To say that alternative business lending has grown significantly in the past few years would be an understatement. Yet as far as online lending has come in recent times, it still represents a fraction of business and consumer lending in the United States and around the globe. Gains in this industry have been substantial enough, however, that competition is growing fiercer by the day and serious players have entered the field.
Original Funding was founded on a basic proposition: to provide greater speed and transparency in an ever-changing alternative lending landscape. This means that not only do we attempt to stay ahead of the technology curve and provide as much information to potential borrowers as possible to guide and protect them, but we select partners who share our commitment to safety, security and transparency.
Here are just a few things we look for when partnering with a lender.
Time in the game
Marketplace lending isn’t as disruptive as it likes to pretend. Many of the most significant players in MPL have meaningful experience in the world of finance. Original Funding looks for lenders who boast a roster of veterans that have been through economic cycles and seen the banking industry from all sides. It’s important to remember that institutions, no matter how large or small, are made up of people who want the best for their company, and by extension, the borrower. The most successful lenders have leadership with decades of banking experience, practical business knowledge and a deep understanding of the regulatory environment. The company name and process might be new, but the management teams are anything but.
Available and resourceful
As much as Fintech companies in the MPL world like to tout speed, efficiency and reliance upon technology, it’s essential that Original Funding establishes a personal relationship with our funders. No matter how advanced the technology is on the lending side, one size does not fit all when it comes to a borrower’s needs. Every situation is different. As such, it’s important that we learn the borrower’s story and understand their business. Likewise, it’s important that we have someone to communicate with to tell these stories. Basic information can provide a clean overview of an applicant, but Original Funding prefers to provide a more complete and nuanced picture of our borrowers to ensure that we are matching them with the product that best suits their needs.
We partner with lenders who are well-capitalized independent of the market. This means that our lenders have strong balance sheets and the ability to fund loans irrespective of market conditions. We look for a healthy mix of private investment from well-heeled individuals, equity from outside investors and available funds from the marketplace – public or private – to ensure that our funders have meaningful reserves and the ability to maintain pricing advantages.
Forgive the crass nature of this statement, but it’s a truism we cannot ignore. Original Funding has the lowest stated brokerage rate in the industry for a reason. We don’t charge additional commission on top of loans. There are no application fees and no origination fees on loans we submit. If the goal is to extract as many fees and as much commission as possible, our borrowers will suffer and the relationship between the borrower, broker and funder collapses. We have even altered agreements with funders who were willing to pay out higher commission on successful applications to reflect our lower, standardized pricing. We’re in this for the long haul because our goal is to develop a long-term strategic relationship with the businesses we assist. We have resources and advisors that help small businesses and entrepreneurs realize their business goals. Therefore, we are very protective of your bottom line. In this, we differ from all other brokerages around the country.
Getting a loan or consolidating multiple business loans is hopefully just the beginning of our relationship with a business. It’s important that our lenders understand our motives and that everyone works together to help small businesses grow.