A recent post by Joe Ganzelli at Cornerstone Advisors makes a point that community institutions are quickly losing market share in business loans to fintech players like PayPal, OnDeck, Kabbage, Amazon and Square who collectively lent over $11 billion to small businesses in 2018. If changes are not made at community institutions, a “Moment of Reckoning” may be coming soon.
Joe references a podcast by Karen Mills, former SBA Administrator and now Senior Fellow at Harvard Business School - “We used to have 14,000 banks. When I started at the SBA, we were down to about 8- or 9,000 banks. Now we’re down to 5,000 banks.” Much of the technology that is transforming how small-business lending gets done is coming from fintechs, “the next wave of the fintech evolution” as a partnership between these innovators, and banks. “Particularly small banks.
Lucro has been concerned with this trend and working on a solution. In 2018 we rolled out our Digital Business Lending Center (DBLC, V1) and recently surpassed 1,000 transactions on the platform. We have used this time to finetune our needs and gather input from our Partner Credit Unions
The Lucro Team is developing DBLC V2 with exciting enhancements that include credit union customization for branding, credit metrics, and messaging. The new platform will also produce an automatic real-time Lucro Credit Memo (CAM) in a very cost-effective manner. Our Partner Credit Unions are now able to compete with much larger institutions and fintechs – providing a convenient cost-effective digital experience for their valuable small business members.