After answering a long list of questions and waiting 10 minutes with his young kids in tow for the application to be processed, Levertov was turned down.
“I realized after this process, it’s not only me that got declined, but 50% of people get declined,” Levertov said.
Levertov, 43, said the experience made him realize that many services in the buy now, pay later industry don’t help consumers when it comes to necessities.
So, Levertov and his business partners created Westwood-based Sunbit Inc., a buy now, pay later company that offers immediate approval for shoppers in need of quick funds for things such as dentist visits and car repairs.
“When people need money when they buy groceries, fix their car or go to the dentist … (the process) is still stuck in the ’50s … which means basically if you need money, you apply for a credit card,” Levertov said. “It takes a lot of time.”
Sunbit offers instant funds ranging from $60 to $8,000. Around 90% of people who apply for funds get approved, and the amount they receive is based on a soft credit check that takes less than a minute, Levertov said.
Once a down payment is made, customers can choose to make payments over three months, six months or 12 months.
Unlike credit cards, which require hard credit checks that impact credit scores and often turn people down, buy now, pay later companies make the option of paying for goods over time accessible to more people by having higher acceptance rates and using soft credit checks.
Buy now, pay later services such as Klarna Bank and Afterpay Ltd. are available for online purchases of apparel and high-end products through brands such as Ugg, Anthropologie and Fenty Beauty.
Sunbit, which can be used online and in a store, is more akin to Affirm Inc., which will send virtual Visa cards to approved shoppers for in-person purchases.
But Sunbit is unique in that it’s available for necessities rather than “nice-to-haves,” Levertov said.
Merchants need to be partnered with Sunbit in order for customers to use the platform. Its main partners are automotive repair shops, dentists and eyewear companies. Those merchants run the process for consumers who don’t have the funds available to cover a bill.
Customers must submit applications to get funds for each individual purchase using Sunbit but can get approved for multiple purchases at the same time. The number of purchases a customer can get approved for at one time depends on the individual.
Levertov launched Sunbit in 2016 with co-founder Tal Riesenfeld, 43. They relocated to California from the East Coast to start the company and decided on Los Angeles over San Francisco due to the abundance of both technology and retail.
Dean Kim, executive director of equity research with Playa Vista-based William O’Neil & Co., said that as online shopping has expanded amid the pandemic, buy now, pay later has grown along with it.
Kim said Melbourne, Australia-based Afterpay is a leader in the space. The company partners with more than 50,000 merchants, saw sales skyrocket 112% in fiscal 2020 and grew its customer base 116% to nearly 10 million in the same time frame.
As more players enter the buy now, pay later category, Kim said, partnering with more merchants will be key for Sunbit and other companies providing similar products.
“(Sunbit) has a bit of work to do in terms of building up their merchants,” Kim said. “But I wouldn’t be surprised if they gained traction.”
Many of Sunbit’s clients are service providers and brick-and-mortar merchants. The company has partnered with nearly 7,000 merchants across 46 states and has logged 400,000 transactions since launching five years ago.
Sunbit initially worked with local businesses but has launched partnerships with national merchants, including Honda Motor Co., Kia Motors Corp., Cycle Gear Inc. and Eyemart Express.
“We’re really focusing on this huge vertical, which I will say is not a sexy vertical,” Levertov said. “But if you need to fix a car or to go to the doctor, many of (those businesses) are stuck with old technology, so that’s what we do.”
Sunbit charges merchants transaction fees and, for some industries, a monthly technology fee.
The company also collects interest on certain purchases that take more than three months to pay off. The amount in annual interest is based on where the product is purchased and the customer’s state of residence, ranging from 0% to 35.99%.
Ruben Serna, parts and services director for Rock Honda in Fontana, has used Sunbit for the past four years. When the service was first presented to him, he said he was impressed by how quickly a customer could qualify for funds. He implemented Sunbit at Rock Honda and later brought it to eight other Honda locations in Southern California.
Serna said one of the biggest obstacles customers face is not having money to pay for car repairs. Sunbit solved this problem, he said. He attributes between $60,000 and $90,000 a month in Rock Honda’s sales to Sunbit.
“It’s only helped my business grow over the years,” Serna said. “It’s a proven process.”
As Sunbit’s merchants are mainly essential businesses, the company has been able to grow amid the pandemic. It had its “strongest months ever” in sales in April and May, Riesenfeld said.
“Now more than ever before … your customers are going to need help, and when people need to decide between paying their rent and fixing their car, those are hard decisions,” Riesenfeld said.
Levertov’s goal for Sunbit is to continue to grow its customer base and merchant partnerships. He and Riesenfeld want Sunbit to become as commonly used as credit or debit platforms.
“At the end of the day, we call the company Sunbit because we want it to be like, credit, debit, Sunbit — where people think about it as a way for paying for things,” Riesenfeld said. “I really want for this to become a term where people say, ‘You can Sunbit it,’ which basically means you pay over three, six or 12 months.”
“Our goal is to reach as many Americans as we can to help them in the things that they really need and become a brand name that people recognize,” he added.
For reprint and licensing requests for this article, CLICK HERE.