What Traditional Financing Gets Wrong About Small Businesses

Welcome to Money Isn’t Everything. I’m Mary Wisniewski, Cornerstone Advisors editor-at-large and host of the show that explores early-stage ideas that could, if not already, shake up financial services.

Today on the show is Amy Low, who is the chief marketing officer at Pipe.

Pipe is a fintech company that offers small businesses capital through their software platforms.

We chat about tariffs and small businesses, Pipe’s recent acquisition of Glean.ai, and how to make career moves in a purposeful way.

Here’s our conversation.

Amy, welcome to Money Isn’t Everything.

It’s so good to see you again.

Great to see you, Mary.

Thanks for having me.

Yeah.

I mean, there are so many things to talk about because you are so positioned to know small businesses’ challenges and needs.

What an important time right now to talk about that with the tariffs on-and-off-again storyline.

But I just want to level set the conversation to begin with and define, you know, everyone has a different definition of a small business.

So I want to know how you’re thinking about it at Pipe.

How do you define it?

Yeah.

So, I mean, I know small businesses is such a broad term.

There are over 33 million small businesses in the U.S.

How we think about the small businesses that we serve today are really kind of like the people, the small businesses that are opening a restaurant or retail shop, or a contractor that comes into your home to fix the leak in your roof.

We partner with software platforms that serve these end small businesses.

Pipe is able to provide financial services that are embedded directly into their platform.

We have partners like Boulevard, Priority and GoCardless.

We’re able to serve their end small businesses who use those platforms today.

It’s something I’ve heard.

I’ve covered fintech for a while, and so it’s funny what still is a challenge in the industry.

Over the last 10 years, I’ve always heard, oh, small businesses are underserved from their banks, or in theory, their credit union.

It still seems to be a sleepier area compared to the consumer side of things.

But I’m kind of curious.

What do you think has been the holdup?

Or what do you still identify as some of the biggest challenges that you see for small business?

Yeah.

So I’m actually coming off the back of shooting a week-long content series where we got to visit some of the small businesses that Pipe has served.

A couple of things really resonated with me.

We interviewed a man who replaces water pumps, and he was actually telling me that going to the bank to get traditional financing wasn’t even an option for him because he was a veteran.

He was saying that what’s worse than having a bad credit score is having no credit score.

He doesn’t have a FICO score at all.

There are so many small businesses, especially those that are immigrants or who just haven’t built up enough credit over the years, to access those traditional loans that you would go to the bank for.

What’s unique about Pipe is that we’re able to use their revenue and their merchant history data and provide access to capital and underwrite them, capital up to $200,000, something that they’re never able to access in the traditional financing world.

I still do think small businesses are a very underserved segment today, and that’s what Pipe is hoping to solve.

What do you think is missed from the banking industry on the small business?

Maybe it’s even understanding the kind of clientele, but what do you think are some of the gaps here?

Yeah.

So, I mean, the traditional banks today, they’re still using the old methodologies of needing personal guarantees or needing credit scores.

That’s still the basis of what they use for underwriting.

Through our partners, we just have so much more access to data, and we can use that data to predict what that customer’s revenue and what their business is going to look like in the next 12 months.

The banks just don’t have access to any of that data, or they’re not, I would say, tech-savvy and sophisticated enough to really ingest all of that data.

They’re using a completely different set of requirements for underwriting.

We’re just able to see so much more rich data from our partners and able to offer credit in a completely different fashion.

Yeah.

The data thing is so interesting.

I even heard an anecdote of a credit union which didn’t know the average age of their members, which I’m like, wow, that’s surprising as an outsider.

But I think it demonstrates the room for improvement.

We ask for a very basic set of data, and we have an amazing risk team here.

But just using that data, we’re projecting that next 12 months of what that business is going to look like, and we’re able to offer credit based off of the different risk ratings that we’re able to see from that data.

So it’s really, really fantastic.

It’s the most, what we say, unbiased data because it doesn’t require all this personal history.

Now, Amy, it’s really interesting to predict this all in a year that is so freaking chaotic.

The word of the year is uncertain, of course.

But I’m seeing so many headlines around small businesses getting hit hard by the tariffs and feeling really freaked out about what’s next.

I’m curious, what are you hearing?

What are you seeing?

What do you make of this extra chaotic year?

Yeah.

So, I mean, this is something that we’re monitoring really closely at the moment.

I think on a macro scale today, our team has already started to see from a lot of the public reports that consumer spend is starting to decline.

Luckily, we haven’t seen any of our partners’ revenue data really drop yet since we’re constantly ingesting our partners’ data and using that to see, how do we adjust credit that we’re offering to small businesses?

Luckily, we haven’t seen that decline yet, but we are bracing for some declines just given what we’re seeing.

But on the small business front, we have a merchant support team that talks to small businesses all day long.

They’re essentially educating them about their offer that they’ve gotten from Pipe, how that works, how it differs from a bank loan and whatnot.

Small businesses are concerned about it.

In fact, we’ve actually seen a couple of cases where they’ve proactively mentioned that they want access to the capital now to make a really big purchase in inventory because they know that tariffs are coming and that they’re really going to get hit pretty hard.

Those are the stories that we’re starting to hear, where small businesses are gearing up for the impact of tariffs and potentially a recession.

Capital is more important than ever right now to make sure that they’re prepared for this upcoming season.

Yeah.

No, that’s interesting because I was thinking that’s the first move a small business probably wants to make, make sure they have enough capital.

I’m curious too, and this is separate.

This has been more like a TikTok trend, but I’m also seeing articles on Glamour about it.

Another phrase that seems to be trending with consumers is “recession indicator.”

They’re talking about cutting back on their nails and their hair, thinking it’s more expensive.

But am I remembering this right?

You work with nail salons.

We do.

We do work with Boulevard as one of our partners today.

We haven’t seen any of that data as of April really decline.

But I would expect that it will probably see some decline since those are some of the services that may be more optional.

Who knows?

It may be more optional.

But I will say, another one of our partners, they’re serving contractors in the field services industry.

That I anticipate may not be hit as much because if you have a leak in your roof, you’ve got to fix it, and you’ve got to call someone to come fix it.

So it’ll be really interesting to see how this data really changes across different verticals.

This just popped in my head from what you just said, and this is a tangent.

I know this is more for consumers, but I also know small businesses sometimes are running off their own credit card or whatever.

Do you see any data that shows that a small business owner is using buy now, pay later in any capacity?

You know, I’ve heard it more on the consumer side.

That’s not something that I’ve heard.

But I will kind of touch on what you said, that small businesses, their business and their personal finances are very intertwined.

They’ll often use their personal credit cards to pay for certain things here and there.

Then when it comes to end-of-year tax and all of that, it just becomes a nightmare to reconcile.

So trying to get a complete view of a business’s finances is something that Pipe is really aiming to do.

We just recently completed an acquisition of Glean.ai and their spend management, and that’s powered by AI.

We’re integrating that into our platform to be able to do this better for small businesses.

Yeah.

I want to unpack that a bit more.

But before I do, I’m just thinking about how even for a work trip, I put it on my credit card.

Too expensive.

I’m like, I can’t imagine being a small business owner putting all those expenses.

That’s the ultimate junk drawer.

That would be awful.

But yeah, let’s get into Glean.

What does that allow Pipe to do that it couldn’t do before or can do more of now?

And yeah, I want to learn more about the data that you’re gaining.

Last fall, we came out with the Pipe Business Card.

That’s really aimed to act like a business credit card, but it’s actually a 30-day business charge card.

It has a lot of the benefits that you would expect from a credit card company, like a percentage of cash back.

We’re also offering things like a float, which gives you additional time at the end of your statement to actually pay off that balance.

So we launched that late last year to incentivize small businesses to then use that charge card to consolidate the spend into one place.

With our recent acquisition of Glean.ai, we’re able to integrate even more spend management capabilities into it so that it becomes a more holistic solution.

We use companies like Brex and Ramp for corporate companies, but small businesses just don’t have access to something like that today.

That’s what Pipe is really aiming to solve.

If you think that a small business now has a branded card from their partner, they could use customizable rewards where they’re able to get, you know, 10x cash back on Whole Foods or Home Depot or something like that.

It consolidates all their spend into one place, but then it’s also actively reconciling all of those expenses at the same time.

For example, you could make a big purchase at Home Depot, take a picture of it, and it’ll send it to Pipe.

Then we can automatically suggest that this expense may be categorized for this specific job.

You can quickly swipe through and categorize that because small businesses are spending hours reconciling all of these expenses at the end of the day.

We’re just trying to make that really, really easy and magical for them so that they don’t have to think about it.

Yeah.

That’s another awful chore.

There are so many awful chores.

I wonder too, do you think that helps keep people honest with what they’re expensing, that kind of thing?

Or does that come up with small businesses?

Are they concerned about granting an employee permission to use a card and then worry?

Absolutely.

I think that this is also a budgeting tool as well.

If you only want to budget X dollars for this specific area, such as travel or supplies or something like that, it’s helpful to keep track of that.

If you’re also granting employee permissions as well, you want to keep tabs on how much they can spend.

That’s definitely coming as well in terms of giving more access controls into different spend categories for specific employees.

But what’s really neat about what we’re building as well is that it’s going to give you a lot of spend insights.

So you know what you’re spending on this category.

This has increased 20% month over month, for example.

That’s something that we want that business owner to know and see and potentially take action on.

That’s something that’s going to really help in this sort of, tying it together, looming recession that we may be entering.

Not only is the money in that’s coming out really important to monitor, but also how much you’re spending as well.

We want business owners to feel really empowered with a lot of different insights and trends that they can take action on so that they can make their business more profitable.

Yeah.

I bet that’s a real reveal sometimes too because sometimes you’re just not really thinking about it, and then you see, oh, that’s the number.

That’s really powerful, being able to see those reports and see those trends go up and down over time and really take action on those.

Amy, I’m curious because of your position.

What is an effective way to market to small businesses?

They’ll find you because they need capital, so certainly that is a marketing technique in and of itself.

But yeah, tell me more about what works with trying to engage with the audience.

Yeah.

So, just a little more background on me.

Prior to Pipe, I spent the last eight and a half years at Square.

I have been marketing to small businesses for almost a decade now.

My learning is that when you’re really trying to market to them, you really want to market to them when it’s most contextually relevant.

So, being inside the platform they are in every day, when they see that they’re going to pay payroll and that at the same time they’re preapproved for, you know, $10,000, that’s going to help make that payroll so much easier.

Within the product, within the context of the product, is really important.

What’s also really unique about what Pipe is doing too is because we’re ingesting all of that data from our partners, we’re able to pre-approve specific offers for that individual merchant.

Those are all personalized and individualized and pretty much guaranteed to have.

The only caveat is they still have to pass requirements like compliance and whatnot.

But if you’re preapproved for $100,000, there’s like a 98% chance that you’re going to get $100,000.

That’s pretty amazing as well because we don’t make this end business owner jump through different hoops and apply for credit checks and things like that to make sure that they get that money.

So letting them know at the time of need and giving them an actual preapproved offer that they know and can trust that they’re going to get, that’s going to really help increase the conversion and take rate of what we’re offering today.

Yeah.

It’s like a funny version of product placement.

I mean, that’s exactly what it is.

And you referenced Square and your work there, but this brings me up to one segment of the show called “That’s What You Said.”

So I’m pulling this up.

It’s more about career things because I saw that you said, “I thought that if I just worked hard enough, someone would notice and offer me the right opportunities. But here’s the reality: no one is going to give you what you want unless you’re vocal about it.”

Totally.

Yeah.

Let’s talk about it.

I’m kind of curious about how you think about vocalizing for what you need and deserve, and how maybe that’s changed over the years from your early days at Square to now at your role at Pipe.

Yeah.

So I would say that early on in my career, I’ve been really fortunate to have some really incredible mentors at Square.

I’ve had amazing bosses who have really looked out for my career there.

I got to hold so many different leadership roles at Square, and it wasn’t really by accident.

Each time that I was excelling in a role, I was really excited to take on a new challenge.

When there was something that was unsolved in the organization, I was usually the first person to raise my hand and say, “Let me tackle that. I’m interested in helping. Let me know how I can help.”

Usually that’s sort of how I got to expand my role over time, tackling interesting problems that maybe weren’t directly in my purview.

There are specific times where I actually just kind of raised to leadership that I want to take on something new.

I’ve done this for a few years.

I’m really interested in learning about this specific area.

For example, transitioning into product marketing.

I really wanted to get closer to product and really understand how product development happens.

Connecting with leaders within the organization and trying to find areas to get involved, that actually helped me land different leadership roles along the way.

I love that.

And I love that you said it wasn’t by accident.

I recently was listening to a Modern Love podcast.

They were interviewing Miranda July, who wrote a standout book on perimenopause, putting that out there.

She blew up from the book.

Well, she was already famous, but certainly got more recognition for this.

She was telling the interviewer, “Hey, some people ask her, how did you ever imagine your little story would go so big?”

Then she said something like, “This was intentional. This was actually the plan, so this is the outcome.”

Totally.

I think it’s really important to write down what are some of your career goals in the next year, next three to five years, and just revisit that over time and see if you’re actually taking the right actions, taking the right projects, for example, to get you to those different goals.

My recommendation for anyone in marketing, or anyone in particular, is just that you be really clear about what you’re optimizing for and what you really want and be open about it with the people around you.

If you don’t make it known, it’s never going to happen.

If you do make it known, at least you can work with the people around you to see how you’re actually going to get there.

I’m plus one.

Amy, just two questions for you.

One, tossing the ball to you.

Is there any other area you want to bring up or any takeaways for small businesses as they look at this rocky road ahead, at least for this year, probably longer?

Also, how should someone reach out to you if they want to connect?

I’ve seen small businesses really go through the ups and downs.

I’ve seen the ups and downs during COVID.

So my advice for small businesses is, be really creative.

I think that’s what’s really unique about your role today.

Whether it’s thinking ahead on how you can get really creative around purchasing inventory, or is there actually a new revenue stream that you didn’t consider in the past?

I’ve always been really amazed to see what small businesses are capable of during rougher times and the innovation that they’re capable of.

And yeah, to get in touch with me, just reach out to me on LinkedIn.

My email is also super easy to remember.

It’s just amy@pipe.com.

Shoot me a note and I’m happy to connect.

Well, thank you for that.

My last question is, what is the image on your phone’s lock screen?

It is a picture of my two kids.

They are four and six years old.

I have a four-year-old boy, six-year-old girl, and they keep me very busy after 5:00 p.m.

Oh, I bet they do.

That’s really sweet.

Well, Amy, thanks so much for being on Money Isn’t Everything.

It’s been real fun chatting with you about small businesses and technology.

Oh, thank you for having me.

Yeah, it’s a pleasure.

So, one thing that stood out is how Pipe is already getting some small businesses seeking capital now to make a really big purchase in inventory because they know tariffs are coming and that’s really going to hit them hard, probably.

In two weeks, I’m in conversation with Elizabeth Osborne, the COO of Great Lakes Credit Union.

We’ll be talking about open banking, GenAI, and more.

Catch you then.