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The 2017 wave of Lending Fintechs: Alt Lending 3.0

PitchIt 2017 finalists

The PitchIt startup awards is one of the best and most exciting parts of the LendIt conference. This year, there were eight finalist competitors who met in front of hundreds of investors to pitch. Four judges picked the ultimate winner, Nova. Below are the profiles of Nova and the seven other PitchIt finalists.

Nova – Credit History for Immigrants

Nova is the world’s first cross-border credit agency. Many immigrants come to the United States with no credit history. They may come from a place where credit is not an option. In many countries of the world, banks do not issue credit cards. There may not even be many, if any at all, banks. Merchants do not offer purchases on credit, so when these immigrants land on U.S. soil, their ability to interact with the economy is limited by the options they had in their native countries. Nova solves that problem.

It started as a research project at Stanford University. U.S. property managers run credit and background checks on applicants to screen for potential risks when leasing or renting housing units. Those checks typically do not include overseas credit checks. With Nova, property managers have that ability. Not only can U.S. landlords check overseas credit, but they can also report negative actions so that the credit report is affected in the applicant’s home country.

Lenders can use Nova to check the credit history of applicants that come from non-U.S. countries. While many countries around the world do not have FICO scores and credit bureaus, that does not mean citizens of those countries do not have credit histories. Nova gains access to those histories.

Aella Credit – Instant Credit for Africans

Aella Credit’s focus is on Africa where employed workers may or may not have access to credit. Through Aella, employees can access alternative credit solutions through their employers.

Companies register on the Aella Credit platform and give the company access to employee records. Through an API call, Aella Credit can loan money to employees who access the platfom through their mobile phones. In most cases, they can have access to much-needed cash at low interest rates in a couple of minutes. They pay back the loans in payroll deductions authorized during the application process. Over time, their credit improves as Aella Credit reports their payment history to the credit bureaus.

Investors make loans and are almost guaranteed payment due to the payroll deduction process. Also, the default rate is low for the same reason. Everyone wins.

Alloy – Verifying Identities

Identity verification has been a major issue for many people and companies in recent history. As the world grows more and more digitized, identity verification will become an even bigger concern. Alloy makes the process seamless.

Through an API call, Alloy verifies identity by checking multiple sources of information. Using financial technology for financial service companies that want to fight fraud, they are able to verify identities quickly and accurately to prevent loss due to fraud and dissatisfaction.

Float – Providing Access to Credit Quickly and Easily

Float‘s mission is very simple and straightforward. It’s a mobile app that allows people to apply for a line of credit and be approved in just a few minutes—as in, under five. The money being loaned is sent directly to the app and the borrower can use that money from the app. In other words, it’s digital currency.

Instead of using FICO scores, the company bases the amount of credit on what they believe the applicant can afford. Credit lines begin at $50 and go up to $1,000, amounts that no bank would touch. Another anomaly is the payback plan. Whatever applicants borrow must be paid back by the 21st of the following month. Therefore, it’s more like a payday loan than a traditional line of credit, but instead of standing in line in a seedy part of town, applicants can borrow money while sitting in their living rooms.

Qwil – Unlocking Contractor Earnings

As a freelance writer, I’ve experienced times when a slow payment made it difficult to get through the month. It’s an experience that every contractor in any kind of business has experienced. With Qwil, contractors can get through those difficult months without stress. Think of it as a cash flow plan based on the quality of your invoices.

When you invoice your clients—whether it be Net 30, Net 60, or Net 90—this is reflected in your Qwil account. Contractors simply cash out on future invoice earnings and go on about their business.

RealAtom – Helping Commercial Real Estate Borrowers Find The Right Lender

There is a lot of innovation going on in real estate lending right now. Commercial real estate is one area where could be a lot more improvement. RealAtom is here to fill in some of that gap. Their niche is helping borrowers find the right lender.

True the marketplace lending format, both borrowers and lenders sign up on the platform. Borrowers post their loan details and documents for review while lenders specify their applicant criteria. RealAtom makes the connection through the platform, matching lenders with borrower requests and borrowers with lender criteria. They deal in loan amounts from $100,000 to $100 million providing access to bridge, mezzanine, and long-term permanent loans. They’ll even work with loan brokers.

StackSource – Commercial Real Estate Lending

Another marketplace lending platform specializing in the commercial real estate lending space, StackSource allows project managers and real estate developers a way to access funding for their projects by giving them a place to upload their project details and find lenders willing to fund those projects. The basic service is free, but there is an upgrade option that allows developers to pitch their projects to more lenders for a fee. It’s only .3% of gross loan value, which is due at closing. That still beats those hefty broker fees.

WeTrust Platform – Providing a Trusted Lending Circle

WeTrust is an online ROSCA, which stands for Rotating Savings and Credit Association. It’s a simple idea that has caught on in several countries under different names, but it allows a group of people to pool their money together for a common purpose and reap the benefits together.

ROSCAs are peer-to-peer instruments that allow the members to use their pooled money to gain access to credit, make a purchase, fund a business, or whatever they agree upon. They contain all the benefits of insurance as well as credit instruments. Members earn interest on their pooled money, but members rotate the benefits so that not all of them gain access to the money in the pool at the same time. In other words, they rotate the shared benefits to distribute them fairly and evenly so that the entire membership wins.

WeTrust operates in India, Latin America, China, and the U.S. with plans to expand to other countries soon.

Author:

Allen Taylor
Allen Taylor

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Allen Taylor

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