesses account for between 40% and 50% of gross domestic product in the United States and collectively are the nation’s biggest employers. But, he said, “The average small business has less than 60 days of working capital.”
He noted that 90% of businesses don’t like their bank, many of them because of the difficulty in getting financial support like access to funding. Priore says Priority Capital offers less of a “one-hit wonder” loan and more of a partnership, comparable to a line of credit that businesses can pay down and then use again.
“It’s dynamic and I think that’s the most interesting part about it,” Thomas Priore said. “It’s a bank-like product. And that’s why we’re enthusiastic about bringing it to market.”
Thomas Priore Explains Why Access to Capital Is So Important
Access to capital is crucial for businesses. One of the biggest issues, especially for small-to-midsize concerns, is that additional capital can improve cash flow management.
Companies often face timing differences between when they incur expenses and when they receive revenue. Access to capital helps manage these cash flow gaps, ensuring businesses can cover short-term costs — including rent, utilities, payroll and supplier payments — and continue operations without interruption.
Capital is also vital for expansion. To grow, businesses need to invest in new products, services, markets or physical locations. Access to capital provides the necessary funds to seize growth opportunities and expand operations. Extra cash can also go toward research and innovation, which is key to staying competitive and meeting changing market demands.
Firms might also need capital to get through economic downturns and emergencies, leverage opportunities for new business, and employee retention and recruitment.
The bottom line, said Thomas Priore, is that business leaders have plenty of smart ways to use additional capital; they just need access to it.
He suggested business owners should be able to say, “I need access to capital when I need it. I should be able to access that just by going to talk to someone about that and saying, ‘This is the cash flow of my business. I need some excess because I want to do X, Y or Z. I want to make a big purchase. I want to buy inventory because I’ve got a big sale. I want to prepay a supplier because it’s a really good deal for me, and that’s going to help me increase the margin of my business.’”
Priority Capital offers an example of how fintech is quickly making that idea a reality.
How Priority Capital Works for Businesses of All Sizes
Every business can benefit from fast access to funding, but it’s especially essential for small businesses. About of small business owners say they encounter issues seeking financing from traditional banks, and 60% say that even when they do get funding from a bank, it’s less than what they asked for and needed.
Priority Capital bases its offerings on the business’s transaction data. Clients can get preapproved based on that data, allowing them to apply for and receive funding through Priority’s MX Merchant dashboard. This allows both fast funding and aligning payments with the merchant’s sales cycle.
Priority clients who seek funding through Priority Capital will receive an offer with competitive costs when compared to higher-rate funding options. They also can receive money just hours after approval. Payments are made as a percentage of the company’s revenue, allowing them to adjust to the company’s sales cycle.
Priority Capital also offers one straightforward fee with no hidden costs, interest or requirements for personal collateral. Thomas Priore said these factors, coupled with the fast, relatively easy access to capital, is what is “gathering excitement” about fintech banking solutions.
“He added, “It’s all about, ‘Hey, I can accelerate cash flow, I can optimize my working capital.’ I don’t care what business you’re in, you want that.”
