COLUMBIA, SC (August 15, 2018) - South Carolina Community Bank rebounded from the financial crisis by developing a new network of Fintech partnerships.
“As a small bank, we don’t have a large innovation lab budget; we don’t have the thousands of people focused on product development that large banks have,” CEO Dominik Mjartan said. “But we do have some very good partners we’re working with that could really transform our ability to innovate and then scale the innovation.”
NEW YORK, NY (April 4, 2018) excerpt via FORBES - The world of small business lending can be mystifying and immensely frustrating to entrepreneurs, with copious misinformation from predatory online lenders and questionable sources.
Levi King at Forbes presents a guide to dispelling common misunderstandings about business loans, and what it takes to qualify for one. He describes his dismay at the proliferation of misleading online articles, “perpetuating business credit myths and misconceptions that cost me thousands of dollars when I was starting my own small business. This bad advice is continuing to cost American entrepreneurs millions of dollars each year -- and, for many of them, their dream.”
King additionally reports that only 46% of business owners are satisfied with loans from online lenders, according to a study by the Federal Reserve Bank of New York, illustrating the significant problems that come with the convenient but predatory online lenders.
NEW YORK, NY (March 27, 2018) excerpt via THE FINANCIAL BRAND - Community banks are the most desirable source of financing for business owners, with significantly lower costs and greater transparency than the proliferation of predatory online lenders. However, the lengthy loan application process and challenge of bringing in new clients have held small banks back from serving more of the small business community.
The future for small business lending blends the best of both worlds - community banking and technology. Neill LeCorgne at The Financial Brand writes:
New technology innovations are available that eliminate data entry by scanning in tax returns, automate the spreading of financial data in minutes, price loans faster and more consistently, and score a loan using customized credit factors. What used to take days and weeks to approve and onboard a small business loan can now take organizations hours (or minutes), making quicker decisions available to borrowers who are eager to move forward.
Not only can deploying technology make the process more efficient for bankers and therefore quicker for borrowers – automation of certain steps in the process can also provide a more simplified, enjoyable experience for borrowers.
LOS ANGELES, CA (September 27, 2017) excerpt via The Los Angeles Times - Mark Newman needed some fast cash last October to keep his small Studio City wine-importing business afloat. He went to his main bank but was rejected for a loan because of his relatively low sales.
So Newman, 61, turned instead to an online lending company called OnDeck. After submitting a handful of bank statements, he was quickly approved for a $65,000 loan, which allowed Newman to cover his wine shipments and keep his business running.
All good, right? Wrong, says Newman.
“These loans are predatory by nature,” he told me. Think payday loans for small businesses, he said, with interest rates well over 30%.
OnDeck Capital is representative of a new breed of online lenders known as financial-technology firms, or “fintech,” that have found a niche making money available to small businesses quickly and with minimal hassle.
Fairness in lending means clear and straightforward disclosure of terms and conditions. On that score, OnDeck seems to come up short.
For example, the company’s website boasts that term loans of up to $500,000 can be obtained with annual interest rates as low as 5.99%. Newman said that when he contacted OnDeck, he was hoping to get a loan at such a rate. But it didn’t work out that way.
“They were crafty about it,” he recalled. “They said they couldn’t offer me the lower interest rate, but they’d see what they could do for me.”
What he got was a 12-month, $65,000 loan, plus nearly $17,500 in interest and an origination fee of $1,625. That translated to an annual percentage rate of 55%.
In fact, OnDeck told me its average annual interest rate for term loans, excluding fees, is 38%.
To read the rest of the article, click here.
WASHINGTON DC (September 22, 2017) — As noted by the Washington Post, “Bankers are worried, and rightly so. In a letter to shareholders of JP Morgan Chase, America’s largest bank, chief executive Jamie Dimon warned investors that “Silicon Valley is coming.” Goldman Sachs, according to Inc., “estimates that upstarts could steal up to $4.7 trillion in annual revenue” from incumbent banks, a potential payday that is driving venture investors to pour nearly $25 billion annually into the sector.”
According to Accenture, “over the past five years, global financial technology (fintech) financing has grown rapidly, but the share of fintech investment directed at companies looking to compete against the financial services sector has remained relatively stable at 62 percent.”
In New York City, however, Accenture notes that explosive FinTech growth is “coinciding with a dramatic shift toward collaboration. As a result, NYC is quickly becoming the global center of a new kind of fintech innovation.”
NEW YORK, NY (September 14, 2017) — There are all sorts of legal and technical issues about how lending rules apply to the new breed of online lenders, but here’s a more fundamental one: How sure are they their automated technology is colorblind?
Even if a company has the best intentions of following fair-lending principles, it’s debatable whether the artificial intelligence engines that online lenders typically use —and that banks are just starting to deploy — are capable of making credit decisions without inadvertently lending in affluent sections and not in minority neighborhoods."
To read the entire article, read here.
RICHMOND, CA (September 12, 2017) — Che Al-Barri remembers feeling like he was drowning in debt last year. He had taken out a $70,000 loan for his small cleaning company, but was struggling to repay it.
The lender, a financial technology — or fintech — company, automatically collected $331 from his bank account daily, Monday through Friday. The frequent hits depleted his income and took a toll on his business, he said.
“If you get hit every single day you have no time to breathe,” said Al-Barri, 45, who grew up in Richmond. “It put me up against the wall. There was many times I pulled the covers over my head and just laid there like, ‘Oh my gosh, what am I going to do?'”
To read the entire article, click here.
NEW YORK, NY (September 4, 2017) — Two years of fin tech driven reach has helped banks grow about 15 to 20 per cent indicating that banks’ dependence on `feet-on-street’ to campaign for loans may recede in a few years. Bankers said nearly a third of their customers below 30 years were on-boarded through the digital platform.
Banks are using FinTech players to qualify good customers faster and give on the fly credit. Significant reduction in time used for taking better credit decisions have led to higher conversion in disbursal of loans.
To read the entire article, click here.
NEW YORK, NY (August 23, 2017) — Traditional financial services providers have tightened their lending requirements, leaving many small business owners with few channels to uncover the capital they need.
The financial crisis of 2008 caused global shockwaves, wrecking businesses and wiping away thousands of dollars’ worth of individuals’ savings. World markets are still recovering to this day, and governments have enacted strong reforms to prevent a repeat occurrence. These new, stricter regulations have deeply changed the financial world. Along with shifts in consumer preferences, banks and lenders are now faced with a vastly different financing landscape.
To read the entire article, click here.
NEW YORK, NY (August 10, 2017) — While startups and small business are often (rightly) hailed as the engines that power growth in the American economy, when it comes time to secure funds — the situation gets tricky. Stated simply, ten years out of the financial crisis and small business lending remains a chronically sluggish and difficult to work in environment.
According to a report by the country’s 12 regional Federal Reserve banks, over half of all startups report difficulty in securing loans and 81 percent report having had to dip into their personal funds to cover gaps in their corporate cash flow. Startups, as defined by the new report, are firms that are less than two years old and employing less than 500 workers.
“Given the importance of startups for the economy, the question of startup capital is of central importance,” according to the 2016 Small Business Credit Survey Report on Startup Firms. “While funding is the lifeblood of every company, capital is especially critical for startups. To reach scale, startups need to be able to secure expansion capital.
To read the entire article, click here.
NEW YORK, NY (May 1, 2017) - Online lenders have been facing an uphill battle recently as investors question whether they are truly getting the loan transparency they need to confidently invest in this young industry. Investors, credit providers and ratings agencies are worried about loan data integrity as well as collateral and ownership rights behind the loans.
To read the entire article, click here.
Largest network of funding sources and resources for entrepreneurs, startups, businesses, nonprofits, social ventures, and community organizations.
What are people saying?
