Fintech startups have taken note of the vast opportunity in the SME space, which has been underserved by banks since the financial crisis. Add to this the growing number of  freelancers and independent contractors, and the market becomes even more attractive.

“Small businesses are extremely profitable banking customers,” Trevor Dryer, CEO of Mirador, an SME lending platform, told Bank Innovation. “SMEs tend to use a lot banking products, including corporate credit cards,” he said. They also tend to rely on third-party service providers for things like accounting, cash flow management, and bill pay, etc. And yet, this sector does not get enough attention from larger banks.

This is particularly true when it comes to SME lending. The average SME loan is $200K or less, Dreyer said. And given the expensive underwriting process and the regulatory requirements for a commerical loan of this small size, larger banks tend to view this service as not profitable.

This is good news for nonbank lenders, who can step in to serve this underbanked population. There are plenty startups in this field taking advantage of that opportunity, whether that’s in SME lending, cash flow management, bill payment or accounting.

Here are three startups in the SME lending space that Bank Innovation is watching.

Sperse

Founded in September 2016, Sperse is a cashflow management platform. The platform is cloud-based and helps small businesses monitor their cash movement in realtime.

Unlike accounting software such as Intuit’s QuickBooks, Sperse focuses exclusively on cashflow management through its core product called Cash Flow Outlook or CFO. Additionally, CFO combines realtime data as well as historical transactions to provide its SME clients analytics and predictions on how they can better manage this aspect of the business.

See how Sperse CFO works here.

Based in Phoenix, Ariz., the company has not announced any major funding to date. It is set to demo at the Finovate Spring conference in Santa Clara today. (Stay tuned for more coverage on this from Bank Innovation).

BlueVine

Based in Redwood City, Calif., BlueVine is an SME lender, with two core products: line of credit and invoice factoring.

Last week, BlueVine secured a $200 million asset-backed revolving credit facility from Credit Suisse, which it will use to write more loans.

A few months before this, the company increased its line of credit to $150,000 from $100,000, and doubled its invoice factoring credit line to $5 million.

Last year, BlueVine surpassed its $500 million loan origination goal for 2017, BlueVine CEO Eyal Lifshitz, CEO for BlueVine told Bank Innovation. Lifshitz did not disclosed the goal for this year.

BlueVine serves small businesses, typically those with at least 5-10 employees. Their average client has between $600,000 – $700,000 in revenues, although they serve businesses with smaller revenues as well.

Zuma Liquidity Solutions

Based in Santa Monica, California, Zuma is a white-label automated lending platform marketplace that gives institutional and alternative lenders access to candidates across five sectors, including SME.

The company has not announced any fund raising yet, but said it is in talks with banks and potential lenders to launch its liquid solutions product, which will focus on invoice financing for small businesses.

Zuma will also be showing its product at Finovate Spring later today. (More on this from Bank Innovation).

Of course, there are many other nonbank players in the SME place, including payments company Bills.com or lending platform Mirador, to name a few. And while larger banks have not been active in this market, that is likely to change.

According to a report by S&P, the SME lending space will continue to grow for the next five years. And as SME lending increases, so will the need for other products and services catering to the financial needs of small businesses. It will be hard for larger banks to not stop and take note of this market.