Traditionally, slim margins have steered financial institutions (FIs) away from serving SMBs. But now, Lendio Intelligent Lending is enabling FIs to launch new products and tap into new revenue streams in previously cost-prohibitive markets.
The cost to underwrite a $25,000 loan and a $250,000 loan are identical. This means small loans make less sense given the slim margins (if any). As such, lenders are unable to offer certain loan products to help SMBs that are seeking smaller amounts of capital. But profitable growth is absolutely achievable for lenders.
The Lendio Intelligent Lending solution enables lenders to extend their reach and prospect for borrowers, pre-qualify them, and deliver high-speed automation of underwriting smaller SMB loans. This not only reduces operational cost to boost margins, it also dramatically bolsters loan volume–thus giving lenders access to the previously cost-prohibitive SMB lending market.
The solution analyzes customer bank transaction data and cash flows, and applies the lender’s risk policies to prequalify borrowers with a potential range of capital funding. Coupled with proven, pre-packaged marketing content and campaigns that lenders can use to engage borrowers, lenders are able to reduce the need for broad marketing spends and cut overall acquisition costs.
The Lendio Intelligent Lending solution integrates with Lendio’s Marketplace platform, which to date has facilitated 350k SMB loans worth $13B for our lending partners. Additionally, lenders using Lendio Intelligent Lending may also participate in Lendio’s partner ecosystem for embedded financing. These solution features enable lenders to cost-effectively compete for new borrowers in markets where they previously had minimal access.
Lendio Intelligent Lending proactively compares applicant provided data with public records of the borrower. It automatically analyzes the applicant’s bank transactions and cash flow, and applies the lender’s risk policies to drive decisioning. All this is done without manual tasks by humans– thus making the entire lending operations more financially appetizing.
Lending to small businesses in the U.S. rose from $254 billion to $461 billion between 2019 and 2020.
— FFIEC
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