![]() I believe it's a win-win-win for everyone involved. The result is the future of integrated fintech. Instead of each organization competing for a slice of the old pie, they're working together to make the new pie bigger. The fintechs and banks that recognize the pending changes are cultivating relationships based on each organization's core competencies. The finance industry is rapidly evolving. As the conversations and the deal progresses, my advice would be to establish a clear common ground, set metrics for a successful partnership and institute reasonable protection for your product and services for the medium and long-term. You can't remove them from the equation helping them is the unifying purpose for everyone involved.Īs fintech leaders approach opportunities to work with traditional banks, I would advise they come to the table with a desire to genuinely understand the pain points banks face and a high dose of appreciation for the regulatory scrutiny they have to abide by. Banks bring the institutional knowledge, capital and expertise to the table, along with a broad base of customers and access to the capital that's the lifeblood of entrepreneurship.īut for these partnerships to succeed, you also have to remember the third - and most important - party: the small business customer. Fintechs can provide banks with agility, speed to market and, of course, the technology that enables them to enhance their digital customer experience, improve efficiency and even expand their customer base. Though I'm one of the first to say I love competition, strategic collaboration is the answer to filling these gaps. Working in silos, traditional lenders often miss opportunities to fuel businesses that can thrive. The same SBA report indicated that of the survey respondents, only 13% of approved loan applications were women. The team approved first-round PPP loans for women amounting to 37% of approved loan applications. Looking at Lendio, 24% of our first-draw PPP borrowers were Black business owners, although a February 2021 SBA report indicated that, industry-wide, only 4.8% of first-round borrowers surveyed were Black.įor Lendio, women were more successful at securing first-round PPP funding. In fact, through the course of the PPP, fintech firms accounted for over half of the loans made to Black business owners. For example, an analysis by New York University showed that Black-owned businesses struggled to obtain PPP loans from traditional banks, but they were 12% more likely to be approved for a PPP loan by a fintech lender. But there's still so much more we can do to improve access to capital for more small business owners. The partnerships forged during the pandemic revealed that finance partners can move fast and make a difference by working together. The collaboration facilitated more than 200,000 PPP loans. Lendio ended up partnering with 320 financial institutions - from big banks to CDFIs to regional lenders - to distribute $10 billion in PPP funds. Two years later, we're still hearing stories about how access to PPP loans helped save people's businesses and livelihoods. When that very first business received funding, we knew the effort was more than worth it. This time we were fueled by the mission not just to fuel but to save our customers. Our teams worked 18-hour days to launch online PPP applications for small businesses around the country. ![]() With the focus on helping small businesses survive, we launched a herculean effort that relied on every player's strengths. While banks had the capital, many couldn't pivot their online infrastructure within weeks to facilitate hundreds of thousands of loans. We realized that serving them through this disaster meant relying on our technology and collaborating with banks and the SBA to help distribute PPP funds as fast as possible. Our mission has always been to support and advocate for small businesses.
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