U.S. ONLINE, NON-BANK FINANCE LANDSCAPE
Curated through May 2016
1
Milken Institute Center for Financial Markets
@MI_CFM
2
JACKSON MUELLER is the deputy director of the
FinTech program at the Milken Institute’s Center
for Financial Markets. His focus is on capital
formation policy and financial markets education
initiatives. He is the author of FinTech in Focus,
and the curator of this landscape.
[email protected]
@Jackson_Mueller
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Table of Contents
I. 
Where They’re Located (Slide 8)
II. 
Consumer Finance (9-49)
a.  Marketplace Platforms: Retail Investor Focus (10-12): Lending Club, Prosper
b.  Marketplace Platforms: Accredited and/or Institutional Investors (solely) (13-19): CircleBack
Lending, Pave, Payoff, Peerform, RocketLoans, Upstart
c.  Balance Sheet Platforms (20-26): Argon Credit, Ascend Consumer Finance, Best Egg
(Marlette Funding), Borro, Insikt, SoFi
d.  Hybrid Platforms: Marketplace and Balance Sheet (27-29): Avant, CommonBond
e.  A Marketplace for Consumer Finance (30-32): Credible, DriverUp
f. 
Income Smoothing (33-34): Even
g.  Personal Credit with a Social Boost (35-38): Elevate, LendUp, Oportun
h.  Purchase Financing (39-42): Affirm, Loan Hero, PayPal Credit
i. 
Lending via Your Social Network (43-44): Puddle
j. 
Education Financing (45-49): Climb, CommonBond, Earnest, SoFi
5
Table of Contents
III. S Small Business Finance (slides 50-101)
a.  Marketplace Platforms: Retail Investor Focus (51-52): StreetShares
b.  Marketplace Platforms: Accredited and/or institutional investors (solely) (53-58): ApplePie
Capital, Bond Street, Credibility Capital, Funding Circle, Lending Club
c.  Balance Sheet Platforms (59-70): CAN Capital, Credibly, The Credit Junction, Fundation,
Kabbage, Lighter Capital, Mainspring Funding, OnDeck, RapidAdvance, SnapCap, Smartbiz
(Better Finance)
d.  A Marketplace For Small Business Finance (71-76): Biz2Credit, Bizfi, Fundera, Intuit
Quickbooks Financing, Lendio
e.  Purchase Financing (77-78): LiftForward
f.  E-commerce Credit (79-81): Amazon Lending, PayPal Working Capital, Square
g.  Lending via Your Social Network, the Crowd (83-87): Able, Dealstruck, KickFurther,
P2BInvestor
h.  Invoice Financing (88-94): BlueVine, C2FO, CreditSuppliers, FastPay, FundBox, Taulia
i.  Merchant Cash Advance (95-99): Behalf, CAN Capital, Capify, Strategic Funding
IV. S Nonprofit Micro- and Small Business Finance (100-102): Accion, Kiva
6
Table of Contents
V. S Federal Initiatives (103-104): U.S. Small Business Administration
VI. S Enter: Incumbent Banks (105-107): Goldman Sachs, Wells Fargo
VII. S Common Originating Banks (108)
VIII.S Infrastructure Providers / Peer-to-Peer Investment Tools (109)
IX. S Credit Scoring: The Players (110)
X. S Trade Associations / Advocacy Groups Involved (111)
XI. S Regulatory Outlook 2016 and Beyond: Online, Non-Bank Financing Issues Likely to
Emerge (112-116)
7
I. Where They’re Located
72 PLATFORMS*
profiled in this deck
51 / 72
profiled are based
in CA or NY
*Lending Club and PayPal counted twice as they operate in both small business and consumer finance. Incumbent firms Goldman
Sachs and Wells Fargo also profiled due to their online finance ambitions, along with the U.S. Small Business Administration.
8
II. Consumer Finance
Marketplace Platforms: Retail Investor Focus
TIMELINE
2006
§  Founded
2007
HEADQUARTERS: San Francisco, CA
FOUNDER: Renaud Laplanche.
CURRENT ACTING CEO: Scott Sanborn (also President), Executive Chairman:
Hans Morris.
LOAN ORIGINATION: WebBank
LOANS: Personal loans up to $40,000. Interest rates from 5.99% - 35.89% for 24,
36, 60 month terms. Origination fee between 1-6% depending on loan grade
(average fee: 5.28% as of Q1 2016). Unsuccessful payment fee of $15, late
payment fee 5% of unpaid installment amount, or $15 (whichever is greater),
assessed after 15 day grace period. Check processing fee of $7 per payment.
Average interest rate on loans issued through the platform (Feb. 2016): 12.60%,
compared with a national average of over 17% for credit cards.
NOTABLE BOARD MEMBERS: John Mack, the former Morgan Stanley chief
executive, and Lawrence Summers, the former US Treasury secretary, Mary
Meeker of Kleiner Perkins Caufield & Byers, and others.
FundingRound
Announced
Amount/Involvement
SeriesA
August2007
$10.26M/CanaanPartners,NorwestVenturePartners
SeriesB
March2009
$12M/MorgenthalerVentures,CanaanPartners,Norwest
VenturePartners
SeriesC
April2010
$24.5M/Founda?onCapital,MorgenthalerVentures,
CanaanPartners,NorwestVenturePartners
SeriesD
August2011
$25M/UnionSquareVentures,MorgenthalerVentures,
CanaanPartners,NorwestVenturePartners
SeriesE
June2012
$17.5M/KleinerPerkinsCaufield&Byers;JohnMack
SeriesF
April2014
$65M/T.RowePriceAssociates,Inc.,Wellington
ManagementCompany,BlackRockandSandsCapital
§  Launched on Facebook Platform back when Facebook had 24 million users
§  Around the time of its Series A, the Lending Club community totaled 13,000
Facebook users, with $750,000 in loans transacted among those users
§  Expands nationwide across the 50 states
2008
§  Scrutinized by the SEC. Quiet period: April 7, 2008 - October 14, 2008
§  Lending Club required to register loans originated on its website as securities with
the SEC
2010
§  Lending Club turns 3, captures 80% of the US peer-to-peer marketplace
2012
§  Facilitated more than $1 billion in personal loans since inception
2014
§  Emergence into small business lending
§  Acquisition of Springstone Financial leading to financing for elective medical
procedures and private education
§  Initial Public Offering. Raised roughly $1 billion, valuing the company at $8.5 billion.
Fourth largest consumer internet IPO in U.S. history after Google, Facebook, and
Twitter
2015
§  Partnerships including with Google, Alibaba, BancAlliance, HomeAdvisor, Citigroup,
Sam’s Club, Opportunity Fund… etc.
§  Interest rates on its platform increase .25% in line with Fed rate hike
§  New credit product for SMEs unveiled providing “convenient, flexible and affordable
credit”
2016
§  Announces enhanced program structure with WebBank, where the issuing bank will
keep an “on-going economic interest in all loans made after they are sold”
§  Announces $150 million share buyback, saving borrowers an estimated $1.6 billion
§  Launches Marketplace Lending Association with Funding Circle and Prosper
11
TIMELINE
2006
§  Launched
2008
§  Scrutinized by the SEC. Quiet period: October 15, 2008 - July 13, 2009. Prosper
required to register loans originated on its website as securities with the SEC
HEADQUARTERS: San Francisco, CA
CO-FOUNDERS: Chris Larsen, John Witchel
CURRENT CEO: Aaron Vermut
LOAN ORIGINATION: WebBank
LOANS: $2,000 - $35,000. Fixed rates from 5.99% to 36% APR for first time
borrowers. Terms: 3-5 years. Origination fee: 0.50% - 4.95%. $15 fee if failed
automatic withdrawal, return check, brank draft if payment is more than 15 days
late. Single monthly payment.
First US peer-to-peer lending marketplace in the US. More than 2 million members
and $6 billion in funded loans.
FundingRound
Announced
Amount/Involvement
SeriesA
April2005
$7.5million/Accel,Benchmark
SeriesB
February2006
$12.5million/Accel,OmidyarNetwork,Benchmark,Fidelity
Ventures
SeriesC
June2007
$20million/OmidyarNetwork,Benchmark,DAGVentures,Fidelity
Ventures,MeritechCapitalPartners
SeriesD
April2010
$14.7million/TomorrowVentures,LLC,CompuCreditHoldings
Corpora?on,AccelPartners;BenchmarkCapital;andothers.
SeriesE
June2011
$17.2million/DraperFisherJurvetson,CrosslinkCapital,Accel
Partners,CompuCredit,OmidyarNetwork,andothers.
Venture
January2013
$20million/Sequoia,DraperFisherJurvetsonandCrosslink
Capital,AccelPartners,CompuCredit,OmidyarNetwork,and
others.
PrivateEquity
September2013
$25million/Sequoia,BlackRock
PrivateEquity
May2014
$70.1million/FranciscoPartners,aprivateequityfirmwith
Ins?tu?onalVenturePartners,PhenomenVenturespar?cipa?ng
Venture
April2015
$165million/CreditSuisseNEXTInvestors,J.P.MorganAsset
Management,BBVAVentures,andothers
2009
§  Relaunched site after SEC review
§  One of the companies behind the Coalition for New Credit Models. Coalition
members: Credit Karma, Loanio, ProFounder, Progreso Financiero, Prosper, the
Receivables Exchange, SecondMarket
2012
§  Chris Larsen moves from CEO and Chairman to exclusively Chairman. Stephan
Vermut named as CEO and member of the board of directors. Ron Suber takes over
as Head of Global Institutional Sales, and Aaron Vermut joins as President
2013
§  Names Raj Date, Managing Partner at Fenway Summer, to Board of Directors. Date
previously worked for CFPB
2014
§  Surpassed $1 billion in personal loans since inception
§  Has 35% share of the online consumer peer-to-peer lending marketplace
§  Names Aaron Vermut CEO; Ron Suber Steps into Role as President; Stephan
Vermut Named Executive Chairman
2015
§  Surpassed $5 billion in loans originated through its platform since inception.
§  Partnerships with Western Independent Bankers, OnDeck, Radius Bank, Spirit
Airlines
§  Acquisition of American Healthcare Lending (medical loans); BillGuard (fraud
monitoring, financial management)
§  Citigroup marketing $377 million in bond backed by Prosper loans. Moody’s
assigned a provisional grade of A3 to the highest-rated class of notes covering 54%
of the loan pool
§  New API platform announced for investors
2016
§  Unveils Prosper Daily, its first mobile application (replaces finance app, BillGuard).
§  AAdjusted its prices and loss rates due to increased forward interest rates and
widening spreads
§  Released Prosper Marketplace Financial Wellness Study covering US personal
finance
§  Partners with HomeAdvisor
§  Moody’s may downgrade three bonds sold to Citigroup and backed by consumer
loans originated on the Prosper platform
§  Prosper announces second rate hike of this year "in anticipation of action by the Fed
to raise rates next month, and the expectation of this action is already largely priced
into forward curves and swaps.“ Weighted borrower rate now between 6.88% 31.1% vs. 6.88% - 30.84% prior
Marketplace Platforms: Accredited and/or
Institutional Investors (solely)
TIMELINE
2013
§  Launched
§  Opened in Georgia and New Mexico, with initial loans funded internally for the time
being
2014
HEADQUARTERS: Baco Raton, FL
CO-FOUNDERS: Michael Solomon (CEO), Todd Walters (COO)
LOAN ORIGINATION: County Bank of Rehoboth Beach, Delaware
LOANS: $3,001 - $35,000. APR from 6.63% to 35.18%. $5 fee per payment if
elect to make non-electronic transfers. Pay over 36, 60 months. Lowest APR for a
loan term of 36 months: 6.63%. Lowest APR for a loan term of 60 months:
12.88%.
CircleBack’s focus is exclusively on partnering with institutional investors to fund
loans.
Both co-founders previously founded Loanio.com back in 2008, but the recession
and SEC regulations (S-1 registration) marked the internet platforms downfall.
Funding
Round
Announced
Amount/Involvement
SeriesA
September2015
$17.4Million/PineRiverCapitalManagement,Wicklow
Capital
§  Announce $1.9 million equity finance round with GETCO LLC founders Stephen
Schuler and Dan Tierney. GETCO is part of Knight Capital Group
§  Entered agreement with Jefferies to facilitate the sale and securitization of up to
$500 million aggregate principal amount of consumer loans
2015
§  First securitization of consumer loans completed: $106 million structured and sold by
Jefferies
§  Along with Series A, also agreement with Pine River Capital Management for the
right to purchase as much as $500 million in aggregate principal amount of highquality consumer loans originated by CircleBack
§  As of September 2015, facilitated the origination of over $200 million in loans to
high-quality borrowers
2016
§  Originated over $400 million in loans
§  Hired Scott Lascelles, former CMO of SpringLeaf, and John Donovan, former COO/
Board Member of Lending Club
§  Third securitization in progress for the second quarter
14
TIMELINE
2012
§  Founded. Pilot program in NY with $5 million in seed money. Funds 8 people
originally
2013
HEADQUARTERS: New York, NY
CO-FOUNDERS: Oren Bass (CEO), Sal Lahoud (Creative Director)
LOAN ORIGINATION: Cross River Bank
LOANS: $3,000 - $25,000 with interest rates between 5.99 – 22.42% and APRs
from 6.97 – 27.1%. Terms: 2 to 3 years. Origination fee between 1-6%. Late fee (if
16 days past due): 5% of past due amount or $15, whichever is greater.
Can elect to defer the first three payments if taking a loan for a course, but interest
on the loan will continue to accrue.
Targeted towards Thin Files with credit scores within the 680-750 range.
When it started, intention was to create an “income share” model where borrowers
would agree to sell investors a portion of their future earnings. However, due to
legal, tax, regulatory certainty, Pave could not get the product off the ground.
Focus shifted to providing traditional loans.
Funding
Round
Announced
SeriesA
April2016
§  Launches Ripple “Pay It Forward” allowing unaccredited backers to invest in
students. Returns will be pooled and reinvested in other prospects and projects,
rather than go back to the unaccredited backer
§  As of November, Pave had 4,500 prospects and 1,700 backers. 60 people have
been funded, with average investments of $2,000 per backer
2014
§  Partnership with General Assembly, RefactorU along with 40 other education
partners to help students raise funds for tuition
§  Sen. Marco Rubio in an interview with CNBC, supports PAVE
§  Announcement of Pave Loan à Switch in focus. No longer offering income sharing,
but fixed-rate loan products focused on Thin Files
§  Launched Talent Fund, open ended fund for qualified investors to invest in Pave
loans
2015
§  Launched nationwide – major backers: RPM Ventures and Maxfield Capital
§  Consortium of investors led by Seer Capital agrees to invest up to $300 million in
Pave loans and provide the company with additional equity capital
2016
§  Equity raises $8 million by Maxfield Capital
Amount/Involvement
$8million/MaxfieldCapital
31Years
Median
Age
738
Average
FICO
$82,000
Average
Income
35%ofBorrower
TakeaCourse
$14,100
Average
LoanSize
15
TIMELINE
2009
§  Founded
2011
§  Launch website with $3.5 million investment capital from FirstMark Capital; Betsy
Bernard, the former President of AT&T; Kai Huang, founder of Guitar Hero; Jim
Nordstrom, former president of Nordstrom; David Solomon, Global co-head of
Investment Banking at Goldman Sachs, and others
2012
HEADQUARTERS: Costa Mesa, CA
FOUNDER: Scott Saunders (CEO)
LOAN ORIGINATION: First Electronic Bank
LOANS: $5,000 - $35,000. Fixed APR: 8-22%. Terms: 24, 36, 48, 60 months.
Origination fee: 2-5% (based on length of loan). $15 fee for failed payment
transaction. First US peer-to-peer lending marketplace in the US. More than 2
million members and $6 billion in funded loans.
Factors considered in application: credit score of 660+, debt-to-income ratio ≤
50%. 3 years of good credit history. No current delinquencies and nothing greater
than 90 days within last 12 months. No more than two open and satisfactory
trades (opened and made payments on time), no more than one installment loan
within past 12 months.
Loans to consumers to repay outstanding credit card debt; potential offer of wealth
management products in the long-term. Payoff’s loans can be used only to
consolidate credit card debt.
Notable board members (January 2015): Mohamed El-Erian (Former CEO,
Pimco), Joe Saunders (Former CEO, Visa), Sean Park (Founder & Chairman,
Anthemis Group), Jim Lane (Former Partner, Goldman Sachs), and Scott
Saunders (Founder & CEO, Payoff).
Galen Buckwalter, former eHarmony chief scientist, is now chief scientist at Payoff
Product available in 30 states.
§  Secures $2 million equity financing from Anthemis Group, Firstmark Capital, Great
Oaks Venture Capital
§  Partnership with Encore Capital Group to provide Payoff services to the more than
34 million 34 million distressed consumers Encore works with
2014
§  $12 million equity round led by Mohamed El-Erian
2015
§  Secured $250 million in debt financing from Eaglewood Capital Management
§  Since inception, the company has raised more than $300 million in debt and equity
capital
§  Announces that beginning in 2016, it will be the first marketplace lender to provide
monthly access to FICO Scores to its members for free
2016
§  Releases study which finds 1-in-4 Americans and 1-in-3 millennials suffer from
PTSD-like symptoms related to financial stress
§  Releases a further study which explores how personality interacts with financial
decision-making
16
TIMELINE
2011
§  Launched. Introduced its Loan Options program allowing borrowers to come up with
set of options that combines different loan amounts, grades and interest rates for
each loan
2014
HEADQUARTERS: New York, NY
FOUNDER: Mikael Rapaport (CEO)
LOAN ORIGINATION: Cross River Bank
LOANS: 3-year terms personal loans ranging from $1,000 to $25,000 to those
with credit scores as low as 600. APR from 7.12% to 29.99%. Origination fee
included in APR. Late fee of 5% of the payment in question or $15, whichever is
greater. $15 fee for payment made by ACH transfer or check that is returned due
to insufficient funds, etc. $15 check processing fee. Peerform was the first P2P
lender to introduce tranches as a way to mitigate risk.
Continue to post loan titles and loan descriptions in their data, unlike Prosper and
Lending Club which did away with that.
Prospective borrowers must have a minimum FICO score of 600, a debt-toincome ratio below 40% (as calculated by Peerform), a credit profile showing no
delinquencies, bankruptcy, tax lien, etc. within the last 12 months. Minimum of one
open bank account and a minimum of one revolving account ever opened
(Magnify Money, June 2015).
§  Re-launched platform after closing $1 million seed round led by Corporest
Development, a European-based advisory and investment firm
§  Launched Peerform Loan Analyzer as an alternative scoring methodology for
assessing the creditworthiness of a borrower
§  Agreement with Looking Glass Investments to utilize the loan analyzer to fund whole
loans. LGI has also partnered with Lending Club, Prosper, and Funding Circle
§  As of December: Peerform issued over 500 loans at a total loan volume of around $2
million
2015
§  Expected Series A funding round in Q1
17
TIMELINE
2015
§  Reported in the Wall Street Journal that Quicken executives were in discussions
about offering other types of consumer loans, though any product would not arrive
until 2016
§  First reported by the Detroit Free Press that RocketLoans Marketplace was
incorporated in Michigan and other states, sharing the exact same address as
Quicken Loans. As of November, website was under construction
2016
HEADQUARTERS: Detroit, MI
CEO: Todd Lunsford
LOAN ORIGINATION: Cross River Bank
LOANS: $2,000 - $35,000. Terms: 36 or 60 months. APR between 5.983% to
28.99% nationally. Automatic withdrawal via ACH. Check processing fee: $5.
Late payment fee: 5% of the past due amount or $15, whichever is greater.
Origination fee: 1% - 6% of the loan amount, which is paid to Cross River
Bank and deducted from the borrower's balance before money is distributed.
ACH/Check return fee: $15.
§  Quicken Loans launches personal lending arm, RocketLoans. “The first financial
service that is not a mortgage product that we have offered in 30 years of existence.“
– Todd Lunsford
18
TIMELINE
2012
§  Launched with $1.75 million backing from Google Ventures, Kleiner Perkins Caufield
& Byers, NEA and Mark Cuban
2013
HEADQUARTERS: San Carlos, CA
CO-FOUNDERS: Dave Girouard (CEO), Paul Gu (Product), Anna Counselman
(Operations)
LOAN ORIGINATION: Cross River Bank
LOANS: $1,000 - $50,000. APR from 4.66% - 29.99%. Terms: 3 and 5 year terms.
Average loan (3 year term) on Upstart: APR of 15%. Late payment fee: 5% of
unpaid amount or $15, whichever is greater.
Borrower requirements: Minimum FICO of 640, though the platform does accept
those with insufficient credit history. No bankruptcies, public records on a
borrower's credit report, and no accounts in collections or delinquent. Must have
less than 6 inquiries on the credit report in the last 6 months, not including student
loan, vehicle loan or mortgage inquiries, and other requirements.
Originally a “kickstarter” for college graduates, with focus on prime borrowers
(education analytics). Funding to graduates with the promise of a certain
percentage of their future income paid back over a number of years. Mentoring
also came with the funding. Effort to allow recent graduates ability to fulfill their
startup dreams.
In 2014, the firm shut down its income-sharing agreements to focus on its fixedrate loan product.
Upstart has originated $400 million in unsecured personal loans since inception.
Funding
Round
Announced
Amount/Involvement
SeriesA
April2013
$5.9million/KhoslaVentures,Founder’sFund,Collabora?veFund,Google
ChairmanEricSchmidt,Salesforce.comCEOMarcBenioffandserial
entrepreneurScodBanister
SeriesB
October2014
$10.5million/
SeriesC
July2015
$35million/ThirdPointVentures,KhoslaVentures,FirstRoundCapital,
Collabora?veFund,Google’sEricSchmidt,SalesforceCEOMarcBenioff.
§  Raised $3.5 million from Google Ventures, Kleiner Perkins Caufield & Byers, NEA,
Mark Cuban, Salesforce CEO Marc Benioff, IronPort Systems cofounder Scott
Banister
§  Announce five year agreement – for those looking for short-term investments (coding
schools, supplies… etc.). This on top of the original ten year agreement
§  Turns 1: $1M in funding offers have been made to upstarts, 555 unique funding
offers have been made to date
§  Announce partnerships with the following coding schools: General Assembly, Dev
Bootcamp, Launch Academy, Starter School, Metis, Code Fellows, and Coder
Camps
2014
§  Announces traditional fixed rate loans on the Upstart platform across all 50 states.
It’s a three-year loan between $5,000 - $25,000 with interest rates set between 6.5%
and 20%
§  Ranger Capital Group, through its Ranger Specialty Income Fund, begins to invest in
Upstart loans
§  Victory Park Capital agrees to invest $100 million in loans on Upstart over the next
two years
§  Announced a series of changes: Investors will be refunded origination fees if loan
defaults; dropped service fees for investors
§  As of April: Backers have made 2,224 offers totaling $3.5M to 320 upstarts, with
3,056 unique repayments to backers in 14 months without a single default
§  May: Upstart discontinues offering income share agreements, will remain focused on
fixed-rate loan product. “From a regulatory perspective, the income share concept
has been received warmly to date. And while many regulatory and policy efforts are
underway to facilitate the development of the market, these efforts will likely take
many years—a timeframe ill-suited for a startup like ours”
2015
§  Victory Park Capital ups its investment in Upstart loans to $500 million
§  Offer ability to invest in Upstart loans through Upstart IRA
2016
§  According to a blog post from Upstart's CEO, more than 28,000 loans have been
originated on the platform, and "we want to assure you that we've seen no
degradation in credit performance." In the two years since Upstart’s first loan, "the
portfolio has experienced low loss rates relative to the average interest rate across
every loan grade"
19
Balance Sheet Platforms
TIMELINE
2014
§  Launched
§  Raised $5 million debt facility
2015
§  Raised $75 million debt facility from Princeton Alternative Funding
HEADQUARTERS: Chicago, IL
CO-FOUNDERS: Raviv Wolfe (CEO) and Gary Zumski (CRO)
LOAN ORIGINATION: Balance sheet lender
REQUIREMENTS FOR PERSONAL INSTALLMENT LOANS: $2,000 $35,000. Credit score 560+. Minimum income of $2,000 per month. APR:
4.99% - 95%. Terms: 2-5 years.
PERSONAL LOAN REQUIREMENTS: “You do not need to have excellent
credit to qualify for a personal loan with Argon. However, we do require that
customers demonstrate a pattern of financial responsibility.” Income source
and valid checking account required, along with other requirements.
CURRENTLY LICENSED IN 7 STATES: CA, UT, IL, MO, GA, AL, NM
Member of Chicago’s 1871 incubator.
2016
§  Wolfe mentioned in an interview of some "exciting" announcements on the horizon
for the company and the products it offers, but declined to go into further detail
21
TIMELINE
2015
HEADQUARTERS: Los Angeles, CA
CO-FOUNDERS: Stewart Sui, Scott Crawford and Steven Carlson (CEO)
LOAN ORIGINATION: Balance sheet lender
LOANS: $2,000 - $15,000 (depending on the state). Terms up to 36 months. APR
27-36%. Requirements: Income over $35,000, 580+ FICO score, no more than 6
inquiries in last 12 months. No delinquencies in past 3 months. No bankruptcy in
the last 12 months, other underwriting criteria. Available in the following states: AL,
CA, GA, IL, OR, UT. Late fees/dishonored payment charges depend on the state.
Continue to post loan titles and loan descriptions in their data, unlike Prosper and
Lending Club which did away with that.
Uses Adaptive Risk Pricing technology that automatically adjusts a loan as the
borrower’s risk profile changes. Incorporates dynamic pricing into consumer loans
versus focusing on past behavior.
Rate Rewards product, if users agree, allows Ascend to monitor a borrower’s
fiscal behavior. It can also reduce interest cost up to 50%.
Steve Carlson is a member of the CFPB’s Consumer Advisory Board.
§  Launches with $1.5 million in seed funding from Mucker Capital, OCA Ventures,
Birchmere Advisors and the venture arm of Securian Financial Group
§  Launches its first product, Rate Rewards, allowing users to reduce their monthly
interest payments
§  Announced partnership with LendingTree, becoming part of its personal loan
network to compete against other lenders
§  Announced as one of the winners of a $3 million prize from Financial Solutions Lab –
a $30 million, five-year, initiative backed by JPMorgan Chase and the Center for
Financial Services Innovation. Capital and technical assistance will be provided to
the winners
22
TIMELINE
2013
§  Founded
2014
§  Launched Best Egg (eligibility to apply by invitation only)
§  $383 million in loans funded since launch
HEADQUARTERS: Wilmington, DE
FOUNDER: Jeffrey Meiler (CEO and Founder of Marlette Funding, LLC)
LOAN ORIGINATION: Cross River Bank partnership to deliver Best Egg product
LOANS: $2,000 - $35,000 for terms of 3 years or five years. APR from 5.99% to
29.99%. 0.99% - 4.99% origination fee.
Requirements to qualify for lowest rate: 700 FICO score, individual annual income
of $100,000. “Your verifiable income must support your ability to repay your loan.”
Personal loan product of Marlette Funding, LLC. Best Egg is Marlette Funding’s
first product.
2015
§  Bestegg.com opened to general public to apply for personal loans
§  Balance sheet lender as of 2Q 2015. Prior to that the company had eight end-buyers
from asset managers, family offices, and banks who purchased 100% of Marlette’s
loans
§  Announced $100 million securitization with Cross River Bank. Different from other
securitizations in that Cross River Bank and Marlette Funding will share a 12.5%
equity tranche with Deutsche Bank acting as the lender. This is the first time a
marketplace lender and an FDIC-insured bank have completed a joint transaction.
§  Raised $75 million in equity funding led by Invus Opportunities
§  Announces $1 billion in Best Egg loans originated since inception – taking less than
15 months
2016
§  First securitization collateralized by unsecured consumer loans ($140.9 million
consumer loan ABS transaction) originated under the online marketplace lending
platform operated by Marlette Funding under the Best Egg brand
23
TIMELINE
2008
§  Founded, originally headquartered in London
2012
§  Launched in the U.S., headquarters in NYC
2013
HEADQUARTERS: London, UK (U.S.-based operations: New York, NY)
FOUNDER: Paul Aitken (CEO)
FOCUS: Top 10% of population. Personal loans secured through a customer’s
luxury assets.
LOAN ORIGINATION: Balance sheet lender
LOANS:
§  Sales advance loans – allowing customers to obtain 70% of the estimated
price of their luxury asset before it sells. An initial advance, while Borro
maximizes the sale of luxury assets for the customer. Fixed interest rate on
funds advanced: 1-2%. Sales fee: 15-20% of asset's final sale price.
Borrow up to $5 million per luxury asset. Maximum loan to value: 75% of
the estimated market value of the asset and can be as low as 30%.
§  Bridge loans – luxury assets to secure short term financing. Vast majority of
Borro’s business. Loans: Up to $5 million per luxury asset (max LTV is 75%
of the estimate of the market value of the asset, can be as low as 30%).
Fixed rate: 2.99% - 3.99% per month. In CA, 2.99% - 4.99% per month.
Term: 6 months (can be renewed to 12 months).
§  Term loans – Loans: Start at $100,000 (up to $5 million per luxury asset).
Max LTV is 75% of estimate on market value of the asset, but can be as
low as 30%. Terms: 18-36 (18, 24, 36) months. Interest rates from 0.99%.
Penalty assessed for early settlement.
First online pawnbroker (according to FT article in 2009)
ASSETS ACCEPTED: Jewelry & Diamonds, Luxury Watches, Fine Art &
Antiques, Luxury Cars, Gold & Precious Metals, Luxury Handbags, Fine Wine.
§  Nigel Morris, co-founder of Capital One, named Chairman of the Board
§  Announces partnership with Biz2Credit, adding Borro to the small business credit
platform’s menu of loan products
§  Sale Advance program introduced
§  Surpasses $50 million in lending by the end of the year.
2014
§  Reaches $100 million lent against luxury assets and rare collectibles
§  Raised $112 million from Victory Park Capital
§  Forms an office in Beverly Hills, CA
2015
§  Raised $19.5 million in funding, led by OurCrowd and Rocket Internet
§  Launches its term loan product
2016
§  Funded transactions to date: ~$300 million
24
TIMELINE
2009
§  Gutierrez, of Progreso Financiero, was one of the founding members of the Coalition
for New Funding Models in Washington, D.C.
2012
HEADQUARTERS: San Francisco, CA
FOUNDER: James Guiterrez (CEO)
LOAN ORIGINATION: Balance sheet, also opeartes as lending-as-a-service for
brands
Former founder of Progreso Financiero in 2005 to provide affordable credit to the
Hispanic community, in particular.
Partners with major brands providing customers with loan products or purchase
financing under own brand name. Allows accredited investors to “participate in
bonds backed by distinct loan portfolios that Insikt credit scores and processes.”
Skin-in-the-game – loans go on Insikt’s balance sheet for first few months funded
by the credit facilities.
Angel investors include: Phil Purcell (former CEO Morgan Stanley and co-founder
Discover), Mark Troughton (former president Green Dot), Tom Villante (CEO of
Yapstone), Pete Briger (co-chairman of Fortress Investment Group), Jason Fish
(founder of Capital Source), Tim Dattels (managing partner TPG Asia), Dan Carroll
(former TPG Capital partner), and Matt Coffin (founder of LowerMyBills).
Funding
Round
Announced
Amount/Involvement
SeriesA
December2013
$7million/AcceleratorVentures,Con?nentalInvestors,Dan
Carroll,FirstMarkCapital,RickHeitzmann,JeremyPhilips,
PhilipPurcell,RajivGhatalia,RickHeitzmann,Serenge?Asset
Management,TimDadels,TomVillante
SeriesB
July2014
$16million/Revolu?onVentures,FirstmarkCapital,Serenge?
AssetManagement,PetersonVentures,JefferiesandAtalaya
CapitalManagement.
§  Founded
2014
§  Launched loan origination platform, Lendify
§  As of December, completed three securitizations with fourth on the way. Has also
raised over $100 million in capital
2015
§  Sponsor of CA bill SB 235, allowing more businesses and storefronts offer affordable
alternatives to payday loans
25
TIMELINE
2011
§  Launched (originally focused on student loan refinancing)
2012
§  Launched nationwide rollout of its Community Loan Program connecting alumni with
students after initial success at Stanford.
§  Stops lending after demand for loans far outstripped supply from alumni
2013
HEADQUARTERS: San Francisco, CA
FOUNDER: Mike Cagney (CEO)
LOAN ORIGINATION: SoFi Lending Copr.
PERSONAL LOANS: $5,000-$100,000 (depending on the state). Fixed rates:
5.95% - 12.99% APR (with AutoPay). Variable: 4.74 – 11.34% APR (with
AutoPay). Interest rates on SoFi variable rate personal loans are capped at
14.95%. Variable rates are not offered in 12 states. Terms: 3, 5, 7 years. Not
intended for educational expenses. Late fee: lesser of 4% of payment due or $5.
Not available in the following states: MS, NV. Max rates can be dependent on the
state.
MORTGAGES: Down payment between 10-50% on mortgages up to $3 million.
No mortgage insurance even if one puts less than 20% down. Requirements: SoFi
underwriting criteria, eligible state in which you purchased. Licensed to originate
mortgages in 25 states and Washington, D.C. (as of April 2015).
FOCUS: Prime and super-prime borrowers. Average borrower FICO score of 780
and income of approximately $150,000 (LendEDU - January 2016).
Funding
Round
Announced
Amount/Involvement
SeriesA
September2011/
March2012
$8million($4millioneach)/BaselineVentures,Innova?onEndeavors,
RonSuber,UluVentures
SeriesB
September2012
$77.2million/BaselineVentures,DCM,RenrenInc.
SeriesC
April2014
$80million/DiscoveryCapitalManagement,PeterThiel,Wicklow
Capital,exis?nginvestors.
SeriesD
February2015
$200million/ThirdPointVentures,WellingtonManagement
CompanyLLP,Ins?tu?onalVenturePartnersandexis?nginvestors
SeriesE
December2015
$1billion/SojBank,ThirdPointVentures,WellingtonManagement
CompanyLLP,andothers
Recommences lending after additional capital from alumni/institutional investors
Expands selection of loan products to include 5, 10 and 15 year fixed interest loans
Supported landmark deal to by Congress to tie student loan interest to market rates
Offers assistance to borrowers in career transition. Marks first time a private lender
offers such services to student loan borrowers
§  First rated securitization completed. First of its kind from P2P lender
§ 
§ 
§ 
§ 
2014
§  Closes $251 million securitization of refinanced student loans. S&P and DBRS rated
senior notes A, marking first such rating by S&P for a marketplace lender
securitization
§  Surpasses $1 billion in loans funded. Fastest marketplace lender to reach such a
milestone
§  Moves into home mortgages
§  Completes $303 million securitization rated by S&P, Moody’s and DBRS. First
marketplace lender to receive investment grade ratings from S&P and Moody’s
2015
§  Branches out into personal loans
§  Fourth securitization completed in January totaling $313 million
§  Announces Parent Loans, an alternative to Federal Parent PLUS loans, other private
loans to help parents fund a child’s education
§  Closed a $411 million securitization of student refinanced loans – it’s largest
securitization to date, and the highest rated
§  Citizens Bank has bought $200 million of loans from SoFi and has committed to
buying $300 million more
§  Prices another securitization at $418 million. First fintech company to earn AAA
DBRS Rating. The 6th such securitization to-date for the company
§  Raised $1 billion – “the largest single financing round in the fintech space to date”
§  Chinese social networking firm Renren Inc. completed an additional $150 million
preferred stock investment in SoFi. In April, the company said it owned 24% of SoFi,
after $100 million invested
§  Surpassed $6 billion in funded loans across mortgages, personal loans, and student
loan refinancing. First marketplace lender to reach $6 billion in under four years
2016
Surpasses 140,000 members and $9 billion in loans funded to date
Launches Wealth Management for members
Obtains Fannie Mae seller servicer status for mortgage
No longer factors FICO scores into its qualification process for its student loan
refinancing product
§  Becomes the first online lender to receive AAA rating from Moody's on a $380 million
offering backed by student loans
§ 
§ 
§ 
§ 
Hybrid Platforms: Marketplace & Balance Sheet
TIMELINE
2012
§  Launched AS AvantCredit
2013
HEADQUARTERS: Chicago, IL
CO-FOUNDERS: Al Goldstein (CEO), Paul Zhang (CTO), John Sun (CCO)
LOAN ORIGINATION: WebBank
UNSECURED PERSONAL LOAN CHARACTERISTICS: Fixed rate loans
between $1,000 - $35,000. Terms: 24, 36, 48, 60 months. Fixed interest rates:
9.95% - 36% APR. Late fee (after 10 days): $25. Dishonored payment fee: $15.
Avant has late fee forgiveness and will waive a late fee following three
consecutive on time payments.
No origination fee or prepayment penalty
+450,000 customers worldwide.
Funding
Round
Announced
Amount/Involvement
SeriesA
Q22013
$9million/AugustCapital,VictoryParkCapital
SeriesB
Q32013
$25million/AugustCapital,QEDInvestors,VictoryParkCapital
SeriesC
Q12014
$75million/TigerGlobalManagement,AugustCapital,QED
Investors
SeriesD
Q42014
$225million/TigerGlobalManagement,AugustCapital,DFJ
Growth,RREVentures,PeterThiel,KKR&Co.(KohlbergKravis
Roberts&Co.)
SeriesE
Q32015
$325million/GeneralAtlan?c,JPMorganChase&Co.,Balyasny
AssetManagement,AugustCapital,TigerGlobalManagement,
DFJGrowth,RREVentures
§  Issues first loan on January 1st
§  Expands into the UK in Q3
2014
§  Becomes most funded Chicago company for 2014 after $200 million debt financing
agreement with Jefferies as lead
2015
§  Rebrands as Avant
§  Launches Avant Institutional Marketplace - $400 million financing arrangement to
purchase newly originated loans led by KKR with Jefferies and Victory Park Capital
§  Acquires the assets of ReadyForZero.com (personal financial management)
§  Inaugural 144A securitization transaction providing Avant with $139 million in debt
financing
§  KKR and Victory Park Capital securitize $175 million of Avant consumer loans
purchased via Avant’s Institutional Marketplace
§  Announced $1 billion in loan originations since inception
§  Year-over-year loan volume increased approximately 200%
2016
§  Partners with loanDepot “through an API integration that will expand access to credit
through a borrower referral powered by a seamless digital experience”
§  Surpasses $3 billion in loan originations in just three years. Fastest online lender to
hit $3 billion
§  Added Sheila Bair, former Chairwoman of the FDIC, to the Board of Directors
§  Announces partnership with Regions Bank
28
TIMELINE
2012
§  Student loan pilot launched at Wharton
2013
HEADQUARTERS: New York, NY
FOUNDER: David Klein (CEO), Michael Taormina, and Jessup Shean
LOAN ORIGINATION: CommonBond Lending LLC
STUDENT LOAN REFI: Up to $500,000. Variable APR: 2.14% - 5.94%. Fixed
APR: 3.50 - 7.74%. Hybrid APR: 3.79% - 6.23% (Fixed rate first 5 years, then
variable for the last 5 years). All with 0.25% autopay discount. Requirements:
CommonBond underwriting criteria, eligible state where CommonBond lends
MBA LOAN: Max: full cost of attending the school. 10-yr fixed: 6.23% APR; 15-yr
fix: 6.72% APR. All with autopay. Origination fee: 2% added to principle balance of
the loan. Required: CommonBond underwriting criteria, attendance at one of 29
eligible MBA programs
PERSONAL LOAN: $1,000 - $50,000. Variable: 4.49% – 11.34% APR; Fixed:
5.74% – 12.99% APR. All with 0.25% autopay discount
No defaults or delinquencies in portfolio to date.
$650 million raised in debt/equity since inception. Two securitizations to date with
investment-grade ratings from Moody’s and DBRS.
Funding
Round
Announced
Amount/Involvement
SeriesA
September2013
$8.65million/TribecaVenturePartners,TheSocial+
CapitalPartnership,VikramPandit,ThomasGlocer,and
TomKalaris.
SeriesB
September2015
$35million/AugustCapital,NycaPartners,Victory
ParkCapitalandexis?nginvestors
§  National launch
2014
§  Surpasses $100 million in loans funded
§  Introduced the industry’s first hybrid loan for its student loan product
2015
§  Launched its “Investor Marketplace” – a first-of-its-kind financial marketplace in
student loans, where qualified investors purchase loans directly on the
CommonBond platform
§  Nelnet Inc., a leading student loan servicer, committed to purchasing at least $150
million of loans on the CommonBond platform
§  Completed $100 million in securitizations of student loans. First time Moody’s gave
an investment-grade rating to a first-time issuer in marketplace lending
§  Closed $275 million in debt financing from Barclays, Macquarie Capital, and others.
CommonBond surpasses $625 million in total funding to date, across both equity
and lending capital
2016
§  Surpasses $500 million in funded loans
§  Completes $150 million, investment-grade rated securitization led by Barclays and
Goldman Sachs
§  Personal loan pilot launches
29
A Marketplace for Consumer Finance
TIMELINE
2012
§  Founded
2014
§  Launched with $2.7 million in seed funding
HEADQUARTERS: San Francisco, CA
FOUNDER: Stephen Dash (CEO)
LOAN ORIGINATION: CommonBond Lending LLC
STUDENT LOANS: Fixed rates from 3.99% APR. Variable rates from 2.06% APR.
REFINANCE STUDENT LOANS: Variable rates: as low as 2.13% APR. Fixed
rates: 3.5% APR.
PERSONAL LOANS: $500 - $40,000. Rates from 5.99% APR.
A “multi-lender marketplace that allows borrowers to receive competitive loan
options from its vetted lenders.”
"To find a refinance through Credible, you must have more than $7,500 in private
or federal loans (including PLUS loans) that are not currently in forbearance or
deferment.... According to Credible’s historical data, a credit score below about
680 will likely require a co-signer." (Nerdwallet - July 2015)
Funding
Round
Announced
Amount/Involvement
SeriesA
September2015
$10million/SoulH?te,Founder&CEOofDianrong.comand
Co-founderofLendingClub,withpar?cipa?onfromRonSuber,
PresidentofProsper,andonlinelendingpioneerScod
Langmack.
2014
§  Surpasses $100 million in loans funded
2015
§  Private student loan marketplace launched
§  Partnered with American Medical Association, Society of Plastics Engineers, North
Carolina Medical Society, Nerdwallet, SimpleFi, and others
§  Launches into personal loans. Marketplace will include Lending Club, Prosper,
Avant, Upstart and Pave
31
TIMELINE
2012
§  Sierra Auto Finance founded by Ellis
HEADQUARTERS: Dallas, TX
FOUNDER: Sam Ellis (CEO)
LOAN ORIGINATION: Funded off its balance sheet originally prior to Series A
funding and launch of online marketplace. “What makes DriverUp different is that
at origination, the loan is pre-funded by DriverUp before being put on the
marketplace. This is a similar strategy that real estate crowdfunding companies
employ because it allows for a better experience for the borrower and the
dealer.” (Lend Academy – October 2015)
MINIMUM INVESTMENT LEVELS: $100,000. DriverUp provides daily information
on your investments. Investors receive monthly payments (net servicing fees).
Investments are expected to be held by the investor until maturity. "Sierra will not
maintain a secondary market for buying and selling any auto loan investment.“
AUTO FINANCE MARKET: $400 billion annually with total outstanding U.S. auto
loans at more than $1 trillion. Yields from 7-9% across multiple economic cycles.
Online marketplace for automotive financing
“DriverUp is the first company that offers auto loans as an investment opportunity
to accredited investors such as hedge funds, endowments, family offices, and high
net worth individuals.”
DriverUp is run by Dallas-based specialty finance company Sierra Auto Finance.
Loans serviced by Sierra.
Funding
Round
Announced
Amount/Involvement
SeriesA
February2015
$50million/EmeraldDevelopmentManagers,RREVentures.
SeriesB
September2015
$20million/SFCapitalGroup,EmeraldDevelopment
Managers,RREVentures.
2015
§  Founded
§  Launches online auto loan marketplace
2016
§  Appoints Match.com veteran Anthony Fratiani as chief technology officer
32
Income Smoothing
TIMELINE
2014
§  Founded
2015
HEADQUARTERS: Oakland, CA
CO-FOUNDERS: Jon Schlossberg (CEO), Quinten Farmer
Mobile money management application. Offers low income workers interest-free
credit in between pay periods.
Service is free for first 30 days, then $3/week subscription charge covering Even's
service. Automatic withdrawal from customer’s account every Friday.
Requirements of the customer: job, bank account, and equipped with a
smartphone.
Application also manages customers money through the customer’s bank
account, essentially ensuring the customer has a steady income even if
unexpected things occur. Earn less than your average paycheck, Even provides
interest-fee funding to bridge the difference. Earn more than your average
paycheck and Even takes out some of the extra money as payback for down days.
No incentive to offer loans to its customers.
Still in pilot mode. Currently limited to income from one job per customer, and
currently does not work for freelancers. The company plans to open up to
freelancers in 2016.
NOTABLE BACKERS: Keith Rabois (Partner, Khosla Ventures), Kevin Systrom
(Co-founder and CEO, Instagram), Sam Lessin (Formerly VP, Product at
Facebook), Michelle Wilson (Former VP & GC at Amazon), Tom Brown (Partner,
Paul Hastings), Andrew Kortina (co-founder, Ven.mo)
§  $1.5 million seed round investment led by Khosla Ventures and 12 other investors
Personal Credit with a Social Boost
TIMELINE
2014
HEADQUARTERS: Fort Worth, TX
FOUNDER: Ken Rees (CEO)
LOAN ORIGINATION: Balance sheet lender
LOANS: (see chart below – as of January 2016 (MarketWatch)) Offers three
products: RISE, a personal loan; Elastic, a paycheck advance; Sunny, a personal
loan for U.K. customers. Elastic is offered by Republic Bank & Trust Company.
Operates in the US, UK
Transforming the non-prime lending industry.
Rates starting a third lower than the standard payday loans.
Credit scoring model: 11th generation, 10,000+ data points.
“One of the first to develop a risk-based pricing model utilizing technology and risk
analytics focused on the non-prime credit industry”
According to its SEC prospectus, “Elevate's two U.S. products carry average
annualized interest rates of 88 percent and 176 percent, according to the
prospectus.” - CNBC
$2.6 billion in loan originations, 1.3 million customers served
§  Launched, spun out from Think Finance
§  Study released co-authored by Elevate on the financial reality of the “New Middle
Class”. Study finds that 71% of Americans have at least some debt, excluding
mortgage debt
2015
§  February: Total loan originations now roughly $450 million
§  As of March, the RISE product surpassed $500 million in loans to more than 224,000
customers. 62% of RISE customers have seen their rates drop due to positive
payment behavior
§  Sarah Cutrona, chief counsel and EVP Compliance, selected to serve on the State
Regulatory Registry Industry Advisory Council. Will help assist Board of Managers
and the Nationwide Multistate Licensing System Policy Committee
§  Launches Sunny Plus in the UK with a monthly interest rate of 10.5% (half that of
typical payday loan). Available to customers who wish to borrow £1,000 - 2,500 for a
term of 14 months
§  Increased its credit facility with Victory Park Capital by $70 million to $385 million
§  Hosted its second annual "Finding Common Ground" panels in an effort to "continue
developing better products for the millions of undeserved Americans that make up
the New Middle Class." Elevate held its second panel in 2015
§  Elevate pushes new survey on the state of the middle class. Across all income
levels, 35% of Americans reported experiencing financial difficulties within the past 6
months
2016
§  Was expecting to be the first venture-backed IPO of 2016, but postponed its IPO due
to difficult market conditions
§  Taps Joan Kuehl as the company’s first chief information officer
§  Saundra Schrock, a managing partner at Equanimity Leadership Solutions, LLC,
joined Elevate's Board of Directors
36
TIMELINE
2012
§  Graduated from Y Combinator accelerator having raised $4.5 million in seed
financing from those including Andreessen Horowitz, Google Ventures and Kleiner
Perkins Caufield & Byers
§  Launched publicly
HEADQUARTERS: San Francisco, CA
CO-FOUNDERS: Sasha Orloff (CEO), Jacob Rosenberg (CTO, stepbrother)
2014
§  Secured $50 million credit facility from Victory Park Capital
LOAN ORIGINATION: Balance sheet lender
§  As of April 2014, LendUp raised $64 million in institutional funding and debt financing
SINGLE-PAYMENT LOAN: $100 - $500. Terms: 7-45 days (vary by state)
§  Opened up its API to other firms/organizations. API includes: underwriting,
transaction processing, customer service, collections and compliance, and
INSTALLMENT LOAN: Up to $1,000 for as long as a year (if repeat
notifications. Custom API for each partner
customer). Interest rates from 29%. Data reported back to all three major
§  Partnered with Moneygram allowing LendUp borrowers to use MoneyGram’s
Express Payment Service to repay their loans (offline). The service is available at
credit bureaus. LendUp also charges a loan fee, deferred deposit fee, and a
39,000 agent locations across the United States
fee for a returned customer payment which are all dependent on the
2015
regulatory of framework of the state in which a borrower lives.
§  Partnered with Beneficial State Bank to offer the Personal Builder Loan in CA, OR,
and WA. The new type of loan includes loan amounts higher than typical payday
Orloff’s experience includes working in microfinance with the Grameen
loans, repaid over multiple months with payments reported to credit bureaus
Foundation and the World Bank, as well as a variety of positions at Citigroup.
§  Launched a nation-wide credit card product, the L Card
2016
Rosenberg’s experience includes CTO of Zynga, 80th employee at Yahoo
§  Series B funding will help as the company expand the L Card, currently in beta,
Markets itself as a better alternative to payday loans that lowers fees,
which provides functionality tailored to nonprime customers
§  In a blog post, CEO Sasha Orloff responded to the announcement by Google that it
increases accesses to credit, and gives customers the chance to improve
would ban ads for payday lenders offering APRs above 36%. In a long-explanation of
their credit history.
LendUp's business, Orloff noted that LendUp has saved its customers more than
$16 million in 2015, and, as of May 2016, saved customers a further $16 million.
Offers loans in 23 states currently and credit card nationally. The L Card is
"More than 90 percent of our active users have access to credit-building loans within
issued by Beneficial State Bank, Member FDIC, pursuant to a license from
two years. And we've taken customers from having credit scores in the 300s two
years ago to having a credit card today,“ he added
Visa U.S.A. Inc.
Technology uses Fair Credit Reporting Act-compliant data sources to approve
applicants with ability and willingness to repay.
All products are based on a ladder that allows customers to validate and
Funding
Announced
Amount/Involvement
improve credit worthiness through repayment and completing financial
Round
literacy online courses. Looks to help customers with credit scores of less
SeriesA
November2013 $14Million/GoogleVentures,DataCollec?ve,QEDInvestors
than 680 gain access to more affordable products
SeriesB
January2016
$50Million/SusaVentures,DataCollec?ve,GoogleVentures,QED,
KaporCapital,VictoryPark,andothers.
37
TIMELINE
2005
§  Founded as Progreso Financiero, a platform dedicated to economic advancement of
lower-income Hispanic families
2008
HEADQUARTERS: Redwood City, CA
CO-FOUNDERS: James Gutierrez and Gabriel Manjarrez
CURRENT CEO: Raul Vazquez
Formerly known as Progreso Financiero
LOAN ORIGINATION: Balance sheet lender
LOAN: $350 (starter loans) - $7,000 (repeat customers). Terms: 6 – 35 months.
Fixed payments. Average APR: 36 percent – NYT (2014)
“We schedule payments to match your pay period (usually every other week or
two times a month) and calculate a payment amount we think you can afford
based upon your income and debts/expenses.”
New model for payday lending - lower rates across a longer term. Report accounts
to Experian and TransUnion.
Oportun is a CDFI with branches located in supermarkets, malls and
neighborhoods. Operates in 180 locations. 1.3 million loans totaling more than
$2.2 billion have aided roughly 690,000 customers as of December 31, 2015.
Customers have saved nearly $350 million in interest and fees.
2012 FDIC Study: Nearly half of US Hispanics are under-banked or unbanked.
“As of September 30, 2015, approximately 48 percent of all Oportun customers
had no credit score when they first applied with Oportun.”
Currently available in the following states: California, Texas, Illinois, Utah, Nevada.
FundingRound Announced
Amount/Involvement
SeriesB
March2007
$4.4Million/GreylockPartners
SeriesC
May2008
$11Million/GreylockPartners,CFSI,CRV,MadroneCapital
Partnersandothers.
SeriesD
June2010
$28Million/MadroneCapital,GreylockPartners,CRVand
DAGVentures.
SeriesE
January
2011
$20Million/CoreInnova?onCapital,GreylockPartners,
MadroneCapitalPartners,SVBCapital,CRV,DAGVentures,
andothers.
§  CFSI Catalyst Fund LP announced investment in Progreso Financiero
2009
§  Gutierrez, of Progreso Financiero, was one of the founding members of the Coalition
for New Credit Models in Washington, D.C.
2010
§  Certified as a Community Development Financial Institution (CDFI)
2011
§  150,000 microloans totaling $140 million lent to Hispanic customers
2012
§  Names Raul Vazquez CEO, Board Member
§  TIO Networks Corp. expands bill paying options for the Hispanic community through
a partnership with Progreso Financiero
2013
§  Issued first securitization in June
2014
§  Provided 700,000+ in affordable loans totaling more than $1 billion for the Hispanic
community, helping 370,000 individuals build credit. Average loan in 2014 is roughly
$1,650 with a term of 14 months
§  Completes second ABS for $102 million. Bonds secured by a pool of the Company's
installment loans
2015
§  Changes name from Progreso Financiero to Oportun
§  Closes $90 million equity raise
§  Announces that the company closed $112 million ABS, secured by a pool of
installment loans, and completed a $70 million whole loan flow sale program which
closed in November 2014
§  Announces 4th securitization of $125 million of two-year, asset-backed bonds
secured by a pool of its installment loans
§  Chris Larsen, co-founder and CEO of Ripple Labs, steps down from Oportun Board
of Directors
§  Oportun CEO Raul Vazquez appointed to Federal Reserve’s new Community
Advisory Council
2016
§  Appoints Match.com veteran Anthony Fratiani as chCompletes 5th securitization of
roughly $125 million of two-year, asset-backed bonds secured by a pool of its
installment loans
38
§  Intuit appoints Raul Vazquez to its Board of Directors.ief technology officer
Purchase Financing
TIMELINE
2013
§  Launched
2014
HEADQUARTERS: San Francisco, CA
CO-FOUNDERS: Max Levchin (CEO), Nathan Gettings (Palantir Technologies cofounder), and Jeffrey Kaditz.
LOAN ORIGINATION: Cross River Bank
LOAN: Closed-end installment loans. Terms: 3, 6, or 12 months. Cross River
Bank pays the merchant on the consumer's behalf, while the consumer promises
to repay the principle amount plus any additional finance charges. Fixed APR:
10% - 30% (0% APR offered at select merchants). First payment due roughly 15
days after Cross River Bank pays a merchant. Customers can take out multiple
Affirm loans at once, though each loan evaluated separately.
Focuses its lending on the millennial market, individuals under the age of 35.
Alternative to credit card via installment loans. More than 500 merchants who offer
its loans as customers check out.
Affirm has identified more than 70,000 personal qualities that it thinks could
predict a user’s likelihood of paying back a loan
Funding
Round
Announced
Amount/Involvement
SeriesA
-
-
SeriesB
June2014
$45million/KhoslaVentures,LightspeedVenturePartnersandNycaPartners
SeriesC
May2015
$275million/SparkCapitalGrowth,Jefferies,AndreessenHorowitz,Khosla
VenturesandLightspeedVenturePartners.
SeriesD
April2016
$100million/FoundersFundwithexis?nginvestorsincludingLightspeedVenture
Partners,SparkCapital,KhoslaVentures,AndreessenHorowitz,Jefferiesandother
newinvestors.
§  Announces Affirm Split Pay – splits purchase price and small amount of interest into
monthly payments for the customer. Merchant receives payment up front, Affirm
takes on the credit risk. – Competition with PayPal’s Bill Me Later service
2015
§  Foray into education by providing installment loans to students attending coding
bootcamps. Terms: 12 to 18 months with rates of 6% to 20% for some of the
bootcamps and 6% to 30% for General Assembly, and most loans will require no
payments in the first six months
§  Acquires LendLayer, a startup that provides lending for accelerated learning
program. LendLayer has partnered with a number of coding camps offering payment
plans for accelerated learning programs
§  Partnership with Shopify to expand Affirm brand across US-based Shopify stores
2016
§  Acquires personal finance management app Sweep, Inc. - the "first step" in moving
beyond point-of-sale financing. "A new, more powerful product under the Affirm
brand will combine the technologies and visions of both companies and is scheduled
for release later this year"
§  Appoints eBay Executive Carl Gish as Affirm’s first CMO
§  Announces partnerships with Expedia.com and Eventbrite offering monthly
payments for travel and events
40
TIMELINE
2014
§  Founded
HEADQUARTERS: La Jolla, CA
CO-FOUNDERS: Derek Barclay (President) and Kristin Slink (COO)
CURRENT CEO: Steve Connolly
LOAN ORIGINATION: First Electronic Bank
LOANS: $1,000 - $25,000. Discount rates: As low as 1%. Interest rates from
13.99%. Lower minimums for LoanHero’s lease programs starting at $350. Loan
terms: 12-60 months (depending on loan amount). Low interest rates powered by
marketplace lenders and credit unions.Operates in the US, UK
FOCUS: Prime consumers. Industries: consumer goods, home improvement, auto
services and repair, medical devices and services, other (funeral, pet… etc.)
Allows merchants to offer no interest promotions (if paid in full) for 6, 12, and 24
months. Interest accrues during promotional period, but if purchase balance is
paid in full by end of the period and a consumer has made all required monthly
payments, then interest is waived.
"Point-of-sale financing is a $500 billion industry that is ripe for disruption." - Derek
Barclay
Incubated out of EvoNexus
Operational in 5 states, growing to 50 states "in the very near future“ Currently in
talks with partnering with undisclosed lender.
2015
§  Secures $1.7 million in seed funding and $20 million in debt financing for its platform
§  Launches platform in April
2016
§  Received an additional $2.5 million in Seed funding from Alsop Louie Partners and
Mucker Capital
§  Expands footprint to 50 states in partnership with First Electronic Bank
§  AAMCO Partners With LoanHero, offering consumer financing options to its
franchisees
41
TIMELINE
2000
§  I4 Commerce founded
2002
§  I4 Commerce launches Bill Me Later
HEADQUARTERS: San Jose, CA
BILL ME LATER FOUNDER: Gary Marino. Marino is currently SVP, Americas and
Credit Products at PayPal.
LOAN ORIGINATION: BalaLine of credit provided by Comenity Capital Bank, who
also determines a borrower’s creditworthiness and pays the merchant upfront
CREDIT: If approved, credit line of $250 minimum. APR: 19.99% (standard purchases
and cash advances). Minimum interest charge: $2. No annual fee, though there is a
late fee (up to $35 ($25 for first time offenders)) and a return check fee (up to $25).
APR and minimum interest charge is waived if consumer pays the purchase in full by
the due date (at least 25 days after close of each billing cycle).
PROMOTIONS:
§  "No payment and No interest": Purchasing an individual item at $99 or above,
you can have the option of making no payments during deferred interest period
if the individual purchase is paid in full within 6 months.
§  “No interest payments” if you meet the minimum monthly payments during
deferred interest period (6+ months depending on what's disclosed when the
transaction is made). If you decline or fail to fully pay off the purchase during
promotional period, 19.99% APR will be charged to account from original
posting date.
§  “Easy Payments” which allows users to pay for purchases in monthly
increments. Two types: Easy Payments + No Interest Purchases – no interest if
balanced paid in full by the end date; Financed Easy Payments Purchases –
subject to interest at an APR disclosed at the time of purchase not to exceed
19.99%. Must meet minimum purchase amount.
Users must have a PayPal account. PayPal Credit available at most stores that accept
PayPal.
Millennials now account for 33% of PayPal Credit users, up from 25% two years ago.
(Forbes – December 2015)
2006
§  I4 Commerce secures $640 million debt financing from Citigroup
§  $27.4 million Series A from Azure Capital Partners, Crosspoint Venture Partners,
Kingdon Capital, Upfront Ventures
2007
§  I4 Commerce Changes Name to Bill Me Later, Inc.
§  Amazon invests an equity stake in Bill Me Later
2008
§  eBay acquires Bill Me Later for $1.2 billion ($820 million in cash, $125 million in
outstanding options)
§  Prior to acquisition, Bill Me Later was pondering going public
2012
§  PayPal opens up Bill Me Later to small, mid-sized online businesses. No interest
financing for 6 months on purchases of $99 or more
2014
§  Bill Me Later rebrands to PayPal Credit
§  Launches in the UK, Germany
2015
§  Expands credit offering – allowing retailers to decide the number of months for
repayment and interest rate that works best for their customers. Can also choose
interest-free credit options for the first time
§  PayPal settles with the CFPB for $25 million after complaints arose that it had
illegally enrolled customers into Bill Me Later
§  Thanksgiving – Cyber Monday: PayPal Credit used for more than $166 million in
purchases, an increase of 32% from last year. Fastest growing parts of PayPal’s
business
§  PayPal 10-Q: “In May 2015, we completed an arrangement with certain investors
under which we sold participation interests in certain consumer loans receivable
originated using our PayPal Credit products with a gross book value of
approximately $708 million”
2016
§  PayPal 10-K: “As of December 31, 2015 and 2014, approximately 53.6% and 54.2%,
respectively, of the pool of U.S. consumer receivables and interest receivable
balance was due from U.S. consumers with FICO scores greater than 680, which
are generally considered "prime" by the consumer credit industry”
§  PayPal 10-Q: “The total consumer loans receivable balance as of March 31, 2016
and March 31, 2015 was $4.0 billion and $3.6 billion, respectively, reflecting a year
over year increase of 11%. The increase in consumer loans receivables was due to
the growth in the portfolio of loans receivable outstanding arising from consumers
who chose PayPal Credit as a funding option”
Lending via Your Social Network
TIMELINE
2012
HEADQUARTERS: San Francisco, CA
CO-FOUNDERS: Skylar Woodward (CEO), Jean Claude Rodriguez-Ferrera
Massons and Matt Flannery
Matt and Skylar were founding members of Kiva
LOAN ORIGINATION: Your “Puddle”
Contribute as much as you like to your "Puddle". Borrow up to 5X the amount
contributed and pay back the money borrowed in 3 or 6 months. No credit score
required. Fixed transaction fee: $3 (assessed in part every month). “Over the
course of each borrowing cycle, you will be charged no less than $3.00” Additional
monthly fee as well, and dependent on the amount borrowed. Late fee: 2X the
monthly fee. No interest beyond a set monthly fee.
“If your borrow is less than five times your contribution, you will be assessed fees
equivalent to the borrow and contribution that would have given you access to the
pooled funds.”
Modeled after Rotating Savings and Credit Associations, which allow typically poor
individuals to organize and sustain their own credit and savings system without
the need to access formal banking channels. Puddle moves this model online.
Platform essentially allows you to borrow through your social network (hence the
need for Facebook). The platform allows you to rate the trust of members of your
“puddle” and manage relationships. Self-regulating system.
Unlike other peer-to-peer lending platforms, lenders do not make a profit.
Incentive to participate is that lenders might themselves need funding one day.
§  Launched with $2 million in seed funding from Andreessen Horowitz, Google
Ventures and Draper Associates
2015
§  Two-year trial as of February with repayment rates above 98%
44
Education Financing
TIMELINE
2014
HEADQUARTERS: New York, NY
CO-FOUNDERS: Zander Rafael (CEO), Amit Sinha (CFO), Vishal Garg
(Chairman)
LOAN ORIGINATION: Climb Investco, LLC which pursues its own licensure in
each state
LOANS: Average size is $10,000. Fixed rate APR: 5% - 15% (may include an
origination fee) for tuition or education expenses. Terms: 2-5 years determined by
affordability. Interest only grace period while a student is in school, pay down
principle after graduation. Applying with a co-borrower or selecting auto pay will
help reduce the rate.
UNDERWRITING: incorporates future income projections for each program
funded as well as over 10,000 other data points: full debt-to-income, affordability,
historical repayment, income and job stability layered on top of full school
underwriting. Average increase in salary post loan: ~$20K. Result of underwriting
being driven by ROI to students.
Largest funder of skills based education and coding bootcamps in the USA
§  Funds students in skills based training and high ROI education– partner
schools teach: welding, coding, IT, medical, construction, manufacturing
skills etc. as well as alternative / online education platforms delivering
college and grad school at drastically reduced prices
§  School partners assessed for quality and structure aligns school incentives
with student outcomes – school and lender both work with best interest of
student in mind
FundingType
Announced
Amount/Involvement
IniWal
Funding
2015
$3.1millionfrom1/0Capital,RidgeRoadandSeer
ForwardFlow
Agreement
2015
$400millionfromtop3globalassetmanager
§  Founded in New York by a team that previously worked together to launch Future
Finance, which is now the largest private student lender in Europe
§  First loans funded at two initial schools in Q3
§  Automatic underwriting engine launched in Q4
§  10 school partners at the end of 2014
2015
§ 
§ 
§ 
§ 
$3.1 million initial funding from 1/0 Capital, Ridge Road and Seer
Raised $400 million forward flow agreement from a top 3 global asset manager
School platform launched to manage financial aid for school partners
Partnered with 40 schools at end of 2015
2016
§  Living expense loans launched
§  Instant decisions launched for over 75% of applicants
§  Partnered with over 50 schools in Q2 2016
46
TIMELINE
2012
§  Student loan pilot launched at Wharton
2013
HEADQUARTERS: New York, NY
FOUNDER: David Klein (CEO), Michael Taormina, and Jessup Shean
LOAN ORIGINATION: CommonBond Lending LLC
STUDENT LOAN REFINANCING: Up to $500,000. Variable APR: 2.14% - 5.94%.
Fixed APR: 3.50 - 7.74%. Hybrid APR: 3.79% - 6.23% (Fixed rate first 5 years,
then variable for the last 5 years). All with 0.25% autopay discount. Requirements:
CommonBond underwriting criteria, eligible state where CommonBond lends
MBA LOANS: Max: full cost of attending the school. 10-yr fixed: 6.23% APR; 15yr fix: 6.72% APR. All with autopay. Origination fee: 2% added to principle balance
of the loan. Required: CommonBond underwriting criteria, attendance at one of 29
eligible MBA programs
PERSONAL LOANS: $1,000 - $50,000. Variable: 4.49% – 11.34% APR; Fixed:
5.74% – 12.99% APR. All with 0.25% autopay discount
No defaults or delinquencies in portfolio to date.
$650 million raised in debt/equity since inception. Two securitizations to date with
investment-grade ratings from Moody’s and DBRS.
Funding
Round
Announced
Amount/Involvement
SeriesA
September2013
$8.65million/TribecaVenturePartners,TheSocial+
CapitalPartnership,VikramPandit,ThomasGlocer,and
TomKalaris.
SeriesB
September2015
$35million/AugustCapital,NycaPartners,Victory
ParkCapitalandexis?nginvestors
§  National launch
2014
§  Surpasses $100 million in loans funded
§  Introduced the industry’s first hybrid loan for its student loan product
2015
§  Launched its “Investor Marketplace” – a first-of-its-kind financial marketplace in
student loans, where qualified investors purchase loans directly on the
CommonBond platform
§  Nelnet Inc., a leading student loan servicer, committed to purchasing at least $150
million of loans on the CommonBond platform
§  Completed $100 million in securitizations of student loans. First time Moody’s gave
an investment-grade rating to a first-time issuer in marketplace lending
§  Closed $275 million in debt financing from Barclays, Macquarie Capital, and others.
CommonBond surpasses $625 million in total funding to date, across both equity
and lending capital
2016
§  Surpasses $500 million in funded loans
§  Completes $150 million, investment-grade rated securitization led by Barclays and
Goldman Sachs
§  Personal loan pilot launches
47
TIMELINE
2013
§  Founded
HEADQUARTERS: San Francisco, CA
Student loan refinance in particular
CO-FOUNDERS: Louis Beryl (CEO), Benjamin Hutchinson (COO)
LOAN ORIGINATION: Balance sheet lender
STUDENT LOAN REFINANCING: Beginning at $5,000. Fixed rates from 3.50%
APR to 7.05% APR (with autopay) and variable rates from 2.13% - 5.35% APR
(with autopay). Interest rates on variable loans are capped at 8.95%, 9.95% or
11.95% depending on length of the loan. Requirements: Debt is from paying for a
Title IV accredited school, employed or have a written job offer, primary borrower
on the student loans that the borrower is refinancing, not requesting new loans for
future schooling, and other requirements. Offered in 37 states and Washington,
D.C.
PERSONAL LOANS: $2,000 - $50,000. Interest rates from 5.25% - 12% APR
(merit based interest rate determined during approval process). Term 1-3 years.
Requirements: Reside in a state in which Earnest lends, and other requirements.
Offered in 37 states and Washington, D.C.
Earnest manages and services the loan throughout its life.
Make 6 consecutive on-time payments, can request to skip a payment (minimum
payment on the loan will rise slightly as a result).
Merit-based credit scoring algorithm with 80-100,000 data points.
Big push into lending for coding bootcamps.
Funding
Round
Announced
Amount/Involvement
SeriesA
January2015
$17million/Maveron,AndreessenHorowitz,FirstRound
Capitalandotherfirmswithpriorinvestment.
SeriesB
November2015
$75million/BaderyVentures,AdamsStreetPartners,
Maveron,otherinvestors.
2014
§  Launched. Received $15 million seed funding from Andreessen Horowitz, First
Round Capital, Maveron, Atlas Venture, and others
§  Debuts personal loans with “merit-based” interest rates
§  Ended 2014 with $8 million in personal loans lent
2015
§  Debuts student loan refinancing
§  Secured $200 million in debt financing led by New York Life
2016
§  Opened a $150 million warehouse facility with Goldman Sachs. Total warehouse
facilities to date: $350 million
§  Completes first securitization, a $112 million student loan refinancing, led by Credit
Suisse. Loans are A-rated by DBRS
§  Completes second securitization totaling $225 million, becoming the "only student
loan refinancer to price consecutive securitizations in the first half of 2016 so far."
Total securitization issuance now totals nearly $340 million
§  Introduced Earnest for the iOS
TIMELINE
2011
§  Launched (originally focused on student loan refinancing)
2012
§  Launched nationwide rollout of its Community Loan Program connecting alumni with
students after initial success at Stanford.
§  Stops lending after demand for loans far outstripped supply from alumni
2013
HEADQUARTERS: San Francisco, CA
FOUNDER: Mike Cagney (CEO)
LOAN ORIGINATION: SoFi Lending Copr.
STUDENT LOAN REFINANCING: Variable rate: 2.14% - 5.94% APR (with
AutoPay), Fixed Rate: 3.50% - 7.74% APR (with AutoPay). “Currently, interest
rates for SoFi variable rate student loans are capped at 8.95% or 9.95%,
depending on the term.” Terms: 5, 7, 10, 15, 20 years.
REQUIREMENTS: Minimum loan amount: $5,000 (or higher depending on the
state). MOHELA is SoFi’s third-party loan servicer for student loans. Focus: Prime
and super-prime borrowers. Average borrower FICO score of 780 and income of
approximately $150,000 (LendEDU - January 2016)
Funding
Round
Announced
Amount/Involvement
SeriesA
September2011/
March2012
$8million($4millioneach)/BaselineVentures,Innova?onEndeavors,
RonSuber,UluVentures
SeriesB
September2012
$77.2million/BaselineVentures,DCM,RenrenInc.
SeriesC
April2014
$80million/DiscoveryCapitalManagement,PeterThiel,WicklowCapital,
exis?nginvestors.
SeriesD
February2015
$200million/ThirdPointVentures,WellingtonManagementCompany
LLP,Ins?tu?onalVenturePartnersandexis?nginvestors
SeriesE
December2015
$1billion/SojBank,ThirdPointVentures,WellingtonManagement
CompanyLLP,andothers
Recommences lending after additional capital from alumni/institutional investors
Expands selection of loan products to include 5, 10 and 15 year fixed interest loans
Supported landmark deal to by Congress to tie student loan interest to market rates
Offers assistance to borrowers in career transition. Marks first time a private lender
offers such services to student loan borrowers
§  First rated securitization completed. First of its kind from P2P lender
§ 
§ 
§ 
§ 
2014
§  Closes $251 million securitization of refinanced student loans. S&P and DBRS rated
senior notes A, marking first such rating by S&P for a marketplace lender
securitization
§  Surpasses $1 billion in loans funded. Fastest marketplace lender to reach such a
milestone
§  Moves into home mortgages
§  Completes $303 million securitization rated by S&P, Moody’s and DBRS. First
marketplace lender to receive investment grade ratings from S&P and Moody’s
2015
§  Branches out into personal loans
§  Fourth securitization completed in January totaling $313 million
§  Announces Parent Loans, an alternative to Federal Parent PLUS loans, other private
loans to help parents fund a child’s education
§  Closed a $411 million securitization of student refinanced loans – it’s largest
securitization to date, and the highest rated
§  Citizens Bank has bought $200 million of loans from SoFi and has committed to
buying $300 million more
§  Prices another securitization at $418 million. First fintech company to earn AAA
DBRS Rating. The 6th such securitization to-date for the company
§  Raised $1 billion – “the largest single financing round in the fintech space to date”
§  Chinese social networking firm Renren Inc. completed an additional $150 million
preferred stock investment in SoFi. In April, the company said it owned 24% of SoFi,
after $100 million invested
§  Surpassed $6 billion in funded loans across mortgages, personal loans, and student
loan refinancing. First marketplace lender to reach $6 billion in under four years
2016
Surpasses 140,000 members and $9 billion in loans funded to date
Launches Wealth Management for members
Obtains Fannie Mae seller servicer status for mortgage
No longer factors FICO scores into its qualification process for its student loan
refinancing product
§  Becomes the first online lender to receive AAA rating from Moody's on a $380 million
offering backed by student loans
§ 
§ 
§ 
§ 
III. Small Business Finance
Marketplace Platforms: Retail Investor Focus
TIMELINE
2013
§  Founded
HEADQUARTERS: Reston, VA
2014
CO-FOUNDERS: Mark Rockefeller (CEO), Mickey Konson (COO)
§  $1.2 million in seed funding provided by Accion
Social lending marketplace connecting small businesses with investors.
2015
LOAN ORIGINATION: Loans funded from auction and may not equal the amount requested
§  Debuts StreetShares Auto-invest feature allowing retail investors to program their
small business investments to make automatic bids based on loan requirements and
LOANS: $2,000 - $100,000. Maximum loan amount cannot exceed 20% of annual business
risk tolerance
revenue. Term: 3, 6, 12, 18, 24, 36 month term loans. Deduction of fixed, weekly payment
§  Secures $200 million in funding from Direct Lending Investments, Community
from bank account. Requirements: In business for at least a year (sometimes 6 months) or
Investment Management and Eagle Bank Corp, with a focus on funding veteran
small businesses. Announces pre-approvals for 6 month loan and two year loan
$100,000 in annual revenue, incorporated, reasonable credit. Origination fee either 3.95% or
products
4.95%. Failed payment fee of $10. Borrowers also subject to additional $10 fee if payment
not received in 7 days from the due date. A loan may be approved for an amount lower than 2016
§  Becomes the first online lender in the US to receive SEC approval for its
the full requested amount by the Borrower Member.
crowdlending product created through Regulation A+ of the JOBS Act
Focus on "affinity lending," paying particular attention to the small business needs of U.S.
veterans. “We have the opportunity to define our legacy through a collective act of “second
service” to our country. By starting and running successful businesses, we become a
catalyst for the real, sustained economic growth that our country desperately needs.” – Mark
Rockefeller (CEO)
Two investment opportunities (qualified investors must have StreetShares account):
§  Streetshares RegA+: Invest no more than 10% of individual net worth or annual
household income. Streetshares “become the first lender in the country to be
qualified by the U.S. Securities and Exchange Commission (SEC) to use funds from
public investors to back loans to small businesses.”
§  Streetshares Pro: Must be accredited. May not invest more than 10% of individual net
worth, exclusive of home, home furnishings, automobile.
Minimum investment increments: $25.
BOARD OF ADVISORS: Raj Date (former Deputy-Director of the CFPB), General (Ret)
George Casey, Pete Hartigan (Formerly on the founding team at SoFi), Former SEC
Commissioner Troy A. Paredes
FundingRound
Announced
Amount/Involvement
SeriesA
March2016
$7million/PivotInvestmentPartners,FenwaySummerVentures
52
Marketplace Platforms: Accredited and/or
institutional investors (solely)
TIMELINE
2013
§  Founded
2014
HEADQUARTERS: San Francisco, CA
CO-FOUNDERS: Denise Thomas (CEO), Steve Pelletier (COO)
LOAN ORIGINATION: Cross River Bank
LOANS: $100,000 - $5 million. Interest rates: 8% - 12%. Funding in 30 days or
less. Terms: 3-7 years. Available nationwide. No prepayment penalties on loans
under $1 million. No personal collateral. Origination fee: 4.5%. Processing fee:
0.5%. “An optional 6-month interest-only period is standard for all new unit
financings.”
LOAN CHARACTERISTICS: Average loan size: $399,980. Term: 67.6 months.
Interest rate: 8.66%. Borrower equity (new units): 27.54%.
BUSINESS BORROWER CHARACTERISTICS: Debt to income: 23.09%. Asset
coverage ratio: 14.1x. Debt service coverage ratio: 2.0x. FICO: 742.
Franchise loan marketplace allows accredited and institutional investors to invest
in franchise loans. Securities issued through Apple Pie Finance.
FundingRound
Announced
Amount/Involvement
SeriesA
April2015
$6million/SigniaVenturePartners,FreestyleCapital,CampOneVentures,
QEDInvestors,ProsperMarketplacePresidentRonSuber.
§  Announced its franchise loan marketplace. Received $3.77 million in seed funding
from Freestyle Capital, QED Investors, Signia Venture Partners and angel investors.
Marketplace will launch in Q1 2015
2015
§  Marketplace launched
§  Secured $28 million in debt capital commitments from various individuals and
institutions
§  As of April, $40 million in capital demand from borrowers
§  As of October, Apple Pie has partnered with 28 brands for franchise loans
2016
§  Names Geoff Thompson as General Counsel. At present, ApplePie has partnered
with 35 brands
54
TIMELINE
2013
§  Founded and launched
HEADQUARTERS: New York, NY
CO-FOUNDERS: David Haber (CEO), Peyton Sherwood (CTO)
LOAN ORIGINATION: According to Haber, “we're not actually a balance sheet
lender, we are structured more as a marketplace, but we have today at least one
large institutional buyer of our loans, which is Jefferies.” (Lend Academy interview
– December 2015)
TERM LOANS: $50,000 - $500,000. Origination fee of 3% of approved loan.
Loans funded by community of accredited investors, institutions. Interest rates: 6%
- 23%. APR: 8% - 25%. Terms: 1-3 years. Semi-monthly payments
AVERAGES: Borrow: $170,000. APR: 11%. Terms: 3 years. Credit Score: 730.
(Forbes – June 2015)
REQUIREMENTS: Based in US (except ND, NV, SD, TN, VT), more than two
years operating history, generate more than $200,000 in annual revenue sales,
personal guarantee and collateral against business assets. Those with credit
score of 640 or more likely to qualify.
INVESTORS: Spark Capital, Jefferies, homebrew, Founder Collective,
Collaborative, Red Swan, Eagle Cliff, and others.
Funding
Round
Announced
Amount/Involvement
SeriesA
June2015
$10million/JefferiesGroup,SparkCapitaland12other
investors.
2014
§  $1.5 million seed funding from Founder Collective
2015
§  As of June: No defaults or delinquencies
§  Partners with Front Desk providing its customers with access to small business
loans
2016
§  Partners with Booker, a cloud-based business management service that helps small
businesses create a seamless experience for customers purchasing goods and
services
§  Partners with ICB, the world's largest bookkeeping membership organization,
allowing ICB USA members affordable financing solutions for their clients
55
TIMELINE
2015
HEADQUARTERS: New York, NY
CO-FOUNDERS: Brett Baris (CEO, Board Member), Mark Rambler (President
and COO, Board Member)
LOANS: $10,000 - $250,000. Terms: 1-3 years. Fixed interest rates starting at
8%; one-time origination fee of 2% - 6%. Monthly repayments. Fully-amortizing
term loans. No pre-payment fee.
FOCUS: Prime credit small business owners.
REQUIREMENTS: 6+ months in business, currently generating revenue, business
owner has strong personal credit, no commercial or personal bankruptcies within
the last 5 years, and not located in the following states: NV, ND, SD, VT.
Platform matches small business lenders with institutional investors. Borrowers
sourced from partners including Dun & Bradstreet.
PARTNERS: Dun & Bradstreet, FIS Global
§  Dun & Bradstreet: a leading provider of credit services to small businesses
in the U.S. Can refer qualified businesses in need of funding to Credibility.
(Source borrowers)
§  FIS: Source banks that are interested in providing lender capital to fund
loans originated on the platform. (Source investors)
§  Launched platform in April
§  Partnered with First Associates Loan Servicing to provide full servicing to Credibility’s
platform
§  Signed the Small Business Borrower’s Bill of Rights
§  Signed a data partnership with Orchard
§  John Birge joined as CCO. Previously focused on small business risk management
at American Express
§  Brian Starke joined as CTO; former Principal Engineer at Bread Finance where he
built their loan origination platform
56
TIMELINE
2010
§  Launched in the UK
2013
§  Launched in the U.S.
2014
HEADQUARTERS: London, UK (U.S.-based operations: San Francisco, CA)
CO-FOUNDERS: Samir Desai (CEO), Sam-Hodges (U.S. Managing Director),
Christian Grobe (CE Chief Operating Officer), Matthias Knecht (CE Managing
Director), James Meekings (UK Managing Director), Andrew Mullinger (Head,
global credit and risk).
LOAN ORIGINATION: FC Marketplace, LLC
BUSINESS LOANS: $25,000 - $500,000. Interest rates: 5.49% - 27.79%
(depending on the life of the loan). Terms: 1-5 years. Origination fee: 1.49% 4.99%. Late payment fee: 10% of missed payment. Insufficient funds fee: $35.
GLOBALLY: Global marketplace lender connecting small businesses with
thousands of investors.$2 billion lent to more than 15,000 businesses, 15,000
loans funded, 50,000+ investors.
“Funding Circle's average customer generating annual revenue of $1.7 million and
borrowing $120,000 for three-and-a-half years.” (SF Business Times – March
2016)
Funding
Round
Announced
Amount/Involvement
SeriesA
April2011
$4.14million/IndexVentures
SeriesB
April2012
$16million/IndexVentures,UnionSquareVentures
SeriesC
October2013
$37million/Accel,IndexVentures,RibbitCapital,UnionSquare
Ventures
SeriesD
July2014
$65million/IndexVentures,AccelPartners,UnionSquare
VenturesandRibbitCapital.
SeriesE
April2015
$150million/DSTGlobal,BaillieGifford,afundmanagedby
BlackRock,SandsCapitalVenturesandTemasek
§  Rolled out a new risk tier for borrowers who have faced difficulty in obtaining loans,
and an opportunity for investors to see greater returns and diversification
§  Since US launch, lending in the US increased 500% with expectations that lending
will top $100 million by the end of the year
§  Acquires LeapPay integrating the company’s technology into the firm’s underwriting
process
2015
§  Launches fractional loan marketplace. Investors can buy fractions of loans from
$25,000 - $500,000, with terms between 1-5 years, and coupon rates between
6-21%. Minimum opening balance of $50,000 required, and minimum investment per
borrower payment dependent note of $500
§  Victory Park Capital will finance up to $420 million in loans through the platform in
the UK and US over the next three years
§  Partners with the National Small Business Administration
§  Co-author and original signer of the Small Business Borrowers’ Bill of Rights
unveiled in Washington, DC
§  Referral partnership with HR Block announced
§  Acquires Zencap, a German marketplace lender, pushing FC’s platform into Europe
§  Surpassed £1 billion in lending to UK small businesses, +46,000 jobs. Funding Circle
UK announces plan to float £150 million fund for small business investment, the first
peer to peer company to look at floating a fund. In November, the SME Income Fund
listed on the London Stock Exchange and raised £150 million with focus on US, UK
small businesses
§  Funding Circle UK announced that all new loans will be issued at fixed interest rates
set by Funding Circle
§  Partnership with the US Department of Commerce’s Minority Business Development
Agency (8 million minority owned businesses)
2016
§  Plans to boost its Bay Area staff by 10 percent. The company currently employs 190
people in San Francisco and 550 globally
§  “Hodges tipped his hand that big news on bank partnerships is also on this year's
agenda.” (SF Business Times – March 2016)
§  Announce Jörg Asmussen, former executive board member of the European Central
Bank, will join Funding Circle's Board
§  Talks have advanced regarding Funding Circle SME Income Fund Ltd participation in
a European Investment Bank financing project
§  Funding Circle, Lending Club, Prosper Marketplace launch Marketplace Lending
Association
57
TIMELINE
2006
§  Founded
2014
HEADQUARTERS: San Francisco, CA
FOUNDER: Renaud Laplanche
CURRENT ACTING CEO: Scott Sanborn (also President), Executive Chairman:
Hans Morris
Tom Green, VP, Small Business, overseas Lending Club’s business loan product.
LOAN ORIGINATION: WebBank
LOANS: $5,000 - $300,000. Fixed interest rate: 5.9% - 25.9% (loans) APR:
8-32%. One-time origination fee: 0.99 – 6.99%. Terms: 1-5 years. No collateral
needed for loans under $100,000. Variable rate for lines of credit: 6.25% - 21.85%.
REQUIREMENTS: 2 years in business, $75,000 in annual sales, no bankruptcies
or tax liens, own at least 20% of the business w/ fair/better personal credit. Credit
score 600+.
TYPICAL LC BORROWER: credit score of 700, 11 years in business, $1 million
in annual revenue. (NerdWallet – February 2016)
NOTABLE BOARD MEMBERS: John Mack, the former Morgan Stanley chief
executive, and Lawrence Summers, the former US Treasury secretary, Mary
Meeker of Kleiner Perkins Caufield & Byers, and others.
§  Emergence into small business lending. Begin to facilitate unsecured small business
loans. Initial Public Offering
§  Raised roughly $1 billion, valuing the company at $8.5 billion
2015
§  Partnerships including with Google, Alibaba, BancAlliance, HomeAdvisor, Citigroup,
Sam’s Club, Opportunity Fund… etc.
§  Response submitted to Treasury’s RFI on marketplace lending
§  New credit product for SMEs unveiled (small business lines of credit) providing
“convenient, flexible and affordable credit”
§  Co-author and original signer of the Small Business Borrowers’ Bill of Rights
unveiled in Washington, DC
2016
§  10-K: “As of December 31, 2015, our marketplace facilitated approximately $16.0
billion in loans since it first launched in 2007, of which approximately $3.3 billion
were invested in through notes issued pursuant to a shelf registration statement (the
Note Registration Statement), $5.5 billion were invested in through Certificates
issued by the Trust, and $7.2 billion were invested in through whole loan sales”
Balance Sheet Platforms
TIMELINE
1998
§  Launched. First company to develop and apply a Daily Remittance Platform
HEADQUARTERS: New York, NY
CURRENT CEO: Daniel DeMeo
LOAN ORIGINATION: WebBank (small business term loans and flexible payment
TrakLoan), CAN Capital Merchant Services, Inc., (Merchant Cash Advances),
CAN Capital Asset Servicing, Inc. (longer term, 2-4 year, installment loans)
SMALL BUSINESS TERM LOAN: $2,500 - $150,000 (single business), up to
$250,000 (multiple locations). Terms: 4 - 24 months. Requirements: gross revenue
of $4,500+, in operation for greater than 4 months.
MERCHANT CASH ADVANCE: $5,000 - $150,000 Purchase Price paid to
merchant. Collection of purchased receivables based on fixed percentage of daily
payment card sales.
INSTALLMENT LOAN: Loans from $50K - $100K. Terms: 2, 3 or 4 year terms.
Monthly repayment schedule. Rates starting at 12.9%. Origination fee: 2.99%.
Requirements: 1+ years in business and $350,000 in annual sales. Does not
operate in: CT, DE, MI, MN, MT, ND, NV, NJ, NY, RI, SD, IN, VT.
TRAKLOAN: Flexible payment loans (based on fixed percentage of payment card
sales) from $2,500 to $150,000.
Focused on providing capital access to underserved Main Street businesses.
Since launch in 1998, provided access to over $6 billion in capital to small
businesses.
Daily Remittance Platform - evaluates business-specific data from a wide variety
of banking, credit card processing and other sources. Platform for collecting daily
loan payments or remittances of purchased receivables and using that data, and
other information, to service and underwrite customers.
CAN Capital Small Business Health Index - Focus on small and mid-sized
business climate and financial product options.
Real-time platform and risk scoring models to assess and facilitate the provision of
capital to SMBs in the US.
Over 175,000 funding transactions since 1998
2012
§  $30 million funding round led by Accel with participation from QED Investors and
Ribbit Capital
2013
§  Capital Access Network rebrands as CAN Capital
§  Integrates online lending engine with PayPal allowing working capital funds to be
deposited into merchant PayPal accounts
§  Surpassed $3 billion in capital provided to small businesses since inception
§  Debuts CAN Mobile Funder tool for small businesses generating faster closing times
through the use of mobile technology
2014
§  Reaches $4 billion funding milestone
§  Raised $33 million in funding led by Meritech Capital Partners with increased
participation and ownership from existing investor Accel Partners. Meritech and
Accel were joined in the funding round by Ribbit Capital and QED Investors
§  Launch CAN Connect “a full suite of Application Program Interfaces (APIs) that
enables third-party providers, such as payment processors and providers of point of
sale (POS) systems and cloud accounting software, to offer their small business
customers access to working capital based on available merchant data”
§  Closed its first securitization totaling $200 million and rated investment grade by
S&P and DBRS
§  Partnered with Yodlee allowing funding via CAN Capital through Yodlee Small
Business Solution
2015
§  Partnered with Worldpay allowing Worldpay merchants to take advantage of CAN
Capital’s finance programs. Also partnered with iPayment providing 150,000 small
businesses working with iPayment the ability to obtain flexible financial solutions
§  Secures $650 million senior credit facility led by Wells Fargo
§  Provided access to more than $5 billion in capital to small businesses
2015
§  Surpassed $6 billion in capital provided to small businesses since inception
§  Launched the Innovative Lending Platform Association with Kabbage and OnDeck
60
TIMELINE
2010
HEADQUARTERS: Troy, MI
CO-FOUNDERS: Ryan Rosett, Edan King, and Erik Stamell
CURRENT CEO: Glenn Goldman
LOAN ORIGINATION: WebBank (business loans, majority of its business)
LOANS: can range anywhere from $5,000-$250,000. APR from 9.99%
Two products:
§  Working Capital product provides borrowers with up to $250,000 in
financing. Terms: 6-17 months. Fee (one-time): 2.5% of total loan. Daily
payments. Qualifications: at least 6 months in business with gross revenue
of $10,000 per month.
§  Business Expansion product provides borrowers with up to $250,000 in
financing. Terms: 18-24 months. Fee (one-time): 2.5% of total loan. Rate
(equivalent to APR): 9.99% - 36%. Weekly payments.
“The Small Business Loan is made by WebBank, a Utah-based industrial bank
who has partnered with Credibly, while the joint AloStar Bank of Commerce,
WebBank and CapitalSource credit facility provides significantly increased
capacity for Credibly to lend to businesses throughout the United States. This onbalance sheet capacity complements Credibly's marketplace whole loan sale
program.” (BusinessWire – June 2015)
Operates the Credibly Small Business Index – calculates the friendliness of select
US cities to small businesses and contains information on many different types of
small businesses across multiple industries.
§  RetailCapital founded (originally as a joint venture with Michigan-based Crestmark
Bank)
2013
§  Released its scoring model which looks at a businesses overall health not just
traditional metrics like a credit score
2014
§  Former head of CAN Capital Glenn Goldman announced as new CEO
§  Secured new round of investment from Flexpoint Ford, LLC
§  Acquired 100% ownership of its joint venture structure from Crestmark Bank
2015
§  RetailCapital rebrands as Credibly
§  Announces partnership with WebBank for its lending program
§  Closed a $40 million credit facility backed by AloStar and CapitalSource to facilitate
the launch of the Credibly Small Business Loan which provides capital for small
businesses while allowing them the flexibility to determine repayment (daily, weekly,
monthly)
§  Launched a new educational platform, In.Credibly.com, to help businesses evaluate
working capital needs with guidance and productivity tips
§  Launched version 2.0 of its scoring model
§  As of June, Credibly provided $275 million in funding to thousands of small
businesses nationwide
2016
§  Announced the closing of a $70 million credit facility with SunTrust Bank and AloStar
Bank of Commerce
TIMELINE
2014
§  Secures $2 million seed investment led by GLI Finance Limited
§  Executive team and advisory board assembled
§  Launches
2015
HEADQUARTERS: New York, NY
FOUNDER: Michael Finkelstein (CEO)
LOAN ORIGINATION: Balance sheet lender. Asset-based loans
LOANS: $500,000 to $5 million. Rates: 14% - 19%. Terms: 6-36 months.
“A data-driven lending platform focused on providing working capital and supply
chain financing solutions to small and mid-size enterprises.”
No hidden fees, the firm does not control cash, 100% inventory only loans
available, not FICO based.
§  Secures $50 million credit facility from Victory Capital, its first institutional credit
facility. Platform launches Q2 2015
§  In September, Forbes publishes “How Big Data Flows Will Change Business
Lending” and highlights The Credit Junction tech platform
2016
§  In March, Inc. profiles The Credit Junction and how it turned around small womenowned business, “How Walsh Electrical Rebounded From the Brink of Bankruptcy”
§  Partnered with the Small Business & Entrepreneurship Council to offer its 100,000+
members fast, flexible, and efficient access to capital as well as educational
workshops
§  Forbes piece on TCJ, “How the Credit Junction Uses Data-Driven Intimacy to
Change Commercial Lending,” notes that the platform has issued more than $40
million in lines of credit since the platform came online in Q2 of 2015
62
TIMELINE
2011
§  Founder
2013
§  Launched its lending platform
HEADQUARTERS: New York, NY
CO-FOUNDERS: Sam Graziano (CEO), Doug Gordon (EVP, Head of Partnership
Development)
LOAN ORIGINATION: Balance sheet lender. “As a direct lender, Fundation
commits our own capital to finance your customers’ small business loans; we hold
them on our balance sheet, and manage the loan servicing.”
LOANS: $20,000 - $500,000. APR: 7.99% - 29.99% (inclusive of origination and
closing fees). Terms: 1-4 years. Can lend up to $1 million, but this requires
additional due diligence. Payments twice a month. Late fee: “greater of 5% of
unpaid portion of scheduled payment of $35.00.”
§ Short term loans: Up to $150,000. Terms: 1-2 years.
§ Long-term loans: Up to $500,000. Terms: 1-4 years.
REQUIREMENTS: Have to have at least 3 employees (including yourself); 2+
years in business, $100,000+ of annual revenue, good personal credit. Loans are
not offered in the following states: ND, SD, NV, VT.
2014
§  CEO sat on the panel “Accessing Alternative Capital Panel” at the US Chamber of
Commerce Small Business Summit
§  Partners with Kukui Corporation, a developer of marketing software solutions for the
automotive repair industry
§  Joint venture agreement (undisclosed $) between Garrison Investment Group, Solel
Investment Group, The Leo Group with Fundation providing capital to deploy
additional lending to small businesses
2015
§  Partnership with Regions Financial Corp. Expands offering across 16 states in the
South, Midwest and Texas
2016
§  Appoints Barry Feierstein as COO
§  Partnership with BancAlliance, a network of more than 200 community banks across
40 states, to expand access to loans for small businesses
§  Launched the Coalition for Responsible Small Business Finance along with Breakout
Capital, the Business Backer, Paynet, and Orion First
63
2010
TIMELINE
§  Kabbage selects GDS Link solution DataView360 to provide nontraditional data
aggregation and enhanced underwriting capability
§  Officially launches to provide working capital to small businesses
2011
§  Begins funding e-commerce businesses in May
2012
HEADQUARTERS: Atlanta, GA
FOUNDER: Rob Frohwein (CEO)
LOAN ORIGINATION: All Kabbage business and personal loans are issued by
Celtic Bank.
Ongoing line of credit up to $100,000. Terms: 6 or 12 months. No interest. Fee:
1.5% - 12% of selected loan amount. Pay back 1/6 (6mth loan), 1/12 (12mth loan)
of the total loan + monthly fee. Third party partners may charge additional 1.5%
each month. Minimum loan of $5,000 for a 12 month term. Requirements: One
year in business, $50,000+ in annual revenue.
Offers the only fully automated, online lending platform designed to support
continuous customer data monitoring.
Focused originally on funding small e-commerce companies, before expanding in
2013.
FundingRound
Announced
Amount/Involvement
SeriesA
January
2011
$6.65million/BlueRunVentures,DavidBonderman,founderofTPGCapital,
WarrenStephens,CEOofStephensInc.andtheUPSStrategicEnterprise
Fund.
SeriesB
August2011
$17million/MohrDavidowVentures,BlueRunVentures,DavidBonderman,
WarrenStephens,UPSStrategicEnterpriseFund,JimMcKelvey,co-founder
ofSquare,andothers.
SeriesC
September
2012
$30million/ThomvestVentures,UPSStrategicEnterpriseFund,Mohr
DavidowVentures,BlueRunVentures,WarrenStephens,andDavid
Bonderman.
SeriesD
May2014
$50million/SojBankCapital,TCW/CratonandLumiaCapital,David
Bonderman,WarrenStephens,UPSStrategicEnterpriseFund,Peter
Thomson’sThomvest,BlueRunVentures,MohrDavidowVentures,among
others.
SeriesE
October
2015
$135million/ReverenceCapitalPartners,ING,SantanderInnoVentures,
Sco?abank,China'sYuanCapital,Japan'sRecruitStrategicPartners,BlueRun
Ventures,UPSStrategicEnterpriseFund,ThomvestVentures.
§  Partners with UPS as well as new credit facility. Partnership allows small businesses to
direct UPS to share shipping information with Kabbage, to further bolster underwriting
metrics and reduce costs of lending
§  UPS launches its Small Business Solutions portal providing financial services to small
businesses powered by Kabbage
2013
§  Secures $75 million credit facility from Victory Park Capital with participation from
Thomvest Ventures
§  Kabbage expands small business financing to include offline businesses. Prior to the
expansion, the company had provided $85 million in short-term financing to e-commerce
companies from 70,000+ advances since inception
§  Partners with Intuit to use its Quickbooks data to fund businesses
§  Partners with Stripe, becoming the first company to underwrite Stripe’s business
customers based on Stripe's payment processing data
2014
§  Secures $270 million credit facility from Guggenheim Securities
§  Attained BBB rating on $136 million of class A notes that are part of the $270 million
securitized credit facility. Rating provided by Kroll Bond Rating Agency
§  Launches Karrot Personal Loans - the first fully automated personal loan marketplace in
the industry
§  Launched mobile platform – “the only app in the industry that allows businesses to access
funds on-the-go from their mobile device”
2015
§  Announces expansion of its credit facility to more than $900 million
§  Launched Kabbage Card, giving businesses the ability to pay with items at the point of
sale. "This is the first time that an online lender has extended its product to the physical
point of sale...." Can be used at physical or online businesses that accept MasterCard
§  Kabbage began licensing its lending platform – the Kabbage Platform -- allowing other
organizations to reach more customers while providing “an outstanding end-to-end
customer experience.” Kikka Capital (Australia), ING (Spain), Santander (UK), FleetCor,
and Sage have since launched online small business lending through the Kabbage
Platform, allowing Kabbage to extend its service worldwide
§  Partners with Experian, Orchard Platform, and MasterCard
§  As of October, the platform was funding more than $5 million per day to small businesses
2016
§  Announces that its business customers have securely connected 1M+ data accounts to its
lending platform. Originates $2 billion in SMB loans through the Kabbage Platform since its
launch
§  Partnered with the National Federation of Independent Businesses opening up the
Kabbage platform NFIB’s 325,000+ members
§  Launched the Innovative Lending Platform Association with CAN Capital and OnDeck
§  At present, Kabbage has 300+ employees and is used by more than 70,000 businesses
TIMELINE
2010
§  Founded
§  Launched RevenueLoan product
2011
HEADQUARTERS: Seattle, WA
FOUNDER: Andy Sack.
CURRENT CEO: BJ Lackland
LOAN ORIGINATION: balance sheet
FOCUS: Technology firms: Software, SaaS, services, digital media, other online/
digital businesses.
FINANCING: From $50,000 - $2 million. Qualify for a loan up to 33% of your
annualized revenue run-rate.
REQUIREMENTS: At least $15,000 in monthly revenue in each of the last three
months. Gross margins of at least 50%. Product is best suited for companies
making $200,000 in annual revenue. Profitability: Not required.
Repayment based on percentage of monthly revenue (between 1-10%), with a
target of a 3-5 year payback term. Debited monthly via ACH (generally). No
personal guarantees as loan is secured against a company’s assets. Instead of a
fixed loan payment, it’s a variable monthly payment .
Revenue-based financing - a blend between bank debt and venture capital.
“Market leader in revenue based financings”
“The structure of RBF is often non-dilutive to founders and does not require a
board seat.”
Has made 130 financings with more than 90 companies since inception.
Funding
Round
Announced
Amount/Involvement
SeriesA
June2010
$6million/Founders'Co-op,VoyagerCapital
SeriesB
November2015
$9million/VoyagerCapital,SummitCapital,andindividual
investors,includinganinvestmentfromLighterCapital’s
Chairman,JeffSeely.
§  Rebranded as Lighter Capital from Revenue Loan
2012
§  New CEO announced
2014
§  Completed its 50th RevenueLoan
2015
§  Raised $100 million from Community Investment Management, which will be used to
fund roughly 500 investments in tech firms. Expands financing threshold from $1
million to $2 million
65
TIMELINE
2014
§  Formation of Buttonwood Capital Management, a specialty finance holding company
HEADQUARTERS: Los Angeles, CA
CO-FOUNDERS: Rob Snow (CEO), Steve Dervenis (Executive Chairman)
Specialty finance company focused on equipment financing, in particular
LOAN ORIGINATION: all of the loans originated and distributed through the
Mainspring platform are originated, underwritten and serviced by the platform’s
portfolio lending companies (Blue Ridge Financial).
“Mainspring Funding is a platform allowing qualified investors to have access to our
affiliates loan originations and links potential borrowers to our partner companies
lending products.”
EQUIPMENT FINANCE: Secured loans with fixed interest rates with terms between
12-60 months. Site inspections for loans of $25,000 or more. Loans over $100,000
require two years full financial statements while loans over $250,000 require 3 years
full financial statements.
INVENTORY FINANCE: Terms between 12 to 36 months, with up to 100% financing
for inventory invoices. Requirements include: 2 years time in business, 635+ FICO
Score for all loans. For loans over $25,000 – site inspection and 3 months of bank
statements. Loans over $100,000 require two years full financial statements.
WORKING CAPITAL: Loan size: $50,000 - $100,000 (dependent on borrower's time
in business). Fixed rate loans with terms between 12-36 months. Site inspections
performed. Loans can be added to equipment finance loans "for soft costs as well.“
Requirements include: 2 years time in business, 635+ FICO Score, 3 months banks
statements and site inspection.
Mainspring is a wholly-owned subsidiary of Buttonwood Capital Management – a
private equity firm focused on specialty finance companies and technology platforms
focused on loan origination and distribution. “In addition to Mainspring Funding,
Buttonwood owns majority or minority interests in Carillon Capital, LLC and the small
business lender, Blue Bridge Financial.”
Platform allowing qualified investors to have access to its affiliates (Blue Bridge
Financial) loan originations and links potential borrowers to its partner companies
lending products.
Over $100 million in loans have been originated nationwide to-date through the
platforms affiliates.
“Applications are accepted from businesses operating in the 48 states of the
Continental U.S.”
2015
§  Partnered with Orchard allowing the company to use Orchard’s platform and
technology to reach greater numbers of institutional investors. Orchard has been
“tremendously helpful in opening doors, and helping investors out there understand
what we do. The process of bringing new investors on board is still a time consuming
process.” - Rob Snow
2016
§  Launches enhanced platform providing borrowers and qualified investors with "direct
access to loan products directly from affiliated partners“
66
2007
TIMELINE
§  Founded
2008
HEADQUARTERS: New York, NY
FOUNDER: Founder: Mitch Jacobs
CURRENT CEO: Noah Breslow
LOAN ORIGINATION: Majority of loans funded on OnDeck’s balance sheet.
Hybrid model: while loans are mostly held on balance sheet, they’re also sold to
institutional investors through the OnDeck private marketplace.
SHORT TERM LOANS: Up to $250,000. Terms: 3-12 months. Rates: As low as
9% Total Interest Percentage. Average: 19% Total Interest Percentage.
LONG TERM LOANS: Up to $500,000. Terms: 15-36 months. Rates: as low as
5.99% Annual interest rate. Average: 30%
LINES OF CREDIT: Up to $100,000. APR: 13.99% - 39.9%. Maintenance fee of
$20 a month (waived for the first 6 months if a borrower draws $5,000 in the first 5
days)
ORIGINATION FEE TERM LOANS: 2.5% - 4% of loan amount (first loan); 1.25%
- 3% of loan amount (second loan); 0% - 3% of loan amount (third loan).
QUALIFY FOR TERM LOAN: In business at least 1 year, $100,000+ gross annual
revenue, at least one owner with 500+ personal credit score. For line of credit: in
business at least 9 months, $75,000 gross annual revenue, a majority owner with
at least 600+ score.
Funding
Round
Announced
Amount/Involvement
SeriesA
2006
$2million/FirstRoundCapital,VillageVenturesandContourVenturePartners
SeriesB
Dec.2007
$15million/RREVenturesledtheround
SeriesC
Dec.2010/
April2011
$20million/SAPVenturesandSFCapitalGroupledtheround
SeriesD
Feb./Apr.
2013
$60million/Ins?tu?onalVenturePartnersledtheroundandGoogleVenturesandPeter
Thielpar?cipated
SeriesE
March2014
$77million/TigerGlobalManagementledtheroundandIns?tu?onalVenturePartners,
GoogleVentures,PeterThielandSAPVenturespar?cipated
§  OnDeck launched across 45 states
2011
§  Launched The OnDeck Score®, a proprietary small business credit scoring system, to
provide alternative scoring method to gauge the overall health and creditworthiness of
small businesses
2012
§  Reported that UK firm sought to purchase OnDeck for $250 million, but negotiations
faltered over price
§  Secured nearly $100 million in new debt commitments ($80 million credit facility by
Goldman Sachs, $17 million venture debt loans from SF Capital, Lighthouse Capital
Partners)
2014
§  Initial Public Offering. Raised $200 million at a $1.3 billion valuation. At the time, the
largest venture-backed tech exit since Tumblr and the largest ever for NY
§  Partnership with BBVA Compass, marketing OnDeck loans to its small business
customers
§  Surpassed $1 billion in total capital delivered to small businesses resulting in $3.4B in
economic activity and 22,000 jobs created; top 5 industries served include: restaurants,
auto shops, personal care, building equipment contractors, building services
§  Achieves first investment grade, non-SBA, online lending industry’s securitization of small
business loans totaling $175 million and rated by DBRS
2015
§  Opened small business loan marketplace to institutional investors called OnDeck
Marketplace®. Jefferies now able to purchase up to $500 million in small business loans
through the new OnDeck Marketplace® institutional investor platform
§  Expands further outside the US with launch in Australia and formal launch in Canada;
announces partnership with Commonwealth Bank of Australia
§  Releases updated report detailing its first $3 billion in loans, which generated $11 billion
economic impact and led to the creation of 74,000 jobs nationwide
§  Expands licensing partnership with the AEO and participating non-profit community
lenders in order to improve access to capital for small businesses in underserved
communities
§  Partnerships with Prosper and Angie’s List in order to provide small business funding
§  Expands partnership with Intuit. Intuit’s new QuickBooks Financing Line of Credit product
is powered by the firm’s customer data and OnDeck’s technology. Since 2013, OnDeck
has been the top financing provider on the Quickbook’s financing platform
§  Partners with JPMorgan Chase. Program to allow Chase to offer loans to its 4 million
small business accounts using OnDeck’s technology platform and Score framework.
Product will carry Chase’s branding and funds will come from JPM’s balance sheet
2016
§  Launches Transatlantic Policy Working Group with Innovate Finance and the Innovative
Lending Platform Association with Kabbage and CAN Capital
§  Surpasses $4 billion in total capital delivered to small businesses – more than 50,000
firms across 700 industries
TIMELINE
2005
§  Founded
2008
§  Enters Canadian marketplace
HEADQUARTERS: Bethesda, MD
CURRENT CEO: Will Tumulty
The company is controlled by Rockbridge Growth Equity
LOAN ORIGINATION: Firm conducts its own underwriting and supplies direct
funding through its own bank financing.
Loans up to $500,000
SMALL BUSINESS LOANS: Approval in less than 24 hours.
MERCHANT CASH ADVANCE: Starter and Premium MCA programs.
Businesses can qualify for 85% - 250% of monthly credit card sales. Repayment
based on daily credit card revenue. All credit scores are considered. 90% of
clients participate in this more than once.
PREFERRED RATE LOAN: $25,000 - $100,000. Monthly fee of 1.25% of the
original funding amount. Terms: 9-18 months. Requires FICO of 660+, in business
for 4+ years, other criteria.
For MCAs, RapidAdvance takes a fixed percentage of credit card sales. Approval
time from submission: 48 hours. Entire funding process within 7 days.
Requirements: Physical location, been in business for at least three months,
process $2,500 in receivables a month, one-year left on lease (Biz News Daily October 2015).
Executive Chairman Jeremy Brown sits on the Board of Directors of the Small
Business Finance Association
The firm has provided over $1 billion in financing to more than 30,000 small
business nationwide.
2011
§  Announces expansion of small business lending products
2012
§  Closes new financing facility from Wells Fargo supporting merchant cash advance,
small business lending operations
2013
§  Acquires health care financing providers Professional Merchant Advance Capital,
LLC; Professional Merchant Advance Capital
§  As of July, the company has extended $500 million to tens of thousands of business
owners since 2005
§  Rockbridge Growth Equity, LLC, an affiliate of Quicken Loans, acquires Rapid
Financial Services, LLC (doing business as RapidAdvance)
2015
§  The National Small Business Association (NSBA) launched a new partnership with
RapidAdvance to provide its members with access to capital
§  Will Tumulty named new CEO. Former CEO Jeremy Brown promoted to Executive
Chairman
§  Has filed multiple lawsuits alleging follow-on loans by competitors to a current Rapid
Advance customer who then defaults with RapidAdvance is a form of tortious
interference
68
The darker shaded areas represent higher lending totals
TIMELINE
2012
§  Launched
2015
HEADQUARTERS: Charleston, SC
“Hybrid finance” – focus less on credit score and more on overall health of the
small, mid-sized business.
CO-FOUNDERS: Hunter Stunzi (President), Chris Mettler (SVP of Operations)
LOAN ORIGINATION: Balance sheet lender. Snapcap funds 92% of the loans
approved. “We do not broker out, compare or auction your application off to the
highest bidder.”
LOANS: $5,000 - $250,000. Terms from 1-18 months. Available to those with
credit scores 500+ (based on small business loan calculator).
Vanishing Interest Rate™ program to customers who payback their loans on time.
Express Review - proprietary technology that scores a small business based on a
few pieces of information: annual revenue, contact info, time in business, location.
Do not rely on credit scores.
Funded $115 million in loans in the past year. Since inception – the company has
provided funding to companies in 375+ industries across the 50 states.
§  Released an infographic on the type of business owners turning to online small
business loans based on 14,000 online applications. Online retailers were the thirdhighest business category applying for loans, while home-based businesses
represented 45% of SnapCap’s loan applications
§  Debuts “Express Review” option to its application process to provide qualified small
businesses with instant funding decisions
69
TIMELINE
2013
§  SmartBix soft launches in October
HEADQUARTERS: San Francisco, CA
CO-FOUNDERS: Ryan Gilbert (Executive Chairman, Co-Founder), Sean O’
Malley (Co-Founder) and Evan Singer (President at SmartBiz)
SmartBiz is the #1 online marketplace for SBA loans. The company’s
sophisticated software streamlines the SBA loan application and origination
process. Small businesses can now apply online and get funds in as fast as 7
days while banks can make SBA loans more efficiently than ever before
LOAN ORIGINATION: From preferred SBA lenders (3 lenders as of 2015)
LOANS: $30,000 - $350,000. Variable interest rates: 6.25% (Prime Rate plus
2.75%) for loans $50,000 - $350,000; 7.25% (Prime Rate plus 3.75%) for loans
$30,000 - $49,000. Term: 10 years. Fees: 2% referral fee of the loan amount and
2% packaging fee of the loan amount. Loans above $151,000 - SBA guarantee
fee of 2.25%. Bank closing costs could add $300+, including standard bank fees.
USE OF LOAN PROCEEDS:
§  $30,000 to $350,000 (working capital, new equipment purchases, business
debt refinancing, and real estate purchases).
TYPICAL BORROWER: 2+ years in business, $50,000 to $5 million in annual
revenue. 1-40 employees
AVERAGE FICO SCORE AMONG BORROWERS: 705. Average revenue: $1
million. (NerdWallet - February 2016)
More than $140 million in SBA loan applications funded since launch.
2014
§  Billfloat changed name to Better Finance – hard launched SmartBiz with focus on
helping business owners apply for SBA 7(a) loans from $30,000 up to $350,000.
§  Smartbiz announced 4 new distribution partners: California Business Bank in Los
Angeles, Yahoo!, Xero and ePay.
2015
§  Better Finance honored as fastest growing private company in San Francisco and
the Bay Area. Growth of 3000% over the past three years
70
A Marketplace for Small Business Finance
TIMELINE
2007
§  Founded. Backed by Nexus Venture Partners
HEADQUARTERS: New York, NY
CO-FOUNDERS: Rohit Arora (CEO), Ramit Arora (President)
Matches small business borrowers with lenders. Service provider who vets the
viability of potential borrowers and then connecting them with lenders.
Arrange funding between $5,000 - $5,000,000 (depending on the type of loan)
UNDERWRITING/CLOSING FEES: For most non-bank financing products there
is an underwriting fee (typically $250 - $400 depending on deal size), which is
payable when the transaction closes. For bank financing products, a closing fee is
assessed when the transaction is closed. Both fees dependent on the size and
type of transaction and other factors.
Operates Biz2Credit Small Business Lending Index which tracks lending from
small/big banks, institutional lenders, alternative platforms. Followed closely by
the SBA, and the other lenders, government agencies and the President's Council
of Economic Advisers. Index analyzes roughly 1,000 loan applications on its
platform.
Biz2Credit sees almost half of all loan applications are made via mobile units
Arranged more than $1.4 billion in small business loans for 100,000+ companies.
Biz2Credit network consists of 1.6 million users and 1,300 pre-screened lenders.
2008
§  Launched online portal
2011
§  Launched Biz2Credit Small Business Lending Index
2013
§  Announced the platform has arranged more than $1 billion in financing
§  Platform has more than 1,200 big banks, small banks, credit unions, microlenders,
and alternative lenders, with 1.6 million users
2014
§  Received $250 million commitment from Direct Lending Investments
§  Partnered with Paychex to create the Small Business Loan Resource Center,
providing an online resource for small business owners to access more than 1,000
lenders
2015
§  Adds SME Financial Score Simulator Tool to BizAnalyzer – allowing small business
owners to capture a personalized snapshot of their business health
§  Default rates of borrowers on the platform less than 1%
§  Average business using Biz2Credit platform is 7 years old, and generate $2 million in
revenue
2016
§  Partners with Advantage Funding providing access for small businesses through
equipment-backed loans
§  Partners with Tata Capital Partner to expand access to financing for small
businesses in India. Tata Capital is the "flagship financial services company" of the
$100+ billion Tata Group
§  Small Business Lending Index April 2016: Small and large Banks ($10 billion+ in
assets) approved more than 48% and 23% of loan applications, respectively.
Alternative lenders approved 60% of loans
§  Releases "Best Small Business Cities in America" study, which found San Jose, CA
to be the best small business city in America
72
TIMELINE
2005
§  Founded
2006
HEADQUARTERS: New York, NY
FOUNDER: Stephen Sheinbaum (CEO)
Formerly Merchant Cash and Capital – was predominately focused on merchant
cash advances until the launch of Bizfi marketplace and subsequent rebranding to
Bizfi.
PRODUCTS INCLUDE:
§  Short-term funding: $3,000 - $500,000. Terms: 3-24 months. Requirements
include: Limited documentation, no collateral, perfect credit not required,
most industries accepted.
§  Medium- term loan: $25,000 - $500,000. Terms: 1-5 years. Requirements
include: No prepayment penalties, no collateral, low rates and flexible
terms.
§  SBA Loan: $5,000 - $350,000. Terms: 5-10 years. Requirements include:
Minimum 2 years in business, collateral required above $25,000.
§  Invoice Financing: $5,000 - $100,000. Terms: Until invoice satisfied.
Requirements include: minimal documentation.
Bizfi: “is the premier FinTech company combining aggregation, funding and a
participation marketplace on a single platform for small businesses.”
Bizfi marketplace includes 15 “fully integrated partners” and 30 “non-integrated
partners.” (BusinessWire – March 2016)
Bizfi, along with its family of companies, has provided in excess of $1.6 billion in
financing to more than 29,000 small businesses across the United States since
2005.
§  Merchant Cash and Capital launches as merchant advance company purchasing
future credit and debit card receipts
2008
§  Patriot Group, LLC provides $17 million credit facility
§  Announces the company has originated more than $100 million
2011
§  Announces completion of a new $25 million senior debt facility provided by Comvest
Capital and Community National Bank
2012
§  Establishes disaster relief program for small businesses in the wake of large,
devastating storms
2013
§  Releases study that finds that small businesses lack storm preparedness plans oneyear after Superstorm Sandy
§  Released another study that finds small businesses continue to struggle to find
financing in the years since the Great Recession
§  Releases another study on small business perceptions and concerns with
Obamacare. Announced the launch of ASAP (Automated Submission and PreApproval System) – providing instant pre-approvals and contracts through faster
speed and accuracy
2014
§  Secures term loan to $75 million through a consortium led by Comvest Partners.
MCC’s total debt facilities now roughly $100 million
2015
§  Announced the company has originated more than $1 billion with over 20,000
companies served nationwide. Average funded amount of roughly $40,000
§  Launches Bizfi – an online marketplace that allows small businesses to compare
funding options from more than 35 partners for different sources of capital
§  Rebrands as Bizfi from Merchant Cash and Capital
§  Launched an API and a white label solution “which will enable partner companies to
offer direct lending solutions to their small business customers”
§  Secures $65 million in debt financing from Metropolitan Equity Partners
§  Originates $142 million in financing in Q4 2015
2016
§  Over $1.4 billion provided to 27,000+ businesses
§  Western Independent Bankers partners with Bizfi providing WIB clients with access
to the Bizfi platform
§  First quarter 2016: Originated more than $140 million in financing to 3,605 small
businesses - a 49% YoY increase in originations
TIMELINE
2014
§  Launched
2015
HEADQUARTERS: New York, NY
CO-FOUNDERS: Jared Hecht (CEO), Rohan Deshpande, Andres Moran
Hecht was co-founder of GroupMe
Online marketplace connecting small business borrowers with best available
financing from partnered lenders.
Over 30,000 businesses have applied for financing using Fundera. Facilitated
around 2,200 loans since inception.
Fundera is paid by its partnered lenders if customer successfully applies for a
loan through its platform. Takes 1% to 4% origination fee from the lending firm.
These are some of the lowest fees to borrowers in the industry.
PARTNERS INCLUDE: 20+ of the most reputable online lenders, including:
BlueVine, The Credit Junction, CAN Capital, Funding Circle, Kabbage, OnDeck,
FundBox, Dealstruck, and Lending Club. In 2016, they also launched American
Express and Chase credit cards. They will also be bringing on traditional financing
institutions.
More than 2,500+ small businesses funded.
Funding
Round
Announced
Amount/Involvement
SeriesA
January2014
$3.4million/Publicpolicyques?ons:SVAngel,Khosla
Ventures,LererVentures,andFirstRoundCapital.Angel
investorsRobWiesenthal,StraussZelnick,DavidTisch,
andDavidRosenblad
SeriesB
September2015
$11.5million/SusquehannaGrowthEquity,QED
Investors,KhoslaVentures,FirstRoundCapital,andother
ini?alinvestors.
§  Co-author and original signer of the Small Business Borrowers’ Bill of Rights
unveiled in Washington, DC
§  Began releasing quarterly report on the state of online small business lending
2016
§  Released its two-year anniversary report in February detailing the company's growth
§  The platform facilitated 2,200+ loans totaling $115 million to small businesses in its
first two years
§  Announced a partnership with PaySimple. PaySimple customers can use its
Fundera-powered loan center to access funding from dozens of small business
lenders
74
TIMELINE
1983
§  Founded
1993
HEADQUARTERS: Mountain View, CA
CO-FOUNDERS: Scott Cook and Tom Proulx.
CURRENT CEO: Brad Smith
Sasan Goodarzi, SVP and general manager of Intuit's Small Business Group.
“QuickBooks Financing is a matchmaker that matches small businesses with
financing solutions based on their specific needs and preferences. With the
business owner’s consent, lenders on the QuickBooks Financing platform can see
the complete picture of the small business through the company’s books.”
QUICKBOOKS FINANCING PRODUCTS INCLUDE:
§  Invoice financing: $500 - $25,000. Term: 3 months. Fees: 5-7%. Works
through Fundbox .
§  Line of credit: $5,000 - $250,000. Term: 6+ months. Interest rate: 5-25%.
Borrow up to a certain pre-approved limit. Can be either secured
(collateral) or unsecured.
§  Short-term loans: $2,500 - $500,000. Interest rates start at 14%. Terms:
3-24 months. "Although rates might start as low as 14%, the average rate
tends to be higher and varies depending on your business revenues,
business history and credit rating.“
§  Term loan: $25,000 - $1 million. Interest rate: 5% - 30%. Term: 1-5 years.
Likely costs could include: origination fee, loan packaging fee, service fees
& closing costs.
QuickBooks Financing currently has about 12 partners – ranging from short-term
lenders to traditional financial institutions.
Over $400 million in financing to 25,000+ businesses since inception
§  IPO
2013
§  Begins to experiment with small business financing – originally branded Intuit Loan
Finder
§  Intuit introduces QuickBooks Financing and begins onboarding lenders onto platform
2014
§  Intuit CEO Brad Smith meets with U.S. President Barack Obama, signs the White
House Small Business Supplier Financing Pledge. As of July 2014, 10% of Intuit's
suppliers are small businesses
2015
§  Intuit teams up with OnDeck, to launch the QuickBooks Line of Credit with lower
rates (8.9% - 19.9%), and loans funded in 24 hours. Launch includes $100 million
small business lending fund to back the new product
§  Fundbox partners with Intuit to launch QuickBooks Invoice Financing, eliminating the
need for credit checks and additional paperwork through the use of QuickBooks data
and Fundbox technology
§  Partners with Kiva to provide financing to underserved small businesses through the
QuickBooks Financing platform
75
TIMELINE
2011
HEADQUARTERS: South Jordan, UT
CO-FOUNDERS: Brock Blake (CEO) and Trent Miskin (CTO)
Marketplace matching borrowers looking for business financing options with
active banks, credit unions, and alternative lending sources.
The nation’s leading small business loan marketplace makes small business
lending simple by aggregating over 75 business lenders onto on easy-to-use
platform, accelerating the lending process, and providing the small business
owner with transparent and trusted experience.
Partnerships with Staples, GoDaddy, American Express, Lendvantage, SBE
Council, Lending Club, Rapid Advance, Lending Tree, UPS Store, LegalZoom,
and many others.
Requirements to getting a loan typically include 6 months of current business
account bank statements, mortgage or landlord verifications, as well as other
requirements based on loan type, amount and duration. Basic guidelines to
receive options include at least a credit score over 550, no bankruptcy in the past
3 years, gross revenue averaging $10,000 a month for at least 6 months, current
on mortgage or rent payment, and other qualifications depending on the loan
product.
Funding
Round
Announced
Amount/Involvement
SeriesA
February2011
$6million/Highway12Ventures,GSAVenturePartners
SeriesB
August2013
$4.5million/RunaCapital,Highway12Ventures,Tribeca
VenturePartners
SeriesC
March2015
$20.5million/NapierParkGlobalCapital,Blumberg
Capital,Highway12Ventures,NorthHillVentures,Pivot
InvestmentPartners,RunaCapital,TribecaVenture
Partners
Launched
Secures $2 million in debt financing from Square 1 Bank
Demonstrated its loan matching technology at FinovateSpring
Announces that its matchmaking technology will now be free for business owners,
compared to $99 a month originally
§  Joins Startup America Partnership
§ 
§ 
§ 
§ 
2014
§  Lendio officially launched its small business loan marketplace division in April
§  Lendio funds $12.4 million in loan volume
2015
§  Acquires Business Bounce assets bringing Lendio to the East Coast in NYC
§  Staples launched lending service "Staples Business Loans" powered by Lendio,
offering more than 20 different funding options. A few months later, Staples Business
Loans surpass a million dollars of funding for small businesses
§  Lendio’s platform funded $10.6 million in small business loans in the month of April
§  Launched “Lender Ratings and Reviews” and Small Business Loan Calculators on
its platform
§  Funded $128 million in total financing with over 5,100 SMBs in 2015
2016
§  Partners with the Small Business & Entrepreneurship Council, "a leading advocacy
and education organization dedicated to promoting entrepreneurship and strong
small business growth," to support the funding needs of more than 100,000 small
businesses
§  Released survey covering borrower understanding of the costs associated with a
loan. Easiest to understand: "total payback amount". More difficult: APR and factor
rate
§  First Quarter 2016 results: Facilitated $52.5 million in financing through its
marketplace now composed of 70+ small business lenders - a 200% increase from
first-quarter 2015. 1,000+ new businesses funded. Average loan amount: $30,000.
Average days to fund: 4. "Of the $52.5 million funded, a record $6.2 million came
through Lendio’s partnership with Staples”
§  AmEx announces the company will launch small business loans on the Lendio
platform
76
Purchase Financing
TIMELINE
2013
§  Founded and launched
HEADQUARTERS: New York, NY
FOUNDER: Jeffrey Rogers (President & CEO)
LOAN ORIGINATION: Purchase financing
SMALL BUSINESS LOANS: $10,000 - $1 million, between 3-36 months. Interest
rates starting at 8%. Interest rates: 0.67% - 3% per month.
OPERATES: U.S., UK and Canada
Operates a marketplace loan platform that provides loans to small businesses
and high yield debt products to institutional investors. At present, LiftForward only
works with institutional investors.
Partnerships with suppliers, retailers and manufacturers providing loans and
purchase financing to their small business customers.
Beyond small business loans, offers co-branded products and white-labeled
lending platform.
LiftForward is a licensed lender
Over $260 million in raised to fund loans and create jobs.
FundingRound
Announced
Amount/Involvement
SeriesA
August2014
$2.3million/GLIFinance
Creditfacility
July2015
$250million/VaraderoCapital
SeriesB
February2016
$4million/IACapitalGroup,SyncoraHoldings.
2014
§  $2 million debt financing
§  Member of British American Business based in NYC
2015
§  $7 million debt financing
§  Secured credit facilities totaling up to $250 million from Varadero Capital. Debuts
TaaSLift – Technology-As-A-Service Marketplace Loan Platform allowing businesses
to offer lending products to businesses
§  Microsoft launches its first TaaSLift program providing members with software and
support
2016
§  GLI Finance announces Andy Whelan as CEO. Whelan will also sit on the board of
LiftForward. “We have identified certain platforms that have strong management
coupled with scalable electronic platforms such as Finexkap, The Credit Junction,
LiftForward and Funding Options, which we believe have the ability to grow
significantly"
78
E-Commerce Credit
TIMELINE
2012
HEADQUARTERS: Seattle, WA
GENERAL MANAGER OF AMAZON LENDING: Nick Talwar
GENERAL MANAGER OF AMAZON MARKETPLACE: Peter Faricy
LOAN ORIGINATION: Amazon Capital Services, Inc.
LOANS: $1,000 - $600,000 for 3-6 month terms. Interest rates between 6-14%.
Amazon makes money on the interest and takes cut of all sales on its
marketplace.
Funds provided to the seller's Amazon Seller Account within five days. Monthly
payments are deducted from the account
Invitation-only program - Amazon selects sellers on its platform based on online
sales history.
§  Founded (US and Japan)
§  Reports surface from Amazon sellers that they have begun to receive notifications
about Amazon Lending
2014
§  Amazon hires former head of Visa North America Nick Talwar to expand Amazon
Lending. Talwar previously worked at peer-to-peer lending service Prosper and
Citibank’s consumer banking business in Sweden
2015
§  Announced that it intends to launch in 8 more countries by the end of the year:
Canada, China, France, Germany, India, Italy, Spain and the United Kingdom
2016
§  According to the 2015 Shareholder Letter: “We also created the Amazon Lending
program to help sellers grow. Since the program launched, we’ve provided
aggregate funding of over $1.5 billion to micro, small and medium businesses across
the U.S., U.K. and Japan through short-term loans, with a total outstanding loan
balance of about $400 million.” In addition, Amazon Founder and CEO Jeff Bezos
said the company hopes to expand Amazon Lending and is “now working on ways to
partner with banks so they can use their expertise to take and manage the bulk of
the credit risk”
80
TIMELINE
2013
§  Launched as add-on for PayPal merchants (not just eBay)
2014
HEADQUARTERS: San Jose, CA
Darrell Esch, VP and GM of Business Financing Solutions;
CURRENT CEO: Dan Schulman
LOAN ORIGINATION (U.S.): WebBank
LOANS: Offered exclusively to PayPal business customers. Loan determined by
PayPal sales. Most cases: Up to 18% of sales the business processed through
PayPal in the past year, up to $97,000. Repayments are a fixed percentage of the
company’s daily sales (30% max). Single fixed fee (based on sales history, loan
amount and daily repayment deduction percentage the business selects). No
periodic interest and no late fees. Minimum payment (loan + fixed fee) required
every 90 days (at least 10% of loan amount). No credit check, verification instead
through PayPal sales history
“Because automated repayment occurs the day AFTER your corresponding sales,
you should maintain a PayPal balance greater than the share of sales you owe as
repayment each day.”
AIM: Allow businesses to buy inventory to sell more products via PayPal
AVAILABLE IN: U.S., UK and Australia
“To apply for PayPal Working Capital, your business must have a PayPal
business or premier account for at least 3 months and process between $20,000
and $10 million within those 3 months or within any time period less than or equal
to 12 months.”
PayPal Working Capital Risk Model (“PRM”): A credit quality indicator to help
predict the merchant's ability to repay the principal balance and fixed fee related
to the working capital advance. “Primary drivers of the model include the
merchant's annual payment volume and payment processing history with PayPal,
prior repayment history with the PayPal Working Capital product, and other
measures. Merchants are assigned a PRM credit score within the range of 350 to
750. We generally consider scores above 610 to be very good and to pose less
credit risk.” According to PayPal’s 10-Q: “At March 31, 2016 and December 31,
2015, the weighted average PRM score related to our PayPal Working Capital
balances outstanding was 638 and 630, respectively.”
§  Launched in the UK and Australia
2015
§  PayPal splits from eBay
§  Increased borrowing limits from $65,000 to $85,000. Borrower can take on up to
15% of sales from 8% originally
§  PayPal Working Capital tops $1 billion in loans - $3 million in loans per day. More
than 60,000 merchants worldwide have borrowed (15% of borrowers located outside
the US)
2016
§  10-K: “The total PayPal Working Capital advances and fees receivable (“Merchant
Receivables”) outstanding as of December 31, 2015 and 2014 was $421 million and
$103 million, respectively, reflecting a year over year increase of 309%”
§  10-Q: “Total PayPal Working Capital advances and fees receivable ("Merchant
Receivables") outstanding as of March 31, 2016 and March 31, 2015 was $488
million and $145 million, respectively, reflecting a year over year increase of 237%.
The increase in merchant receivables was due to increased originations of our
PayPal Working Capital product”
TIMELINE
2009
§  Square founded
2014
HEADQUARTERS: San Francisco, CA
FOUNDER: Jack Dorsey (CEO)
HEAD OF SQUARE CAPITAL: Jacqueline Reses
LOAN ORIGINATION (US): Balance sheet as well as Celtic Bank, a UtahChartered Industrial Bank.
Reses: ““We want to show investors we’re willing to put skin in the game. But
we’re quite focused on managing risk overall as a company.” (WSJ – March 2016)
“Square will offer the loans to small businesses that use its payment devices, with
fees of around 10% to 16% of the amount borrowed. The loans will be paid back
by Square taking a cut of each transaction, typically around 10%. Unlike a cash
advance, which is open-ended, the loans must be repaid within 18 months and
can be repaid early.” (WSJ – March 2016)
On the expansion of Square Capital, “We believe that our existing cash and cash
equivalents and availability under our line of credit will be sufficient to meet our
working capital needs and planned capital expenditures for at least the next 12
months.” – 10-Q 2016
Square Capital has extended more than $100 million to over 20,000 independent
businesses since its launch last year.
§  Introduced Square Capital
§  Announces deal with Victory Park Capital (for unknown $$$) to expand Square
Capital. With additional capital the company will “extend hundreds of millions of
dollars to tens of thousands of additional sellers who need capital to grow.” At the
time of the announcement, Square had already advanced $50 million to more than
10,000 small businesses
§  Square processed more than $30 billion in payments this year
2015
§  As of March, the company has extended $100 million in capital to more than 20,000
merchants
§  As of August, Square Capital became Square’s fastest growing unit (besides
payments)
§  Hires Jacqueline Reses to run Square Capital. Former Chief Development Officer at
Yahoo and Vice President at Goldman Sachs working on M&A
§  As of August: the company was extending $1 million per day to small businesses
§  In 2015, 70,000 cash advances totaling $400 million
2016
§  Square acquires team behind predictive analytics service, Framed Data, and will
deploy them to its Square Capital team
§  In March, the company switched from providing merchant cash advances to
business loans through a partnership with Celtic Bank
§  In April, Square advanced nearly $25 million in capital
§  10-Q: “We are also focused on evolving each of our services to best serve our
sellers, as evidenced by Square Capital's recent expansion from offering merchant
cash advances (MCAs) to offering merchant loans, which offer increased flexibility
for sellers, and position the service for continued scalable growth”
§  Announced that Victory Park Capital will triple its original investment in Square
Capital, with new money from investors including Colchis Capital
82
Lending via Your Social Network, the Crowd
TIMELINE
2014
§  Founders shutdown startup Outbox that digitized U.S. postal mail. Founders
relaunch new product: Able
§  Able beta launches in Texas
HEADQUARTERS: Austin, TX
CO-FOUNDERS: Will Davis, Evan Baehr
Social small business collaborative
LOAN ORIGINATION: $25,000 to $1,000,000. Startup: $1,000 - $1,000,000 from
interest rates of 1%. Growth/Established: $25,000 - $1,000,000 from interest rates
of 8%. Terms of 1-5 years
Calls itself the lowest-cost online lender. Small business funding through the
support of a borrower's network (called Backers) and Able.
Family and friends Backers contribute 10-50% of total loan, while Able covers the
rest. Able determines the rate paid on their funded portion of the loan.
BACKERS: Need valid US bank account, among other requirements. Minimum of
three backers on up to a maximum of five backers. Backers must commit to
funding at least $1,000 of the loan. No single backer can fund more than 50% of
committed capital. Can charge the same interest rate as Able or lend at rates half
that of Able. Backers take first loss if borrower defaults
ABLE’S NETWORK: 100+ entrepreneurs. Borrowers and Backers become part
of the Able Network. Consultative services, feedback provided.
Funding
Round
Announced
Amount/Involvement
SeriesA
August2015
$6million/BlumbergCapital,RPM
Ventures,PetersonPartners,Expansion
VenturesAngelListSyndicate
2015
§  Launched nationwide. As of August: Available in 40 states and Washington, D.C.
§  Launched Ask Able – conduct pro-bono one-on-one consultations with small
businesses
§  Launched Able Start (beta) allowing “credible entrepreneurs with viable business
plans to use the Able platform to raise 100% of their funds through custom loan
agreements with their friends, family and fans. Founders keep all of their equity and
set their own terms and interest rates”
2016
§  Launches True Rate Calculator and Able Refi at LendIt 2016
§  The True Rate Calculator allows small business owners to uncover the
actual APR of their existing business debts
§  Able Refi allows small business owners to refinance high-interest loans
and credit cards to save $5,000 a month on average
§  Able raises their maximum loan amount to $1,000,000
84
TIMELINE
2013
HEADQUARTERS: La Jolla, CA
CO-FOUNDERS: Ethan Senturia (CEO), Russell McLoughlin (CTO)
Debt-based crowdfunding platform
LOANS: Term loans and lines of credit from $25,000 - $500,000. Interest rates
from 9.99%. Terms: 48 months. Requirements: 1+ years in business, 600+
personal credit score, $150,000 in annual revenue.
Dealmaker Application - Two years worth of tax returns, bank account information,
FICO score to understand a borrowers unique financial needs.
Refers to itself as: “First crowdlending platform to offer multiple products to SMBs,
and the first to allow investors the freedom to choose specific investments.”
Funding
Round
Announced
Amount/Involvement
SeriesA
April2015
$8.3million/TrinityVentures
§  Founded
§  Launched crowdfunding platform connecting small business owners with accredited
investors and institutional investors
2014
§  Raises $1.2 million seed round with Southern California based angels completing
the round
§  Announced asset based line of credit product
§  National Small Business Association appoints the firm as exclusive lending partner
§  Expands to 40 states from 20
§  Partnership with Direct Lending Investments allowing the firm to invest in qualified
small businesses via multiple Dealstruck products
§  Announces API product for institutional investors, enhanced portal for accredited
investors
§  Hispanic Chamber of E-Commerce Establishes Strategic Alliance with Dealstruck
§  Surpasses 100th small business loan
2015
§ 
§ 
§ 
§ 
Launches inventory line of credit
Partners with LendingTree Surpasses $100 million in loans through 750 loans
$10 million capital investment from Community Investment Management LLC
Released a joint e-book with Lendio titled, “Small Business Lending in the Digital
Age” focused on the online small business lending industry
2016
§  Expands its invoice financing line of credit product from $250,000 to now $500,000
§  Released a survey covering the political issues affecting small businesses
§  Released a survey on the use of tax refunds by small businesses
85
TIMELINE
2014
§  Graduated from Boulder’s newest accelerator, Boomtown
§  First transaction arranged on the platform
HEADQUARTERS: Boulder, CO
Business inventory crowdfunding
CO-FOUNDERS: Sean De Clercq (CEO), Andrew Westwick (CTO)
FOCUS: Small and mid-size businesses
Crowdfunding platform allowing non-accredited users to browse companies, buy a
portion of the company’s purchase order (in exchange for a consigned rate),
promote them (if they wish) to help sell their inventory, earn return if company’s
goods sell.
Once funding goal met, Kickfurther buys the inventory, gives it to the business
who then sells it and returns a certain percentage to its backers every month
depending on how much inventory sold.
Originally named Ouiby, but changed name to KickFurther due to the difficulty of
pronouncing it
PROTECTION FOR BACKERS: Scrutinization of each offer (social scoring
algorithm that looks at social media, e-commerce websites, crowdfunding
websites, sales history, proof of production, client and professional references),
reputational risk, and each offer is limited to $100,000 initially.
Backers can also vote if a company doesn’t meet its promised monthly return on
whether to liquidate assets, sell assets at a lower cost or through alternative
marketing channel.
Kickfurther takes a withdrawal fee (1.5%) from users that withdraw funds from
platform. However, no fee to reinvest. Profits earned are considered short-term
capital gains.
Since the website is not dealing with the sale of securities, it does not run afoul of
the JOBS Act.
BUSINESS OFFERS FUNDED: 266. Average annualized profit for buyers: 30%.
Amount of payments: $2.47 million
2015
§  Launched a number of new and improved features on the platform
§  Released user profile survey
§  As of December 1, $2.2 million of loan inventory has been funded on the Kickfurther
platform
2016
§  Series A expected sometime this year
§  Surpasses $5 million in deal flow, with backers funding 230 offers by more than 187
companies, "earning an average greater than 2% consignment profit per month on
offers that have been completed“
§  Kickfurther announces the deployment of "Kickfurther Keys" providing backers with
early access to fund offers before they go live
§  Kickfurther teamed up with NSR Invest, "a leading peer-to-peer investment
management platform," to utilize NSR Invest's open architecture to provide
Kickfurther clients with "the ability to analyze and choose company offers using
NSR's best-in-class analytics, trading and reporting tools."
§  Charles River Ventures Partner Bill Tai joins Kickfurther's board of advisors
86
TIMELINE
2012
§  Founded with $200,000 seed investment
HEADQUARTERS: Denver, CO
Crowdfunding receivables start-up for commercial lines of credit
FOUNDER: Krista Morgan (CEO)
Morgan is also the co-host of Women Who Startup Radio
Working capital financing up to $5 million. Borrowers annual average APR for
borrowers is about 15-25%. Investors annual APRs ranging from 7% to 14%, 60day liquidity and easier reporting. (AltFi – October 2015). According to Morgan,
interest rates average between 15-18% (BusinessDen – March 2016).
Calls itself the “first marketplace lender to supply multi-million-dollar working
capital lines of credit to growing businesses in the U.S.”
Ex-Factor - revolving line of credit secured by receivables, inventory, monthly
recurring revenue. “Our borrowers typically use about 65% of their line and their
draws go up and down all the time.”
A daily, non-compounding fee on your outstanding balance. Only pay for what you
use.
Investors limited to those who are accredited and with whom P2BInvestor has an
existing relationship with and who have been invited to participate. Borrowers
limited to those that are B2B (or mostly B2B), generate at least $500,000 in
annual revenue and have been in business at least one year. P2Bi has 100
accredited investors and 50 active borrowers (BusinessDen – March 2016)
Funding
Round
Announced
Amount/Involvement
SeriesA
September2013
$1.2million/JohnSpiers,RockiesVentureClub
investorsandnumerousotherinvestors
2014
§  Launched and signs first client
2015
§  Announced more than $110 million in funding provided to its borrowers since the
platform’s launch
§  Launches Ex-Factor: “a revolving line of credit collateralized by accounts receivable,
monthly recurring revenue (designed for the company's Software-as-a-Service
customers) or inventory”
§  “Lending Hub” launched to existing clients – online borrower platform accessible on
mobile and web and in any browser. “A crowd of accredited and institutional
investors participates in funding each credit line, and investors earn a return on the
platform in exchange for supporting P2Bi's borrowers”
§  Announces first institutional partnership with HCG Fund Management
2016
§  Receives the first $5 million of $50 million in debt financing, allowing P2Bi to lend up
to $100 million
§  Announced institutional investment relationship with MW Eaglewood Americas LLC,
an SEC-registered investment adviser. According to P2Bi cofounder and CEO Krista
Morgan, the partnership "greatly increases the liquidity of our marketplace and
enhances our ability to lend to new high-growth borrowers"
87
Invoice Financing
TIMELINE
2013
§  Founded
2014
HEADQUARTERS: Palo Alto, CA
Business inventory crowdfunding
CO-FOUNDERS: Eyal Lifshitz (CEO), Nir Klar (CTO)
LOAN ORIGINATION: Balance sheet lender (line of credit, invoice factoring)
BlueVine works with B2B companies with invoice terms of 15 to 90 days and
funds invoices with a face value of $500 or more. Credit lines typically start
between $5,000 and can go up $250,000.
§  Business line of credit: $5,000 - $30,000. Interest rates as low as 6.9%.
Fixed payments over 6 months. BlueVine Flex Credit is a revolving credit
product. Requirements: In business for 6 months, business owner has a
personal credit score of 600+, revenues of at least $5,000 per month. ACH
transfers are free, but a $15 fee is assessed for each bank wire. Not
offered in the following states: AK, KY, MD, NE, NV, ND, SD, VT,
Washington, D.C.
§  Invoice factoring: $5,000 - $250,000. Receivables due in up to 90 days.
Requirements include a borrower personal credit score of 530+. In
business at least 3 months with monthly revenues of at least $10,000. ACH
transfers are free, but a $15 fee is assessed for each bank wire. Flat 85% 90% advance rates. If customer doesn’t pay, the borrower “is still
responsible for settling its balance with BlueVine.
FundingRound
Announced
Amount/Involvement
SeriesA
March&August
2014
$5.5million/LightspeedVenturePartners,Greylock
IL,Correla?onVentures,KreosCapitalandKima
Ventures,alongwithseveralotherangelinvestors.
SeriesB
January2015
$18.5million/83North,formerlyGreylockIL,and
LightspeedVenturePartners,withSiliconValley
Bank,Correla?onVenturesandotherprivate
investors.
SeriesC
January2016
$40million/MenloVentures,RakutenFinTech
Fundandothers.
§  Beta-launch
§  Joined a number of startup/legacy firms in supporting the White House SupplierPay
Initiative
2015
§  In September, the firm launched its manual invoicing feature from beta
§  Released study in December that found that 83 percent of SMB owners have
bootstrapped their companies and built them using their own personal finances
§  Only 15 percent of SMB owners have used a loan to fill cash flow gaps
2016
§  BlueVine saw a 12x increase in funded invoices in 2015
§  Announced Flex Credit for Small Businesses and adds Google Capital’s Ana Sirbu
as Vice President of Finance and Strategy. “Flex Credit marks the expansion of
BlueVine’s cloud-based working capital financing platform beyond invoice factoring.”
According to the release, “Flex Credit offers companies a business line of credit
between $5,000 and $30,000 with simple, transparent fees and pricing.”
§  Citi Ventures makes a strategic investment in BlueVine
89
TIMELINE
2008
§  Founded
CATEGORY: Marketplace based dynamic discounting
HEADQUARTERS: Fairway, KS
§  Additional offices in London, Hong Kong, San Francisco, Seattle, Frankfurt
and Singapore
FOUNDER: Alexander “Sandy” Kemper (Chairman and CEO)
C2FO stands for collaborative cash flow optimization.
C2FO is the first working capital market in the world. Buyers and sellers
collaborate on early cash flow by negotiating early invoice payment at rates that
are profitable for both parties.
Companies across the globe use C2FO to increase their operating income while
simultaneously producing vital working capital flows to their supply chains.
C2FO is a leader in the retail, industrial, manufacturing, energy, healthcare,
technology, telecom and transportation sectors.
SAMPLE COMPANIES USING C2FO: Costco Wholesale, Mothercare,
Nordstrom, Pfizer, TechData, ToysRUs, Union Pacific and Walgreens
2010
§  First C2FO market transaction
§  $2.6 million venture capital investment lead by Summerhill Venture Partners
2011
§  First Fortune 50 customer (Costco Wholesale)
2012
§  Formed partnership with Fifth Third Bank
§  $9 million venture capital investment lead by Union Square Ventures
2013
§  Participated in the Capital Access Innovation Summit co-hosted by the SBA and U.S.
Treasury Dept.
§  Participated in an invoice financing roundtable with Lord Young, the British Prime
Minister’s Small Business Adviser and officials from the UK’s Department of
Business, Innovation & Skills
§  Reports first $1 billion quarter in working capital flows. $18 million venture capital
investment lead by Mithril
2014
§  Reports first $1 billion month in working capital flows
§  Held Working Capital Summit in Florida with Whole Foods and Karen Mills as
keynotes
§  Opens London office to serve EMEA market
§  $27 million venture capital investment lead by Tiger Global
2015
§  Publishes Working Capital Outlook Survey findings
§  Reports first $1 billion week in working capital flows
§  $40 million venture capital investment lead by Temasek
2016
§  Adds Citi Ventures to its list of investors to support the company’s global operations
§  Named Erin Carney, formerly with Fountain Capital Management, as Chief
Investment Officer, and Kerri Thurston, formerly with Garmin International Inc., as
Senior Vice President of Finance
§  Since May 2010, C2FO has generated more than $48 billion in working capital flows
volume and over 198 million days of accelerated payment
90
2014
HEADQUARTERS: Scottsdale, AZ
FOUNDER: James Nielsen (CEO)
“CreditSuppliers provides construction material financing to help contractors and
subcontractors grow their business while merchants, vendors, and material
suppliers get paid in a timely manner.”
Revolving line of credit ranging from $15,000 - $5 million. Pay for supplies in 10
days or less. Term: repayment up to 150 days. Fees: Transaction fee of 3.5%
charged to each invoice. Outstanding balances carry a monthly interest rate of 1%
(1-90 days), and 1.5% (91-150 days). Requirements: Three supplier references
and other requirements. No FICO required.
“We don't base your Master Credit Limit on your personal FICO. You are treated
based on the relationships you have with the business community.”
Limited to participating suppliers
CreditSuppliers, LLC, is a wholly owned subsidiary of Atlas44, LLC.
TIMELINE
§  Atlas44, LLC, the parent company of CreditSuppliers, received an initial $12.5 million
capital commitment for CreditSuppliers' proprietary lending platform from G8 Capital
§  Official product launch
2015
§  Crowdnetic launched its Marketplace Lending Gateway which includes: Avant,
CreditSuppliers, Funding Circle, Kabbage, Lending Club, Marlette Funding, OnDeck
and Payoff
2016
§  Atlas44, the parent company of CreditSuppliers, announces a $10 million dollar
equity infusion by RJT Credit
91
TIMELINE
2009
§  Founded with focus originally on providing financing for digital publishers
HEADQUARTERS: Los Angeles, CA
FOUNDER: Jed Simon (CEO)
FOCUS: Small and mid-size businesses in the digital media sphere
Once invoices are verified: “FastPay advances a percentage of the funds up front
and rebates the remaining amount once your client pays.”
PROPRIETARY TECHNOLOGY PLATFORM: IGNITE
Lines of credit from $5,000 to $20 million within two days.
BY THE NUMBERS:
§  Equity Raised: $19M ($15M from Oak HC/FT)
§  Debt Capital Partners: Wells Fargo & SF Capital
§  Funds originated: $1 billion
§  Invoices Financed: 30,000+
§  Loss Rate (on net): 6bps
§  Liquidity: Receivables turn 5x/yr (avg. DSO 69 days)
FastPay Labs – “intense data analysis, to industry research to portfolio case
studies and even some party planning, it ALL goes down in the Lab.”
2010
§  Launched
2012
§  Secured $25 million in commercial financing from Wells Fargo, SF Capital Group
2013
§  Raised $10 million credit facility for the development of new products and initiatives
§  Company has provided more than $100 million in working capital to more than 100
publishers, ad-tech companies, and other digital media businesses. Yet to have a
single default
2014
§  FastPay NYC launches
§  Released a report on the average length of payment terms in the digital advertising
industry
§  Raises $15 million in equity funding from Oak HC/FT. Oak’s first FinTech investment
from its recently launched $500 million growth-equity fund
§  Has originated more than $500 million in loans to digital media companies
2015
§  Partnership with leading advertising software platform, Mediaocean, providing
vendors with FastPay solutions to manage receivables
2016
§  Surpassed $1 billion in cumulative loan volume
92
TIMELINE
2012
§  Founded
2013
HEADQUARTERS: San Francisco, CA
CO-FOUNDERS: Eyal Shinar (CEO), Yuval Ariav, Tomer Michaeli
LOAN ORIGINATION: Balance sheet lender
Unlike factoring companies, Fundbox provides companies with 100% of the
invoice value. “We never come between you and your customers, as factoring
companies do.”
ADVANCE: $100 - $15,000. No interest charged, though small fee each week
that an outstanding balance remains (equal to approximately 0.5% of the invoice
value). Terms: Advances are automatically paid back over 12 weeks. “Fundbox
will automatically debit 1/12th of the invoice plus the fee every week for 12
weeks.” An invoice clearing fee is "determined based on your business' health and
specific invoice properties."
In order to use Fundbox, a small business owner or bookkeeper simply connects
with one-click to their accounting and bookkeeping apps, including Quickbooks,
Xero, or Freshbooks, on Fundbox.com
Funding
Round
Announced
Amount/Involvement
SeriesA
April2014
$17.5million/KhoslaVentures,FormerCi?groupchiefexecu?ve
VikramPandit,RonConway’sSVAngel,formerThomsonReuters
chiefexecu?veTomGlocer,andothers.
SeriesB
March2015
$40million/GeneralCatalystPartners,KhoslaVentures,Shlomo
Kramer,BlumbergCapital,NyCaInvestmentPartners
Venture
September2015
$50million/BezosExpedi?ons,SoundVentures,EntréeCapital,
KhoslaVentures,GeneralCatalyst,BlumbergCapital,Shlomo
Kramer.
§  Originally based in New York according to first blog post
2014
§  Partnerships with FreshBooks, Harvest, where its users can obtain short-term
financing from Fundbox based on outstanding invoices
§  Participated in a one-day event with the U.S. Small Business Administration called
"Access to Capital: Money to Mainstreet" in NYC
2015
§  September: Underwrites 15 millionth invoice along with $50 million in equity funding
raised
§  Partners with Intuit which launched a new product giving small business owners
ability to advance payments for outstanding invoices within QuickBooks
§  Released data showing that 64% of small businesses wait beyond net terms for
payments
93
TIMELINE
2009
§  Founded
2011
§  Expands to the UK
2012
HEADQUARTERS: San Francisco, CA
CO-FOUNDERS: Former CEO Bertram Meyer, CPO Markus Ament, CTO Philip
Stehlik, and General Manager of Germany Martin Quensel.
CURRENT CEO: Cedric Bru
ADDITIONAL OFFICES: Austin, Texas; Park City, Utah; London, England;
Düsseldorf, Germany; and Sofia, Bulgaria
“Taulia Dynamic Discounting allows for a discount at any time. With Taulia,
suppliers can choose to be paid on any date once the invoice is approved, with
correlating discounts (the earlier the payment, the greater the discount).”
The Taulia platform has processed over $150 billion in transactions for 700,000
suppliers. Contracts with Coca Cola, John Deere, RBS, for use of its Dynamic
Payment Platform to automate invoice processing, reduce supply chain costs.
“In exchange for getting paid early, suppliers give up a small percentage of their
total invoice amount to the buyer and Taulia.” APR dependent on the credit quality
of the buyer though can range from 1.5% - 12%. "Taulia calculates everything for
them. We display the effective rate and also the amount.“ (Nerdwallet – April
2015)
FundingRound
Announced
Amount/Involvement
SeriesA
December2010
$3.2million/MatrixPartners,TrinityVentures,AngelsForum
andothers.
SeriesB
July2011
$8.5million/MatrixPartners,TrinityVentures,DAGVentures
SeriesC
August2013
$18million/Lakestar,MatrixPartners,TrinityVentures,TELUS
VenturesandDAGVentures
SeriesD
July/September
2014,January
2015
$55million($27million,$13million,$15million,respec?vely)/
Trinity,Matrix,LakestarandDAGVentures,BBVAVentures,
EDBI,ZoukCapital.
SeriesE
January2016
$46million/ZoukCapital,includingallexis?ngins?tu?onal
investors,andothers.
§  SAP endorses Taulia to be one of their most strategic partners
2013
§  Provides eInvoicing and Supplier Self-Services to the real estate, oil and gas
markets
§  Introduced the Million Dollar Guarantee program where customers will realize $1
million in savings from dynamic discounting within first year of implementation.
Companies must have over $3 billion in annual invoice spend
2014
§  Launch Taulia Enhanced Discounting allowing “buying organizations to offer their
suppliers early payments in exchange for a discount using either their own cash or
3rd party funds”
§  Supporter of Obama Administration initiative, SupplierPay. Taulia announces Early
Payment Quick Start Initiative – “a comprehensive program designed to incentivize
corporations to implement a solution that enables early payments to suppliers”
§  Launches analytics platform, Taulia Analytics, which aggregates and analyses
millions of supplier transactions with the ability to compare payment terms against
benchmarks across industry, region, country... etc.
2015
§  Released report covering the payment process between corporations and their
suppliers. Finds that 47% of suppliers paid after agreed-upon payment date
§  Partnership with KPMG to focus on supply chain finance activities
§  Cedric Bru named CEO. Taulia looking to IPO in 2016 at $1 billion valuation
2016
§  Posted 219 percent new bookings growth compared to the same period last year.
"New customers signed during the fourth quarter will bring 50,000 suppliers in 71
countries to the Taulia platform, and an additional $65 billion in spend.“
§  Announced partnerships with BuyerQuest, a lending e-procurement supplier, and
Hanse Orga, a global provider of SAP-integrated finance solutions
94
Merchant Cash Advance
2011
TIMELINE
§  Founded
2014
§  Changes name from Zazma to Behalf
HEADQUARTERS: New York, NY
CO-FOUNDERS: Benjy Feinberg (CEO), Shai Feinberg, and Jeremy Esekow
Extend up to $50,000 in credit allowing small businesses to pay their vendors.
Repayment plan up to 180 days. “Your rate is based on our credit check and will
be within $11 to $30 per month, for every $1,000 borrowed.” Only charged for
what you use.
"Behalf now works with select vendors to enable you to get up Net 15, 30 or 45
day terms, interest free.”
Does not work to pay existing debt, including credit card bills, bank loans, payroll,
rent, oneself.
Report to credit bureaus including D&B, Experian and Equifax. Do not report to
personal credit bureaus.
Israeli company formerly known as Zazma
It works with suppliers of products to small businesses. Behalf pays the vendors
immediately. Small-business clients receive the inventory they need from the
vendor and pay Behalf.
Funding
Round
Announced
Amount/Involvement
SeriesA
September2013
$10million/SequoiaCapital,SparkCapital
SeriesB
July2015
$119million/MissionOG,MaverickVenturesIsrael,Sequoia
Capital,SparkCapital,VictoryParkCapital
2015
§  Attended Treasury online lending meeting in Washington, D.C.
§  Opens up headquarters in NYC
§  Announce collaboration with Mastercard and Comdata. “The initiative helps improve
cash flow for SMBs by providing alternative payment terms for their payments to
merchants that accept MasterCard and are approved for participation by Behalf. The
offering extends Behalf’s product benefit by adding the ability to use a unique,
secure virtual card for both point of sale and online purchases while receiving
convenient payment terms”
96
1998
TIMELINE
§  Launched
§  First company to develop and apply a Daily Remittance Platform
HEADQUARTERS: New York, NY
CURRENT CEO: Daniel DeMeo
ORIGINATION: WebBank (small business term loans and flexible payment
TrakLoan), CAN Capital Merchant Services, Inc., (Merchant Cash Advances),
CAN Capital Asset Servicing, Inc. (longer term, 2-4 year, installment loans)
SMALL BUSINESS TERM LOAN: $2,500 - $150,000 (single business), up to
$250,000 (multiple locations). Terms: 4 - 24 months. Requirements: gross
revenue of $4,500+, in operation for greater than 4 months.
MERCHANT CASH ADVANCE: $5,000 - $150,000 Purchase Price paid to
merchant. Collection of purchased receivables based on fixed percentage of daily
payment card sales.
INSTALLMENT LOAN: Loans from $50K - $100K. 2, 3 or 4 year terms. Monthly
repayment schedule.
TRAKLOAN: Flexible payment loans (based on fixed percentage of payment card
sales) from $2,500 to $150,000.
Focused on providing capital access to underserved Main Street businesses.
Since launch in 1998, provided access to over $6 billion in capital to small
businesses.
Daily Remittance Platform - evaluates business-specific data from a wide variety
of banking, credit card processing and other sources. Platform for collecting daily
loan payments or remittances of purchased receivables and using that data, and
other information, to service and underwrite customers.
CAN Capital Small Business Health Index - Focus on small and mid-sized
business climate and financial product options.
Real-time platform and risk scoring models to assess and facilitate the provision
of capital to SMBs in the US.
Over 175,000 funding transactions since 1998
2012
§  $30 million funding round led by Accel with participation from QED Investors and
Ribbit Capital
2013
§  Capital Access Network rebrands as CAN Capital
§  Integrates online lending engine with PayPal allowing working capital funds to be
deposited into merchant PayPal accounts
§  Surpassed $3 billion in capital provided to small businesses since inception
§  Debuts CAN Mobile Funder tool for small businesses generating faster closing times
through the use of mobile technology
2014
§  Reaches $4 billion funding milestone
§  Raised $33 million in funding led by Meritech Capital Partners with increased
participation and ownership from existing investor Accel Partners. Meritech and
Accel were joined in the funding round by Ribbit Capital and QED Investors
§  Launch CAN Connect “a full suite of Application Program Interfaces (APIs) that
enables third-party providers, such as payment processors and providers of point of
sale (POS) systems and cloud accounting software, to offer their small business
customers access to working capital based on available merchant data.”
§  Closed its first securitization totaling $200 million and rated investment grade by
S&P and DBRS
§  Partnered with Yodlee allowing funding via CAN Capital through Yodlee Small
Business Solution
2015
§  Partnered with Worldpay allowing Worldpay merchants to take advantage of CAN
Capital’s finance programs. Also partnered with iPayment providing 150,000 small
businesses working with iPayment the ability to obtain flexible financial solutions
§  Secures $650 million senior credit facility led by Wells Fargo
§  Provided access to more than $5 billion in capital to small businesses
2016
§  Surpassed $6 billion in capital provided to small businesses since inception
§  Launched the Innovative Lending Platform Association with Kabbage and OnDeck
97
TIMELINE
2002
§  AmeriMerchant founded
2007
§  True North Capital founded
HEADQUARTERS: New York, NY
FOUNDER: David Goldin (CEO)
CAPIFY: Customer centric, Accountable, Product, Integrity, Focused, Yearn
LOAN ORIGINATION: Merchant Cash Advance: Merchants Advance LLC (across
49 states, in CA: Apex Advance LLC). Small biz loans: Main Street Business
Loans, LLC; Bank of Lake Mills, Wisconsin through AmeriMerchant West, LLC.
BUSINESS LOANS: $5,000 - $1,000,000. Cash advances and loans are based
on the strength of the business, not a borrowers credit history
“Capify does not offer business credit or loans directly. Capify offers through its
affiliates and subsidiaries two products, a Merchant Cash Advance and a Small
Business Loan.” Merchant cash advance offered by Merchant Advance LLC
across the 50 states, except California where advances are offered by Apex
Advance LLC. Small business loans provided by Main Street Business Loans,
LLC or Bank of Lake Mills.
Eligible for merchant cash advance if a borrower's business processes at least
$8,000 a month in credit card sales and the business has been processing credit
cards for at least 60 days. Eligible for a small business loan if a borrower has
been in business for at least 1 year, has $10,000 a month in gross sales, and has
proof of ownership.
Operates in the US, UK, Australia and Canada.
Founding member of the Small Business Finance Association. SBFA used to be
called “North American Merchant Advance Association” before rebranding in April.
“Capify API small business funding platform analyses merchant data through our
predictive model scoring enabling you to offer your small business customers
access to the working capital they need.”
Since inception: 24,000+ funded transactions across four countries providing
access to over $500 million.
2008
§  United Kapital and AUSvance founded
2015
§  Rebranding: AmeriMerchant, United Kapital, AUSvance and True North Capital all
come under the umbrella of Capify – now the most diverse, worldwide alternative
small and medium-sized business (SMB) finance platform. Opens up Capify’s SME
lending services to about 35 million businesses
§  Partnerships with Alibaba, becoming the fourth platform to partner with the ecommerce giant
§  The Small Business Finance Association hires Stephen Denis as Executive Director.
Capify CEO takes the role of President at the Association
98
TIMELINE
2006
§  Founded
2011
§  At the time, provided the largest merchant cash advance in the history of the
specialty finance industry to develop Tropicana Hotel’s Las Vegas Mob Experience
HEADQUARTERS: New York, NY
FOUNDER: Andrew Reiser (CEO)
LOAN ORIGINATION: balance sheet
Merchant cash advance, revenue based factoring, and commercial loans for small
businesses.
FOCUS: Emerging entrepreneurial businesses across the U.S. who have little
access to bank loans or SBA loans.
Financing from $10,000 - $1 million. Business financing: Revenue-based
financing, small business loans, factoring, equipment finance.
2013
§  As of 2013, considered itself to be the largest provider of syndicated small business
loan products
§  Expands to Australia after joint venture with Australia’s Prospa Advance allowing
Strategic to provide “the technology for the electronic servicing, underwriting and
cash management of all Prospa Advance accounts in Australia. Strategic Funding
Source is also supporting the growth of small businesses in Australia by jointly
funding all merchant cash advances and loans originated by Prospa Advance”
2014
§  Received $35 million from investment firm Pine Brook as part of a $110 million line of
equity arrangement
§  Financed roughly $700 million for small businesses since inception
2015
§  Named Stephen Lerch Chief Financial Officer
§  Closed a $90 million credit facility with CapitalSource, with participation from East
West Bank and BankUnited
99
Nonprofit Micro- and Small Business Finance
TIMELINE
1961
§  Accion founded
1991
§  Accion begins lending in the U.S. starting in Brooklyn, NY
NETWORK HEADQUARTERS: New York, NY
§  Regional headquarters: NY, Chicago, Albuquerque, San Diego
CURRENT CEO: Gina Harman (Accion U.S. Network)
Largest micro- and small business lending network in the U.S. through four Accion
member organizations - each an independent CDFI.
BUSINESS LOANS: $200 - $1M, depending on qualifications and geography
(average loan size is $10,000). Fixed rates from 8% - 22% APR. Terms of 6 - 84
months depending on geography and loan product. No pre-payment penalty.
Closing costs and processing fees vary based on loan product and geography.
REQUIREMENTS: Businesses with 6+ months track record; credit score of 500+;
no bankruptcies, foreclosures or late mortgage payments in the past 12 months;
sufficient cash flow on a monthly basis; up-to-date on all bills. Other criteria may
apply for other types of loans.
Since 1991, the members of the Accion U.S. Network have made more than
57,000 loans to business owners. Globally, Accion is dedicated to building a
financially inclusive world with operations spanning 32 countries.
1994
§  Accion U.S. lending expands to five additional cities
2011
§  The Accion U.S. Network is founded to unite Accion member CDFIs into the largest
non-profit micro- and small business lending network in the country
2015
§  Accion’s local office presence has expanded to 11 states and 14 cities. In addition,
Accion’s online loan application and business resources are available to
entrepreneurs nationwide
§  Co-author and original signer of the Small Business Borrowers’ Bill of Rights
unveiled in Washington, DC
2016
§  The members of the Accion U.S. Network have collectively lent more than $490
million through more than 57,000 loans to U.S. businesses, leading to the creation or
sustainment of more than 22,000 jobs. Accion has a repayment rate of 95%
101
TIMELINE
2005
§  Founded
2008
§  Launched
§  Partnership with Oliver Wyman and launch of Kiva Externship Program with OW staff
contributing to Kiva’s continued growth and expansion
HEADQUARTERS: San Francisco, CA
Personal loans, small business loans
CO-FOUNDERS: Matt and Jessica Flannery, Premal Shah (President),
CURRENT CEO: Martin Tschop
World's first person-to-person micro-lending website
501(c)(3) non-profit organization
Investors can make loans for as little as $25 after selecting the right borrower on
Kiva’s marketplace. Profiles and stories of each borrower included on the website.
Loans dispersed by Kiva field partners (microfinance institutions… etc.) who vet
each borrower. 0% interest loans. Borrowers repay to lender’s Kiva account.
100% of every dollar lent goes to funding the loan, Kiva doesn’t take a cut.
Lenders can expect repayment in 6-12 months.
Kiva, itself, is primarily funded through grants, donations, corporate sponsors,
foundations… etc.
Kiva Labs – testing and developing new financial products for use by borrowers
worldwide.
First loans went to individuals in Uganda.
Notables on Kiva Board: Wences Casares (Xapo), Amy Klement (Omidyar), John
Muller (PayPal), Reid Hoffman (LinkedIn)
2009
§  Launches online microfinance pilot program in the U.S. through partnerships with
local microfinance institutions ACCION USA and Opportunity Fund
§  Kiva surpasses $100 million in microloans
2010
§  Receives $5 million grant from Omidyar Network. At that time, the largest grant the
non-profit had received
§  Receives $1 million from Visa to be used to raise awareness of microlending
§  Funding student loans added to its microlending marketplace
2011
§  Helped arrange over $200 million in loans
§  Launches Kiva Green Loans with focus on lending to green businesses/individuals
§  Launch of pilot program, Kiva Zip in US and abroad. Offering more direct funding to
small business owners
2012
§  750,000 individuals have signed up and made a loan through the Kiva platform
2013
§  Capital One announces it will match up to $500,000 in loans made through Kiva’s
platform
§  Kiva surpasses $400 million in microloans, 1 million borrowers reached
2015
§  Intuit partners with Kiva Zip providing underserved small businesses with access to
loans through its Quickbooks Financing platform. The Intuit Financial Freedom
Foundation will establish a $50,000 loan matching program with Kiva Zip with half of
that amount designated for women-owned small businesses
§  Julie Hanna, Kiva Executive Chair of the Board, named Presidential Ambassador for
Global Entrepreneurship (PAGE)
§  Launches no-interest microloans in the U.S. nationwide. Was originally a pilot
program offered in select US cities
2016
§  International Women's Day: 40,850 lenders lent nearly $4.5 million to women,
funding more than 14,200 women
§  Launched Kiva Oakland in partnership with Oakland's Mayor Libby Schaaf
§  Kiva teamed up with Progress, Rangle.io, and Google to "help Kiva develop better
mobile applications for connecting lenders and borrowers around the world."
Federal Initiatives
TIMELINE
2015
HEADQUARTERS: Washington, DC
SBA lending for working capital and other needs.
CURRENT SBA HEAD: Maria Contreras-Sweet
SBAONE: Online origination platform providing lenders with automated access to
SBA’s guarantee. Processes SBA 7(a) and SBAExpress Loans with the goal of
handling SBA 7(a) loan from inception to end.
§  SBA One will reduce loan processing times for average SBA loans by 64%,
which means some processing times for some SBA products will fall from
100 hours to 24 hours. (American Banker – July 2015)
SBA LINC (Leveraging Information and Networks to access Capital): Online
platform matching potential SBA loan candidates with SBA-approved lenders in
the 50 states. “More than 300 lenders participate in LINC throughout all 50 states
and U.S. territories.” Loans: Up to $5 million. Maxium rates: 4-10% (as of May
2015). Terms: up to 25 years. Business information sent to a pool of prospective
SBA lenders operating in the area of the business. Lenders are asked to respond
within two days.
“LINC is a tool that small businesses can use to identify potential lenders in their
communities.”
§  Launched pilot: Leveraging Information and Networks to Access Capital (LINC) in
February. Available only to nonprofit lenders
§  In May, SBA announced the expansion of LINC, now available to all 7(a) lenders
nationwide
§  In June, SBA launches “Startup in a Day” Initiative, in conjunction with the National
League of Cities, with the goal to enable entrepreneurs “to discover and apply for all
city, county, state, and federal licenses and permits needed to start a business in 24
hours or less.” 11 mayors signed the Startup in a Day pledge
§  In July, SBA launched a new credit scoring model combining a business owners
personal and business credit scores. The score will be used by credit unions and
other lenders in an effort to make loan approvals faster. The score will only be used
for those businesses looking to secure a loan of $350,000 or less
§  In August, SBAOne went live for Region III SBA 7(a) lenders, and will expand to
other areas of the country later in the year
2016
§  In testimony to the House Small Business Committee in January Contreras Sweet
said LINC has connected 20,000 small businesses with lenders
SBA LINC
104
Enter: Incumbent Banks
TIMELINE
2015
HEADQUARTERS: New York, NY
Personal loans
Steven Scherr: CEO of GS Bank, USA
Harit Talwawr: head of Goldman’s planned online lending unit
LOAN ORIGINATION: Balance sheet lender
The firm has been talking about making loans of $15,000 to $20,000
Goldman will make loans directly. It’s also a way for Goldman to expand its
banking business without going through the trouble of opening up actual
branches.
“The traditional means by which financial services are delivered to consumers and
small businesses is being fundamentally re-shaped by advances in technology,
maturity of digital channels, use of data and analytics, and a focus on customer
experience.” – GS memo.
GS Bank: Online savings: 1.05% APY (no minimum deposit to open, must
maintain a balance of $1 or more); Certificate of Deposit: 1% APY (Term: 1 year),
2% APY (Term: 5 years).
“In April 2016, following regulatory approvals, GS Bank USA acquired GE Capital
Bank’s online deposit platform and assumed approximately $16 billion of deposits,
consisting of approximately $8 billion in online deposit accounts and certificates of
deposit, and approximately $8 billion in brokered certificates of deposit.” (GS
Form 10-Q)
“GS Bank is a New York State-chartered bank and is supervised by the New York
State Department of Financial Services, the Federal Reserve Bank of New York
and the Consumer Financial Protection Bureau. GS Bank is a member of the
Federal Reserve System and the Federal Deposit Insurance Corporation
(”FDIC”), which insures deposits up to certain limits.”
GS Bank deposits as of March 2016: $87.4 billion (GS Form 10-Q)
§  Announced that it would enter consumer peer to peer lending space
§  Announced new hires: Former Citigroup Inc (C.N) credit card executive David Stark,
who will serve as the business’s chief risk officer. Also joining the team is the former
Lending Club Corp (LC.N) operations executive Darin Cline who will lead operations.
Other hires include Dustin Cohn, who will head up branding for the new unit. Cohn
was the former marketing officer at underwear and sleepwear company Jockey
International, and he also helped develop brand campaigns for Gatorade and Pizza
Hut at PepsiCo. (PEP.N) Goldman has also hired Boe Hartman, a former executive
at Barclays PLC’s (BARC.L) Barclaycard division. In May, the bank announced the
hiring of Harit Talwar, the former head of Discover Financial Services’ U.S. cards
division, to lead the planned online lending unit that is currently a team of six and is
expected to have a team of about 100
2016
§  Mitch Hochberg, a former CFPB attorney, was named as head of compliance for the
online lending unit
§  GS Bank launched, with the help of Goldman’s acquisition of a $16 billion book of
deposits from GE Capital. Important to note that Steven Scherr, in an interview with
FT, commented that “the new funds could support Mosaic, the bank’s embryonic
effort to rival online lenders such as Lending Club and Prosper. That unit, run by a
former senior executive at Discover, now numbers about 100 people, and is
preparing to start originating loans by the end of the year.”
§  Goldman appoints Steven Scherr as CEO of GS Bank USA. Scherr will also retain
his position as Chief Strategy Officer. “He will oversee the online lending platform
being developed under the leadership of Harit Talwar, as well as our newly-acquired
online deposit platform.” – GS memo
106
TIMELINE
2014
§  Launches Wells Fargo Works for Small Business with the goal of extending $100
billion in new lending to small businesses by 2018
§  Launched Wells Fargo/Gallup Small Business Index, providing quarterly analysis on
the state of small business
2015
§  Wells Fargo begins piloting FastFlex to a prequalified group of Wells Fargo
customers
HEADQUARTERS: San Francisco, CA
Small business loans
CURRENT CHAIRMAN AND CEO: John Stumpf
HEAD OF SMALL BUSINESS: Lisa Stevens
LOAN ORIGINATION: Balance sheet lender
FastFlex Small Business Loan
§  Created in-house and developed by Wells Fargo Business Direct - "a team
that provides small business loans under $100,000 each.“
§  Available to existing Wells Fargo customers who have been with the bank
for at least one year.
§  Loans: $10,000 - $35,000. Terms: 1 year. Interest rates from 13.99% to
22.99% (WSJ, May 2015). Required payments made on a weekly basis
and automatically deducted from the customer's business-deposit account.
2016
§  As of March, Wells Fargo provided nearly $41 billion in new loans to small
businesses
§  Launched FastFlex Small Business Loan, "an online, fast-decision loan that is
funded as soon as the next business day and offers a competitive interest rate to
small businesses with short-term credit needs.“
107
VII. Common Originating Banks*
*Please note that there are other banks that other online, non-bank finance platforms have partnered with
VIII. Infrastructure Providers/P2P Investment Tools
IX. Credit Scoring: The Players
X. Trade Associations/Advocacy Groups Involved
*Based on responses to the U.S. Department of the Treasury’s request for information on the online marketplace lending industry and the formation of certain interest groups following the Treasury
RFI. Note: Peer2Peer Finance Association is the UK trade association for the peer-to-peer industry.
XI. Regulatory Outlook 2016 and Beyond: Online,
Non-Bank Financing Issues Likely to Emerge
Offshore/
Tribal Firms
Automatic
Debiting
• Firms operating online lending businesses on federallyrecognized tribal lands or offshore. Concerns expressed in
various comment letters about the difficulty of being able to
regulate these types of firms.
• At the same time, a handful of lenders urged the department
and other regulator authorities to respect tribal sovereignty,
and referred to Executive Order 13175, as well as the Tribal
Financial Services Regulatory Authority.
• Question as to whether borrowers have been properly
notified about automatic withdrawals and whether they are
given the opportunity to opt-out.
112
XI. Regulatory Outlook 2016 and Beyond: Online,
Non-Bank Financing Issues Likely to Emerge Cont.
Redlining
• Concern that proprietary algorithms lenders use may
inadvertently cause redlining to occur.
RiskRetention
• Whether marketplace lenders need to have “skin-in-thegame” in the origination of loans, and/or the securitization of
loans?
113
XI. Regulatory Outlook 2016 and Beyond: Online,
Non-Bank Financing Issues Likely to Emerge Cont.
Debt
Stacking
Issuing-Bank
Model
• Multiple loans/lines of credit/cash advances to a small
business and concerns about debt spiral and potential
bankruptcy.
• Soft vs. hard credit checks
• Concerns that non-banks are partnering with banks to evade
state usury caps. Concerns not only regarding the legality
surrounding the model, but of states rights (especially when
it comes to setting usury laws).
• Need to also consider whether a non-bank licensing regime
makes sense and what it would look like.
114
XI. Regulatory Outlook 2016 and Beyond: Online,
Non-Bank Financing Issues Likely to Emerge Cont.
Institutional
Risk
Underwriting
• Evolution from peer-to-peer lending to marketplace lending
with the influx of institutional investment into the online
lending space.
• Do platforms depend too much on institutional investment?
Is there the potential for capital flight?
• Concerns about the data used in underwriting and whether
underwriting models compliant with federal/state regulations.
• More data points and variables, has this improved credit
access?
• Investor skepticism and larger than projected losses on
some securitizations, how are platforms responding?
115
XI. Regulatory Outlook 2016 and Beyond: Online,
Non-Bank Financing Issues Likely to Emerge Cont.
Systemic
Risk
Regulation
(overall)
• Do marketplaces contribute to systemic risk, or do they
actually enhance financial stability?
• Are online lenders sufficiently regulated?
• Where are their regulatory shortfalls – consumer and/or
small business lending?
• Multiple comment letters to Treasury’s RFI identified small
business lending, in particular, as in need of greater
regulatory oversight.