Hansa

The Challenge

The systemic problem at the heart of business credit

For small businesses in the US today, there is shockingly limited information a creditor can use to underwrite the business. As a result, lenders originate less credit than they otherwise could and small businesses don't get the funding they need (and would otherwise qualify for).

This system diagram of business credit ecosystem shows how many of the organizations in the space interact.

Hover/tap to see the impacts of limited underwriting data on this system.

Hansa's Journey

Finding product market fit

We first set out to solve this issue by directly trying to help the stakeholders that felt the downstream impacts of this problem: the small businesses. Unfortunately, most small businesses don't acutely feel the imapcts of the probelem until it is already too late and they are denied funds they need.

In speaking with more small businesses and credit-providers, what we found is that even the credit businesses did get wasn't being reported anywhere. It's no wonder that small businesses have almost no credit history that can be used to underwrite them!

The first iteration of Hansa was focused on providing value to small businesses so that business financial data could be used to help them secure funding when they needed it.

When we realized none of our creditor partners were reporting, we pivoted to make that process as easy as possible.

Once we'd figured out how to report (and built the extensive bureau partnerships to do so) one question still remained... We knew reporting was good for the credit ecosystem, but how can we help creditors realize more immediate ROI from the act?

The current iteration of Hansa leverages a suite of embeddable credit tools on top of our reporting infrastructure.

These tools help drive borrower engagement and retention that results in fewer delinquencies and more repeat borrowers.

Results

Hansa is growing Fast

This combination of credit tools + reporting infrastructure is resonating with creditors. With more of them reporting to the bureaus, it means more high-quality data is shared for the purposes of underwriting. Over time, this means more creditors can underwrite more small businesses.

Hansa has seen dramatic growth over the past year—indicating that we've finally found a market-driven solution to the systemic data-disparity of small businesses.

"Reporting credit data to the bureaus helps us support the longevity of our borrowers’ businesses."

— Sam Twersky
Chief Risk Officer at altbanq

Results & Lessons learned

The importance of reframing "possible or not" to "what would it take?"

It's not easy to get the attention of a forty billion dollar company, especially when that company is a credit bureau and you're a five person startup—but we did it (and then we did it three more times). There's no greater proof that you can accomplish a lot with a little. The key part in that process though—and many of our accomplishments since—was simply asking the question: how might we do this?

That simple act of asking changes the realm of what is possible. And it's a practice I learned to apply at all sorts of scales. Most challenges are solvable with the right resources. Asking what is needed to get there highlights the immense amount you can do with what you have. It helps foster creative solutions that might otherwise have been shut out of the conversation.