Able – Small Business Lending

I love the problem they're attacking. I agree completely that early-stage/small business lending is one of the great challenges in entrepreneurship today. "Banks lend money to people who don't need it" rings very true.

BUT --

"How do we do this? First, we examine data from a business’s customers through the collection of reviews, check-ins, and connections that have already been generated across social media."

I strongly disagree that this is the right solution. This is essentially taking the underwriting process and shifting it from banks to...social media users? Honestly, as much as I have distaste for the small business divisions of most banks, it pales in comparison to the distaste I have for the collected "wisdom" of (most) Yelp reviewers and Foursquare Checker-Inners. "The food was outstanding but the server made one mistake -- 1-STAR!!!"

So now, what they're saying, is that not only does a bad review have the potential to hurt your ability to gain new customers, now it can hurt a business' ability to get credit and financing.

I genuinely think they're onto something here - and I think they're working on a critical problem - but I think using social media reviews (in their current form) as a credit signal is a mistake and the wrong approach.

Maybe Able might have the same outcome as Outbox which closed recently.

There are many unanswered questions here as to what happens if a small business does bankruptcy.

Well that's a giant 180.