Ned

Providing the infrastructure for small business lending in low income and underserved communities

Company: Ned provides the rails and infrastructure so all types of capital lenders can serve small businesses in low income and underserved communities.

HQ Location & Year Founded: New York, 2021

Founder: David Silverstein, Founder and CEO, started Ned after having served as a senior executive in several large and mid-size media companies. Previously, he was Press Secretary for former U.S. Senate Majority Leader Harry Reid. David is a graduate of Vanderbilt University and NYU Stern School of Business.

Funds Raised and VC Investors: $345,000 from Forum Ventures and angels

• Where did the idea for Ned originate?

The spirit for the business originated during my time working for Senator Harry Reid. It was a once-in-a-career opportunity to learn alongside brilliant people that worked relentlessly to strengthen communities across the country. There was an ethos on that team that we were part of a “good fight” – we fought for those that couldn’t stick up for themselves. I’ve always wanted to help small business owners and I’m building Ned with that spirit in mind. 

About two years ago, I had a conversation with a friend – a small business owner in Brooklyn who is originally from Liberia. He had a hard time getting a loan. He needed to raise a small amount of money but didn’t know how to go about it. This led me to start talking to lenders that are working in diverse communities. I discovered serious market friction whereby SMBs and lenders have a hard time coming together around making a fair and equitable deal. 

• What is the key problem that Ned intends to solve? 

We are starting with lenders who’ve been left behind when it comes to technology. They need a way to move quicker, bring down costs, and assess risk when a basic credit score doesn’t paint a full picture. 

Specifically, there’s a long tail of non-bank lenders, many of whom are non-profit orgs or accept funding from the Treasury Department. These institutions typically have assets under management (AUM) of between $5-$150 million and many lack the systems to do their job. They need affordable tech to help them manage the full lifecycle of a small business loan. 

At Ned, we’re building a set of rails to connect businesses and lenders in more fair and efficient ways. Our platform is an embedded Operating System that gives lenders an affordable solution to more underwrite business owners who have credit issues. Our software allows lenders to look quickly at business performance and assess creditworthiness based on the lender's own scoring criteria. We help to approve and dispense loans by creating an infrastructure layer in the economy which levels the playing field so lenders can do their job and disburse capital at speed.

• How are you most differentiated as a service?

Our platform today offers revenue-based financing in a box, and we’re building out capabilities so lenders can administer any debt product on our rails. 

We worked with five design partners to create a central nervous system for their operation. Since we offer an all-in-one solution, we provide out of box integrations into Plaid, HelloSign, and Astra Finance (ACH). Our embedded portal takes care of applications, origination, and approval for lenders. Plaid integrations power loan qualification and a bespoke scoring system using the lender’s own criteria. Integrated eSignature streamlines contracting, and we then automate disbursement and repayment. Ned drives the agreement from start to finish. 

• What are the company’s key accomplishments to date?

We are in the process of going live with four of our design partners. The platform is working, customers are excited, and we will power our first real agreements in the coming weeks. We also have a top 20 US bank starting paid pilots, in addition to the statewide and community lenders that we are working with. I’m proud that we’re going to remove the friction around loan qualification that’s prevalent for those lenders serving at the grassroots level, or in low-income communities. 

• What lies ahead in the plans for Ned?

Historically, recessions last an average of ten months. Like other early-stage founders, I’m getting ready and raising money with the goal to build within the downturn to emerge stronger. Our business also has an economic tailwind as interest rates rise and millions more business owners will have an even harder time finding money. We’ll be there to provide technology so small lenders that serve low income communities can get through a challenging set of quarters.

Ron’s Take

The majority of the venture-backed fintech companies that have been profiled in this blog have been working directly on the front lines with borrowers and lenders who face challenges with a broken credit score system that exacerbates the wealth inequality problem. It is important to remember that there also needs to be a robust set of infrastructure players on the backend that will be there to support lenders who are serving lower income borrowers and communities broadly. Ned is one such company that has taken on the less glamorous, but vitally important work of enabling lenders to work with small business borrowers that come from a place where it is not easy to borrow in order to start or expand a business. If an increasing number of lenders are finally empowered to serve these overlooked communities, we will see more enterprises that benefit more people and increase overall wealth where it is needed the most.