Online Marketplace Lenders: Friend or Foe?

How Online Lending is Changing the Entire Lending Environment

By Stu Lustman, Blogmaster P2PLendingExpert.com

Twitter: @StuFinancesTech

LinkedIn: https://www.linkedin.com/in/stulustman

Email: Stu@p2plendingexpert.com

Online Marketplace Lenders: Friend or Foe?

● Online lenders known as marketplace lenders or peer to peer lenders are in

your market whether you realize it or not

● They are not just very expensive Merchant Cash Advance (MCA) companies

● Their speed, ease of use and technology threatens all conventional lending

So Who is Stu?And Why is he here talking to

us?

● I was one of you, a broker member of the NAELB...then

● Credit director at large discounter who got acquired by a bank

● Oversaw 5x increase in origination volume with less delinquency in 5 years

● Discovered p2p lending in 2013 and operates one of longest running blogs on the subject

The problem: Varied Online Lenders Targeting Your Customers

Consumer Unsecured

Your Low dollar EFA

deals approved in

10 min online

No collateral up to

$40,000

Same up to 5 years you

offer

Rates probably lower

than yours

Small Biz Lenders

None do leasing, just

lending

Easy, smooth

application process

No true App Only

Online biz lenders are

specialists: Working

capital, factoring

most popular

Merchant Cash Advance

High rates called a fee

Will lend to nearly

anyone

Cutting into your high

rate B/C credit

customers

Challenges: Are You Concerned Yet?

Challenge 1

Online lenders

encroaching on your

good credits

Their rates are lower

than yours and their

process faster and

easier than yours.

Can you differentiate?

Challenge 2

Online lenders

encroaching on your bad

credits too

Instead of making more

on helping problem

credits, MCAs are

making their high rates

easier to access.

Challenge 3

How do you compete?

Where do you fit in?

SolutionPartner where you can, Sell against where you have to

Many reputable firms in sm biz and consumer lending have affiliate programs. Their answer may be a better fit than yours

MCAs are the easiest to sell against

These companies aren’t going anywhere.

These firms do not have vendor programs but yours need to add significant value

Conventional lenders like banks and fintechs are in the space

You Have Many Indirect Competitors Online

Banks

Banks are getting into

online lending in record

numbers

● Suntrust

● Goldman Sachs

● Wells Fargo

Fintech Firms

Financial Technology

firms are working to

disrupt ALL lending

including small business

● Lending Club

● Prosper

● Kabbage

Hybrids

Firms that use fintech

and provide some

banking services already

● Paypal-Working

Capital & Swift

acquisition

● Amazon-lending

for online

merchants

Screenshots from Lightstream

Wells Fargo Fastflex Sm Biz LoanLaunched in May 2017

Loans up to $100,000

Weekly payment structure

Direct comparisons in

pricing with Can Capital,

OnDeck and Kabbage

Link:

https://newsroom.wf.com/

press-release/consumer-

lending/wells-fargo-

launches-

fastflex%E2%84%A0-

small-business-loan

Screenshots from Lending Club

Screenshots from Lending Club

Screenshots from Lending Club Personal

Screenshots from Lending Club Personal

August 2007

Lending Club issues

first loan

March 2010

Lending Club loan

volume reaches $100

million

November 2012

Lending Club loan

volume reaches $ 1

billion

June 2015

Lending Club loan

volume reaches $10

billion

Year End 2016

Lending Club issues

over 2 million loans for

$24.6 billion in volume

Lending Club’s History

Screenshots from Prosper

Screenshots from ProsperEasy to Apply

Create an Account

Name

Address

Annual Income

Date of Birth

Note that it is soft pull that

won’t affect credit score

Screenshots from Kabbage

Screenshots from Kabbage: Rates & Fees

Paypal Acquires Swift Capital 8/17Paypal Working Capital

lending since 2013

Expands Lending

Capability w/Loans up to

$500,000

Apply online or with

mobile app (ioS and

Android)

App takes 2 minutes to fill

out w/soft credit pull

Link:

https://www.nytimes.com/

reuters/2017/08/10/busine

ss/10reuters-paypal-m-a-

swiftfinancial.html

Allows customization of loan product like odd months or set by payment.

Offers Term Loans and Cash Advance Product

Online Marketplace Lenders: Friend or Foe?

Thank You!

Here’s how you can Contact Me:

By Stu Lustman, Blogmaster http://P2PLendingExpert.com

Twitter: @StuFinancesTech

LinkedIn: https://www.linkedin.com/in/stulustman

Email: Stu@p2plendingexpert.com

Phone: 678-830-3847

Get Your Copy of This Presentation at http://p2plendingexpert.com/naelb