The Biz2Credit Lending Index report for May shows small business approval rates dropped almost everywhere. Approval rates at big banks fell two-tenths of a percent from April’s 24.3 percent figure, a post-recession high, to 24.1 percent in May. Approval rates dropped at alternative lenders as well, declining by two-tenths of a percent in May, as non-bank lenders granted 57.7% of funding requests. [read more: Small Biz Trends]
Fintech Global Debt Registry (GDR) today completed a secure, permissioned blockchain proof of concept. The system lays the groundwork for providing investors and senior lenders in the online lending space “with a safe and secure way to confirm loan ownership and collateral interests across companies within the ecosystem,” the company says.
While New York-based GDR is focused on secure data chains for consumer lending, the company is actively pursuing the SME space as well, says President Charlie Moore.
“It’s going to be on our radar all this year,” he says. “Most of our clients in the investment community are also involved in SME so that’s definitely the next priority for us. Later this year we’ll have an announcement. We’re the only one applying the technology in this space. We are the furthest along.”
GDR’s technology provides an audit trail and a single, consistent source of core loan data, enabling investors to manage underlying loan data and ensure validation of their portfolios with greater confidence.
“We are excited to be driving the technological innovation of blockchain, bringing new value to the world of online lending,” Moore says. “By harnessing blockchain capabilities and applying them to our collateral pledge management and asset validation tools, we are able to deliver new levels of confidence and certitude to our partners in the investor ecosystem.”
Although announced as a proof-of-concept, GDR clients can use the technology now, Moore says. “Adoption across the nodes is the key driver for the full value to be realized,” he says. “It’s important to understand what the industry is using so if investment banks start leaning to one platform we are ready. I think we’re going to see this over the next 24 months and we’ll be in a good position to focus on one specific platform. This is still a relatively early stage and we’re all looking to see how the broader technology is adopted across the industry.”
The whole concept of blockchain lends itself to the lending ecosystem and the need for consistent, trusted information feeding that ecosystem. “There’s a lot of different processes involved in issuing a loan and everyone needs to have confidence the data they’re dealing with is accurate,” Moore says. “Having that certainty from an immutable record consistent with the entire ecosystem creates efficiency and should attract more of the right capital to grow.”
Moore says GDR worked with three blockchain platforms — Hyperledger, Ethereum and Chain. The firm has also been participating in strategy development with the Wall Street Blockchain Alliance and Structured Finance Industry Group Blockchain Task Force, two organizations focused on increasing industry adoption of distributed ledger technology across financial markets.
Blockchain is “much more than a buzzword or an industry trend,” says GDR’s CTO Robert Brown. “Blockchain technology is ideally suited to the set of solutions we offer clients – it enables our clients to have an immutable, consistent view of the state of a loan across its entire lifetime, thereby increasing trust and certainty around lending activity. As blockchain technology matures and standards are created, we look forward to playing a lead role to represent the investment community in this new asset class and enable future value creation through the use of smart contracts.”
GDR’s blockchain POC development follows recent partnerships with TransUnion, Equifax, IDAnalytics, Avant and Prosper. Earlier this year, GDR was also named “Best Business Lending Product” at the FinTech Breakthrough Awards.
Morgan Stanley predicts online loan volume in the US market will reach $120 billion in 2020, a six-fold increase from 2015. Technology is the driving factor in this growth. One important promise of FinTech is that there will be greater reliance on algorithmically-determined financial decisions in areas such as loan, insurance and stock picking. Although humans have the advantage in intuitive and creative thinking, machines are better – and faster – at weaving through the data and finding hidden connections among different variables. [read more: South China Morning Post]
Rubique, an online marketplace for financial products, has raised $3 million in a bridge round from existing investor Kalaari Capital and Udayan Goyal, managing partner at Apis Partners, a company spokesperson told VCCircle. Run by Bestdealfinance.com, Rubique is a credit facilitator for SMEs and individuals. In the SME segment, it focuses on loans for commercial vehicles and construction equipment. [read more: VC Circle]
Equities research analysts expect LendingClub (NYSE:LC) will announce sales of $134.75 million for the current fiscal quarter, according to Zacks Investment Research. LendingClub reported sales of $102.39 million during the same quarter last year. If brokerages are on target, the company will show a positive year-over-year growth rate of 31.6%. LendingClub’s next earnings report is set for Aug. 14. [read more: American Banking News]
Dallas-based factoring company American Receivable Corp. says it has reached 100 bank relationships nationwide. In business since 1978, American Receivable has been ranked the #1 Factoring Company in America by Top 10 Reviews for three consecutive years. [read more: Press Release]
Business development company Fidus Investment Corp. (NASDAQ:FDUS) has priced an underwritten public offering of 1.75 million 000 shares of its common stock, with an eye toward raising $28 million. Proceeds will be used for investments in lower- to middle-market companies, and to retires its existing credit facility, the company said. [read more: Press Release]
Digital lending platform Stashfin, operated by Delhi-based EQX Internet Capital Advisors says it has raised $5 million in a pre-Series A round of funding. Investors include Kirloskar Group’s venture capital arm, Snow Leopard Ventures, and Singapore-based Alto Partners and GrowX Ventures, the startup said in a statement. [read more: VC Circle]
The £406m Funding Circle SME Income fund has paid out its fifth dividend, the fourth consecutive quarter at the same 1.625p level, holding pay-outs in line with targets. [read more: AltFi]
Shares of Esquire Financial Holdings, a Jericho, NY, bank holding company that makes loans to law firms and small businesses, popped Tuesday morning in trading after its $33.1 million initial public offering on the Nasdaq Capital Market. Esquire had priced its IPO at $14 per share, the lower end of its previously announced range of $14 to $16. Shares were up nearly 8 percent to $15.10 in early afternoon trading. [read more: Newsday]