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AND MORE ARE CONSIDERING IT.
GERRI: INTERESTING.
AFTER THE FINANCIAL CRISIS
BUSINESSES HAVE SCALED BACK
SIGNIFICANTLY THE MORE
ALTERNATIVE EXPENSIVE
BLUNDER HAS SURFACED NOW PAY
POWELL HAS A LOW-COST
LENDING PROGRAM FOR THOSE
WHO ALREADY USE THEIR
SERVICE.
WE HAVE A WORKPLACE ATTORNEY
, THE MADISON.
HOW DO THESE WORK?
>> E ESSENTIALLY WHAT PAY
PAUL IS DOING IS LOOKING AT
THE PREVIOUS HISTORY FROM
PEOPLE THEY WORKED WITH IN
DECIDING WHETHER OR NOT TO
INVITE THEM TO ENJOY THE PAY
PELL WORKING CAPITAL TO
ALLOW SMALL BUSINESSES TO
REQUEST A LOAN AND RETURN IT
BACK WHAT THEY'RE DOING IS
TAKING A PERCENTAGE OF THE
REVENUE TO GET A SMALL FEE
THAT ENCOMPASSES THE PROCESS
GERRI: INSTEAD OF GETTING
THE INTEREST-RATE WITH THE
BANK AND YOU HAVE TO PAY
INTEREST BUT INSTEAD YOU PAY
A PERCENTAGE OF THE REVENUE
AND YOU CHOOSE THAT.
AND TELL WHAT WOULD BE THE
INTEREST RATE IS PAID BACK.
PATE HOUSE SAYS THIS IS A
LOW-COST ALTERNATIVE.
DO YOU BELIEVE THAT?
>> IT DOES DEPEND IF YOU ARE
THE SMALL BUSINESS OR A BIG
BUSINESS BUT FOR SMALL
BUSINESSES YOU CAN IMAGINE
BANKS HAVE VARIOUS FEES ALSO
A CREDIT HISTORY AND YOU MAY
HAVE A HIGHER INTEREST-RATE
WITH RETURNING THE FUNDS BUT
WITH PAPER TOWEL -- PAYPAL
YOU CANNOT DETERMINE YOUR
PERCENTAGE THAT MEANS IT IS
CONFIDENT YOU WILL MAKE
REVENUE IN BE ABLE TO RETURN
THE FEE.
THEN IT MAY BE TO YOUR
BENEFIT.
GERRI: IT IS A SYSTEM THAT
IS LIKE A FAKE WALL AT YOU
CAN USE IT AS AN INDIVIDUAL
OR AS THE COMPANY IF IT IS
AS A COMPANY PEOPLE CAN PAY
YOU ELECTRONICALLY SO THE
FACT THEY SEE THESE
TRANSACTIONS THEY KNOW IF
YOU ARE A GOOD CREDIT AND
THE MONEY COMING IN SO THEY
CAN ANALYZE IF YOU CAN PAY
BACK THE MANY.
WE HAVE SEEN A LOT OF MODELS
FOR LENDING PURPOSES ONLY
MAKES SENSE BECAUSE OF WHAT
HAS BEEN GOING ON WITH THE
BANKS?
THEY HAVE BEEN VERY STINGY.
>> YES.
WHAT PATE PAL IS DOING IS
USING THE CURRENT CUSTOMERS
TO MAINTAIN THOSE
RELATIONSHIPS IT IS
IMPORTANT WHEN IT COMES TO
BUSINESSES BUT BANKS OUR
WARY TO LET OUT LOANS AND IF
YOUR ONLINE AND DON'T HAVE A
LOT OF MONEY TO PAY FOR
EXPENSES IF YOU DO GENERATE
$20,000 THAT IS NOT ENOUGH
FOR THE BIG BANKS' LOAN YOU
COULD GET A SMALL AMOUNT TO
PAY FOR THAT IN THEN BE ABLE