As of this year, Novae LLC has become the first Black-owned fintech company to offer Buy Now, Pay Later services to online and offline merchants under the brand Novae Financing. CEO Reco McCambry believes that these services—which are designed to fight inequality faced by minority entrepreneurs by drastically increasing sales for these partner merchants—are the first of their kind.
The volume of sales made using Buy Now, Pay Later technology—also known as BNPL—has been growing exponentially in recent years. BNPL allows customers to make purchases and pay them off over time with little to no money up-front. Importantly, some BNPL offers installment payments without interest and pre-qualification for these installment payments without hard credit inquiries, which can hurt a consumers’ credit score.
Even better for retailers, BNPL giant Klarna reports that when businesses add a Buy Now, Pay Later option to their online store, customers are 35% more likely to make a purchase and spend on average 45% more. The lower up-front price encourages customers to make purchases now that they might otherwise save for later—which every online retailer knows may spell a death knell for the sale. When customers feel compelled to wait until they have more money to pay up-front, they are much more likely to forget the purchase entirely or buy from a competitor.
Novae Financing’s BNPL fintech is built around CEO Reco McCambry’s proposal to make financial success more affordable for Black and other historically disadvantaged customers, for whom centuries of discrimination may mean increased odds of marginalization. This historical oppression leaves them with less access to money they can invest in their businesses, careers, homes, families, and education.
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Financing up to $100,000 for consumers depending on the industry, Novae Financing approves consumer applications with credit scores as low as 515 and offers 6, 12, and even 18 month same-as-cash (no interest) options.
Part of the company’s mission is not only providing access to capital but also access to education and information for entrepreneurs to become more successful; hence, their focus to approve trainers, speakers, coaches, and consultants as merchants to finance their high-ticket programs to help entrepreneurs gain success.
“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?” expressed COO Shaneé McCambry. “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.”
Reco McCambry put forth a similar proposal for a national program in his 2020 book, “The Plan After Police Reform.” As part of a sustainable plan to address inequality, he proposed easing credit requirements and making loan funding available for members of the Black community to help alleviate the impact of decades of discrimination. Now, he’s making such a financing program available through his own company.
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“This is reparations preparation,” says CMO Haziq 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.”
And that’s good news for customers and retailers alike. Customers can expect easier access to BNPL financing, while interested retailers can feel good about offering a social justice oriented BNPL option that’s backed by Novae’s lending partners.
There’s no need to worry about nonpayment with BNPL technologies. In a standard BNPL system, retailers pay a fee for access to the BNPL system, which in turn generates profit for the BNPL’s lending partners. The lending partners then guarantee that the bills get paid, while retailers generally more than recoup their access fees in the form of improved conversion rates and larger average purchase sizes.
