Letter From The Editor – Mar/Apr 2017

March 1, 2017 | By: Sean Murray

This story appeared in AltFinanceDaily’s Mar/Apr 2017 magazine issue. To receive copies in print, SUBSCRIBE FREE

Out of the many lenders and marketplaces that reported their 2016 earnings in the last month, several didn’t look so good. If algorithms and branchless-finance was supposed to make lending so much more efficient, why is it that so many online lenders are struggling to make a pro t?

As it would turn out, banks were not as doomed or as outdated as the technologists characterized them to be. Their cost of capital and brand name recognition (for most of them anyway) is proving very tough to compete with. In this issue we explore the latest trend, the drift back towards banking. That doesn’t mean that we are returning to a purely bank-dominated lending universe, however. On the contrary, it’s mainly the prime borrower market that banks are working to service better. There’s an entire segment out there for which bank financing is not the answer, at least not yet, and there’s plenty of exciting events taking place.

For small business owners, some still want a relationship with the person helping them obtain capital, they just want it in a different way. In the last few months, we spoke with several professionals who attest to having a text-based relationship with their clients, as in they communicate back and forth through their phones over text.

When I first heard about this, I assumed it had to be a one-off. “Wait, your applicants text you for updates with the underwriting process?” I asked a sales representative who seemed stunned that I would think that was odd. After a quick poll of other salespeople at a conference, the truth became clear to me. If you don’t attempt to have a text relationship with your clients, you might be at a disadvantage. In this issue, we explore why that might be.

And on that note, RU ready 4 this issue? Cuz I g2g so ttyl. Thx.