Novae L.L.C. will become the first Black-owned fintech company to offer Buy Now, Pay Later (BNPL)services to online and offline merchants under the brand Novae Financing.
Novae CEO Reco McCambry believes BNPL services, designed to help fight the inequality minority entrepreneurs face, are the first of its kind in the fintech industry. BNPL allows entrepreneurs and customers to make purchases and pay for them later without interest or pre-qualification through credit checks.
“If millions of people can finance a college education to get a job, then why can’t the average entrepreneur finance a course to help them excel in their business?” COO Shaneé McCambry told Black Business. “This will make life-changing information more accessible, the goal is to help customers invest money now, so they can make money later and pay off the debt early.”
According to Klarna, a Swedish fintech company, when companies add a BNPL option to their online stores, customers are 35% more likely to make a purchase and, on average, spend 45% more.
Novae’s BNPL is part of McCambry’s pledge to make financial success more affordable for Black and minority entrepreneurs who have less money to invest in their careers, businesses, homes, family, and education due to decades of discrimination and oppression.
Additionally, Novae offers access to educational courses and information to help entrepreneurs succeed. Novae has a number of trainers, speakers, consultants, and coaches to help entrepreneurs get their businesses off the ground and grow.
According to a Guidant Financial survey, 38% of African Americans say the biggest challenge facing their business is a lack of capital and cash flow. Novae CMO Haziq Ali told Yahoo Financial the company is doing more than just providing a service to its customers.
“This is reparations preparation,” says Ali. “If we have nothing but emotion and passion and no economic plan—we end up like Haiti. We all know the middle class is in danger, but awareness isn’t enough—so Novae’s plan is to prepare our people for home and business ownership excellence.”
Nonpayment isn’t an issue for Novae customers either. In a BNPL system, retailers pay a fee for access to the BNPL system, generating profit for BNPL’s lending partners. The partners will guarantee the bills get paid, and retailers typically recoup their access fees via improved conversion rates and larger average purchase sizes.