Originally from Delhi, India, entrepreneur Rohit Arora is the CEO and co-founder of Biz2Credit, an online platform which helps entrepreneurs get loans for their small businesses. Since the launch of the platform in 2008, the company has surpassed $1 billion in small business financing deals. Rohit took some time to talk to New York International at his 7th Avenue offices about his experiences as an entrepreneur in New York City.New York International: Can you tell me a little bit about yourself and why you came to the US?Rohit Arora: Prior to coming to the US I was working for a global private equity fund in Singapore and basically was just looking for a career and education change. So I came to the US in 2003 and went to school at Columbia University doing a joint master’s in finance and in business administration. After that, I started working at Deloitte Consulting in the area of business strategy.NY Intl: So what gave you the idea to start your own business?Rohit: Being in NYC, I noticed that it’s becoming more and more diverse and is a big hub for small businesses – there are a lot of mom and pop shops and a lot of economic activity in every neighborhood of all five boroughs. In 2006 I was doing a research project on the profitability of banks portfolios – this was at a time when mortgages were a big thing, everybody wanted to have a hand in the mortgage business. But in my research, I was surprised to see that in the last 10 years, banks had made more money in small business lending than in mortgage sales. So I started digging deeper to and found small business owners telling me that they could get a mortgage easily, but they were struggling to get loans for their business.I was surprised – small businesses are contributing so much to the GDP of the city and the country – why isn’t anyone providing them with the means to do things in a secure manner online, without having to struggle and run from bank to bank? Small business owners are very busy people, they don’t have much time, and don’t have CFOs. So my brother and I decided to do something about this, and we began Biz2Credit in 2007.NY Intl: And what does Biz2Credit do? If you had to explain it in two sentences how would you sum it up?
Rohit: Biz2Credit is an online credit marketplace for small businesses who don’t have an in-house CFO. We help them get access to the best financing options for their needs at any given point in time and help them to execute on that.NY Intl: How does Biz2Credit get around the fact that when people are new to the US, they have no credit history to show that they can borrow responsibly? Do you have a special arrangement with the banks?Rohit: Typically, a lot of banks will not even look at you if you’re new to the country, even if you have recent credit history. So we have partnered with institutions like Accion USA, the Center for New Americans, and other micro-lenders. The focus is to help these small businesses to get either startup capital or capital in the early stage of their business.This helps them to get capital so they can grow their business and enables them to establish a credit history, so they can get loans from traditional lending institutions a few years down the line. These are the businesses which create most of the new jobs. So at the end of the day this is a good economic multiplier for states and cities. Now we are working with the economic development corporations in various cities to figure out how we can channel more dollars toward these undersold market segments.NY Intl: Is there one particular group or type of small business that you focus on particularly which you found has the most need of help in this area?Rohit: Immigrant women entrepreneurs – discrimination against women entrepreneurs is already tough so when you add the factor of being an immigrant, it gets even tougher. When we started the business, my brother and I had originally focused on immigrant- and women-owned businesses, but because of the financial crisis, we started getting a lot of mainstream small and midsized businesses on our platform as well. Today around 50% of our client base is made up of women, immigrants, and minority groups.NY Intl: Were there advantages to starting up this kind of business in NYC as opposed to elsewhere?
Rohit: I would say initially it was tougher in NYC because it is a very expensive place to start a business, but one reason we stuck with New York was that when building a business the key is being close to your customers – that’s how you get the know them, and learn, and adapt. We were told that to start a tech-based business we should start in Silicon Valley, but we found the density of small businesses across the US is the largest in the Tri-State area. So, that was a major draw as well as New York being a financial hub and the fact that in New York more than 51% of businesses are owned by immigrants already. It’s very easy to scale it up across the country from here.NY Intl: Did you encounter any particular hurdles starting Biz2Credit because you were international?Rohit: I think like any person coming into a new country and starting a business, people have misgivings because initially they aren’t even sure how long you’ll be in the country. Are you going to stay here, or go back home? Even if people don’t say that to you, that’s on their mind, so they have a hard time trusting you as a business. Like with any business you start, you have to stick it out. Don’t be the flavor of the month – show your conviction and self-belief otherwise nobody else will trust you.NY Intl: What advice would you give to internationals looking to start a business in NYC?Rohit: Three things:First: In New York, the costs are very high and you can burn through your capital quickly. Plan very carefully to keep your costs low. One of the things we did was when our business started growing we moved into a big office in the Flatiron district and a lot of our money went toward rent. When the recession came we had to move. So don’t spend a lot of money setting up an office in a big space. At the end of the day your clients aren’t going to be impressed by your office, they’ll be impressed by what you can deliver.Second: Leverage the strengths of New York. New York is a media hub, lots of national media outlets are here, and we should use that to its fullest. You can use the media to build up your credibility without needing to spend lots of money.Lastly: Be smart in hiring people. This is a diverse city – your workforce should reflect that diversity. Bring in people who speak many languages and are from different cultures, it will help your company to gain a more global perspective.NY Intl: What advantages do you think being international has given you?Rohit: When you come to a new country you have very little support, so you have to go in and do things on your own – that makes you more aggressive and gives you a more go-getter attitude, it gives you more drive. Also, being multi-lingual is always an advantage. Personally we work with a lot of people in the South Asian community, and speaking the same language is a big advantage in gaining trust and reaching clients who don’t speak much English.NY Intl: What do you think the NYC government could do to help make life easier for international entrepreneurs?
Rohit: Make accessing resources easier and the process more transparent. Guidance has to be there, the city has centers where people can get help, but what they don’t realize is that a lot of immigrants who come here have a job and they’re starting a business on the side. They don’t have the time. Things need to be put on a platform where they can access the info on evenings and weekends. Help on Monday through Friday, nine to five doesn’t work.The government should utilize online platforms like ours. The city should uniquely use the technology in this area and should be multilingual. Biz2Credit has a Spanish platform and we have staff who speak 15-20 languages. Multilingual support is necessary, you can put all well-meaning stuff out there and nothing is going to happen if people can’t understand it.NY Intl: Is there a particular type of small business NYC should focus more on helping?Rohit: I think the government should focus more on the type of businesses New York City is known for. Tech startups look cool, but there’s too much focus there. I’m a tech startup, I know, but tech startups are only a very small percentage of the businesses in the city. There’s glamour in tech companies, but we need to realize that they aren’t great job generators and rarely scale up. I’m not saying we should ignore tech companies, but there are a lot of other small businesses in New York which are thriving and can become really big with the right support. There’s a lot available for tech businesses, I don’t think they need any government supportThe government should make life easier for technology-enabled businesses like retailers, food businesses and tourism related businesses. I think we cannot become a new Silicon Valley – we should use our strengths in New York. You cannot become great by aping somebody else, you can only become great by doing something unique.