Cash flow management company Settle has secured a $145 million credit facility with Silicon Valley Bank.
The financing, announced in a news release Tuesday (July 25), will let Settle develop its lending products for larger eCommerce and consumer brands.
“Approximately 80 percent of small businesses fail because of cash-flow issues,” Settle founder and CEO Alek Koenig said in the release. “Working capital is, and has always been, the lifeblood of small business, but given the economic climate today, it’s become critical to survival.”
Based in San Francisco, Settle provides a centralized hub to that lets businesses pay vendors, track payment status, handle invoices and apply for financing.
The additional capital will help Settle offer its clients tools to manage their cash flow and get access to financing, the release added.
The new funding is happening at a time when businesses are seeking a number of different solutions to address their cash flow concerns, as PYMNTS wrote earlier this month.
In the U.S., 60% of small and medium-sized businesses (SMBs) reported they have implemented real-time payment solutions to lower the turnaround time between incoming and outgoing payments. Meanwhile, another study found that 81% of healthcare companies and 67% of finance and insurance businesses plan to invest in real-time payments.
“Companies are also backing up faster payments capabilities with the software and hardware needed to keep them running smoothly,” PYMNTS wrote. “Forty-eight percent of CFOs said their companies have invested in digitized working capital programs, and 77% of companies that made such investments reported improvements as a result.”
Other SMBs have begun exploring new financing venues like turning to their own customer bases for capital by selling bonds to their local communities and end customers.
The practice, known as “regulation crowdfunding,” has gotten the blessing of the Securities and Exchange Commission (SEC) and has platforms that facilitate it such as Honeycomb Credit and Mainvest.
“The push toward this credit channel — which we might term hyper-localized — spotlights the appeal of community-based lending and how smaller companies can monetize at least some of the goodwill generated among local clientele and through word of mouth,” PYMNTS wrote.
Settle’s funding from Silicon Valley Bank (SVB) comes as that bank is cautiously resuming lending operations after it collapsed and was purchased by First Citizens Bank in March.