- Today’s main news: SmartBiz Loans ranked No. 1 among SBA7(a) loans under $ 350K. Orchard Platform partners with Sandler O’Neill. MoneyLion raises $ 22.5M
- Today’s main analysis: How China’s offshore bond market is changing fast.
- Today’s thought-provoking articles: How people become nonprime. IPF shines light on RECF. Morgan Stanley, Origin Capital sign deal.
- SmartBiz Loans ranked No. 1 among SBA7(a) loans under $ 350K. AT: “This is a boon for this market. It adds an extra layer of legitimacy for technology in the realm of finance.”
- Orchard Platform partners with Sandler O’Neill. AT: “Here’s another partnership with a traditional (investment) bank, which I believe will be the trend for 2017, and is a win-win for traditional banks and technology-based financial services.”
- How do people become nonprime? AT: “The gist here is that MPLs should pay as much attention to the nonprime market as traditional banks. While this market may present a higher risk, there is also a tremendous opportunity to service this market. But lenders must understand it first.”
- MoneyLion secures $ 22.5M in Series A equity funding . GP:”Raising a series A of $22.5 mil in fintech right now is a nice accomplishment. Well done. Combined with their existing $650 million debt facility, this should put them on the map to reach $1bil in the next few years in origination.”
- RealtyShares completes initial close of diversified marketplace equity fund.
- Money360 close $1.9M permanent loan for Ohio property.
- Betterment tries to influence president-elect to keep DOL rule. AT: “The rise of Donald Trump to the most powerful office in the world has produced a ripple of fear in alternative lending circles that the president-elect will be more favorable toward traditional financial institutions. This could lead to other alternative financial services companies attempting to influence the president-elect on matters of regulation, legislation, and other financial services issues.”
- The Fed outlines approach to monitor FinTech. AT: “This is mostly about the blockchain, but it is worth paying attention to in light of the growing trend in MPL-bank partnerships as well as traditional bank interest in the public ledger.”
- LendingUSA appoints Manoj Mathew as CTO.
- Trump education secretary appointment invests indirectly in SoFi. GP:” They are LP investors in a VC who was an early equity investor in SoFi. In other words: I don’t think there is anything real here. It’s similar to buying into a mutual fund and the fund investing in some company interesting company.”
- IPF shines light on real estate crowd funding (RECF). AT: “The big takeaway here is the size of RECF proportional to crowdfunding overall. It is considerably larger in the UK than anywhere else.”
- FCA authorizes LandlordInvest. GP:” As the FCA is very slow to authorize new companies in this space, a new authorization is great news. However, the application pipeline is still 40+ companies deep. ” AT: “Look for more competition in this space.”
- Denheath Desserts reaches $300,000 crowdlending target. GP:” Looking around the kitchen and wondering what else can we crowdfund ?”
- Growth Street accepts retail investors. GP:” Growth Street is now a FCA registered Appointed Representative. Another FCA authorization.”
- Morgan Stanley signs deal with Origin Capital. AT: “This is a big deal. It could boost the alternative finance sector in the Republic of Ireland and might have a small effect on post-Brexit concerns in the UK, but not much.”
- Charts show how offshore bond market is changing. GP:” Most interesting it is shrinking after 5 years of growth. The A tranch is the main culprit. A B tranch appeared. Is the Chinese credit market deteriorating ?”
- Women in photo leak mostly college students from small cities.
- United States
- SmartBiz Loans Ranked Number One Provider of Traditional SBA 7(a) Loans Under $ 350,000 (Yahoo! Sports), Rated: AAA
- Sandler O’Neill to Partner with Orchard Platform to Provide Banking Clients with Online Lending Market Data and Analytics (Orchard Platform Email), Rated: AAA
- How Do People Become Nonprime? (Yahoo! Finance), Rated: AAA
- MoneyLion Secures $ 22.5 Million in Series A Funding Led by Edison Partners (BusinessWire), Rated: A
- RealtyShares Completes an Initial Close of Their Diversified Marketplace Equity Fund (Yahoo! Sports), Rated: A
- Money360 Closes $ 1.9 Million Permanent Loan for Ohio Property (Marketwired), Rated: A
- Betterment presses Trump to keep DOL rule (Fiduciary Focus), Rated: A
- Fed Outlines Approach to Monitoring Fintech (The Wall Street Journal), Rated: A
- LendingUSA Appoints Manoj Mathew as its New Chief Technology Officer (Yahoo! Sports), Rated: B
- Trump Education Secretary Pick Has Indirect Stake in Student Lender (The Wall Street Journal), Rated: B
- United Kingdom
- IPF report shines light on real estate crowdfunding (Property Week), Rated: AAA
- FCA authorises peer-to-peer bridging lender (Bridging&Commercial), Rated: AAA
- Denheath Desserts Surpasses $ 300,000 Funding Target During PledgeMe Crowdlending Campaign (Crowdfund Insider), Rated: A
- Growth Street Will Now Accept Retail Investors on P2P Platform (Crowdfund Insider), Rated: A
- European Union
- Morgan Stanley in Origin loan push (The Times), Rated: AAA
- These Charts Show How One Part of China’s Offshore Bond Market Is Changing Fast (Bloomberg), Rated: AAA
- Women in viral loan receipt nude pics mostly college students in small cities (Global Times), Rated: A
- Cradle’s private investment fund grows to RM190.2 mln (The Borneo Post), Rated: AAA
- Global participation banking assets reached US $ 924 billion in 2015: EY (Zawya), Rated: A
SmartBiz Loans Ranked Number One Provider of Traditional SBA 7(a) Loans Under $ 350,000 (Yahoo! Sports), Rated: AAA
SmartBiz Loans, the first SBA marketplace and bank-enabling technology platform, has ranked as the number one provider of non-Express, SBA 7(a) loans under $350,000 for the 2016 government fiscal year. SmartBiz also ranked number five among providers of under $350,000 traditional SBA 7(a) and Express 7(a) loans combined.
SmartBiz generated $200 million in funded SBA 7(a) loans through its bank lending partners, which helped them earn the top spot. The data used is based on SBA lending data released in November, reflecting its 2016 fiscal year which ended on Sept. 30. Wells Fargo Bank, which was ranked just below SmartBiz, generated $155 million in funded non-Express SBA 7(a) loans under $350,000. This is the first time a technology platform and marketplace has achieved the number one position in SBA’s ranking of 7(a) loans.
Sandler O’Neill to Partner with Orchard Platform to Provide Banking Clients with Online Lending Market Data and Analytics (Orchard Platform Email), Rated: AAA
Orchard Platform, the technology and data provider for the online lending space, today announced that it has entered into an agreement with Sandler O’Neill + Partners, L.P., a full-service investment banking firm and broker-dealer focused on the financial services sector. Under the terms of the agreement, Sandler O’Neill will make Orchard’s full suite of products and services available to its broad group of bank and specialty finance relationships.
Orchard provides an integrated platform that empowers online loan originators and investors with access to a variety of web-enabled tools, including market data, benchmarking, investor reporting, portfolio analytics, and cash flow simulators, as well as capital markets software. Recently, banks have announced a variety of partnerships with fintech companies. By working together, Orchard and Sandler O’Neill will enable a broad range of depository institutions and specialty finance companies to evaluate and monitor the many opportunities in the online lending market today.
“Over the last 28 years, Sandler O’Neill has forged strong relationships with community banks, thrifts, and similar financial institutions by keeping them abreast of unique, compelling investment opportunities and innovative products to help them evaluate those opportunities,” said Jon Doyle, Senior Managing Principal of Sandler O’Neill. “We are excited to have the opportunity to offer our clients Orchard’s industry expertise and suite of products, which will provide them with an efficient way of evaluating the various methods of participating in online lending.”
How Do People Become Nonprime? (Yahoo! Finance), Rated: AAA
Nonprime Americans are more likely to see their incomes fluctuate, have more people living in their households, and are more often focused on short-term financial planning than their prime counterparts, according to research released today by Elevate’s Center for the New Middle Class.
This latest study focuses on the factors that may lead to – or originate from – being nonprime in America, defined as having a credit score below 700. The Center concluded that one in three nonprime Americans experienced an income change by at least 25% within the last 12 months. Additional key findings include:
- More than half of nonprime Americans report some month-to-month income volatility within the last 12 months
- They also have more people in their households; nonprime Americans are 20% more likely to have three or more people in their households
- They are almost twice as likely to have elderly parents in their households than prime
- They are more than twice as likely (58% vs. 27%) to be focused on short-term financial matters than long-term ones
- Nonprime Americans say they can go only four months with a drop in income vs. the eight months that prime respondents say they can go
- Nonprime Americans are more likely than prime to have slipped on the economic ladder; one in three say they are worse off than when they grew up
“It’s important that policymakers, consumer advocates, media, academics and the public at large understand this group of consumers to help determine what will best serve their needs,” continued Walker. “Our hope, through research, is to shed light on unmet financial needs of The New Middle Class and provide thoughtful insights for everyone engaged.”
MoneyLion Secures $ 22.5 Million in Series A Funding Led by Edison Partners (BusinessWire), Rated: A
MoneyLion, the mobile personal finance platform that leverages machine learning analytics to enable smarter tools and credit products, today announced $22.5 million in Series A funding led by Edison Partners. The Series A financings, together with $650 million in existing debt facilities, will fuel MoneyLion’s growth and significantly expand its lending capacity. Existing investors, including FinTech Collective, Citizen.VC, Clocktower Ventures, Broadhaven Capital Partners, Montage Ventures, and prominent individual investors from the finance and technology industries, also participated in the funding round.
MoneyLion’s approach is unique in the $800 billion consumer lending industry. Personalized for each user, MoneyLion’s mobile app simplifies personal financial management, providing a single place to track spending, savings, and credit. At the heart of MoneyLion’s platform are analytical models that power recommendations to help users achieve their financial goals, ranging from building savings, improving credit health, or managing an unexpected expense with a personal loan.
MoneyLion’s loan business has been growing three-fold year-over-year in originations and volume, with over 150,000 loans originated. MoneyLion will deploy the funds from the equity round to continue investing in the technology and talent that will help the firm grow in new and existing markets.
RealtyShares Completes an Initial Close of Their Diversified Marketplace Equity Fund (Yahoo! Sports), Rated: A
RealtyShares, a leading online marketplace for real estate crowdfunding, announced today that it has closed the initial round of a first-of-its-kind diversified marketplace equity fund. The unique fund should enable investors to access a diverse portfolio of real estate investments through a single contribution.
Managed by a team of experienced real estate investment managers, this fund was created for qualified investors and institutional partners, offering the opportunity to efficiently invest in middle market real estate. Each investment is to be a part of a portfolio of 10 to 20 properties selected by RealtyShares’ team of experts. Investors can also benefit from depreciation tax benefits, a feature that can be favorable to investors looking to reduce their taxable passive income.
The fund is mandated to invest in middle market real estate transactions that are typically $50 million and smaller, encompassing deals in opportunistic pockets within primary markets (e.g. San Francisco East Bay Area) and compelling secondary markets (e.g. Austin, Texas). The RealtyShares team intends to focus investments on value-add multifamily and commercial projects in Arizona, California, Florida, Illinois, New York, North Carolina, Texas and Virginia.
Money360 Closes $ 1.9 Million Permanent Loan for Ohio Property (Marketwired), Rated: A
Money360, the leading commercial real estate marketplace lending platform, announced today that it has provided financing for a single-tenant retail building located in Dayton, Ohio.
The building, which is currently 100 percent leased to Panera Bread, is located next to the Dayton Mall and within a heavily retail-based area with tenants such as Sears, Macy’s, J.C. Penney, DSW, Office Depot, Best Buy and TJ Maxx, among others.
The $1.9 million permanent loan allowed the borrower to recoup capital previously utilized in the acquisition of the property. Additionally, the longer loan term and prepayment structure outlined in the deal provided necessary flexibility in the financing.
The recourse loan is fixed for five years at an interest rate of 4.500%, utilizing a 25-year amortization schedule and a declining pre-payment penalty.
Betterment presses Trump to keep DOL rule (Fiduciary Focus), Rated: A
Robo-adviser Betterment is reaching out to President-elect Donald Trump to keep him from gutting the Labor Department’s fiduciary rule for retirement advice.
It ran a full-page ad in Monday’s Wall Street Journal directing Mr. Trump to “stand on the side of America’s 75 million retirement savers, not the firms with deep pockets who are lobbying” to protect their interests.
Fed Outlines Approach to Monitoring Fintech (The Wall Street Journal), Rated: A
The Federal Reserve offered early clues Monday on how it plans to monitor financial innovations such as blockchain when it published a long-awaited research paper on fintech.
The Fed said the long-term impact of the technology remains unclear, urging more study on the potential risks and rewards for financial markets.
While the U.S. central bank has no direct authority over companies operating in the rapidly evolving arena of financial technology, it regulates the flow of cash through electronic payment systems that banks use to move money and is scrutinizing the new technologies’ connections to banks.
The Fed’s research document contained no firm policy conclusions, but the central bank has been visiting fintech startups to ask about their business models and is looking to shape regulatory and industry discussions, according to people familiar with the talks.
The Fed also is probing the decisions banks make after engaging with fintech startups and assessing any potential for fraud, money laundering or collusion in the chain, these people added.
LendingUSA Appoints Manoj Mathew as its New Chief Technology Officer (Yahoo! Sports), Rated: B
LendingUSA, a leading provider of point of sale financing solutions, has announced Manoj Mathew as its new Chief Technology Officer.
His previous experience includes being the co-founder and Chief Technology Officer of LendFoundry, a fintech accelerator platform for marketplace lending. He was also a co-founder and senior executive at Sigma Infosolutions, a leader in business and IT solutions for both large and small enterprises. During his time at Sigma, he was instrumental in the design and architecture of the origination platform for loanDepot, QuickBridge and the servicing system deployed for Rocketloans.
Trump Education Secretary Pick Has Indirect Stake in Student Lender (The Wall Street Journal), Rated: B
Betsy DeVos, tapped by President-elect Donald Trump to run the U.S. Department of Education, is an indirect investor in online-lending company Social Finance Inc., a startup whose fortunes hinge in part on policies crafted by the department Ms. DeVos would run.
Ms. DeVos and her husband Dick DeVos are investors in RPM Ventures, an Ann Arbor, Mich.-based venture-capital firm that was one of SoFi’s earliest backers, according to the firms’ websites.
IPF report shines light on real estate crowdfunding (Property Week), Rated: AAA
In 2015, property debt and equity crowdfunding totalled $7.8bn, whereas there was $760bn invested in commercial real estate.
Real estate accounts for 5% or less of the crowdfunding markets in China and the US but it accounts for more than 20% in the UK.
The UK real estate crowdfunding market is heavily weighted towards debt, which accounts for 88% of activity. At $0.93bn, debt crowdfunding represented about 1% of all lending in the wider UK commercial real estate market in 2015.
FCA authorises peer-to-peer bridging lender (Bridging&Commercial), Rated: AAA
The buy-to-let (BTL) and bridging loans marketplace was granted regulatory approval following a 24-month application process.
LandlordInvest has now applied to HM Revenue & Customs to become an Isa manager capable of offering the Innovative Finance Individual Savings Account (IFIsa).
Only firms authorised by both regulators are permitted to offer the IFIsa product.
LandlordInvest expects to receive a green light from HMRC over the next few weeks and, if granted, will offer the IFIsa directly through its lending platform.
The firm will be looking to offer tax-free returns between 5-10% per annum.
Denheath Desserts Surpasses $ 300,000 Funding Target During PledgeMe Crowdlending Campaign (Crowdfund Insider), Rated: A
Denheath Desserts, a custard square brand from South Canterbury, has successfully secured its initial $300,000 funding target through its crowdlending campaign on PledgeMe. The company launched the initiative in late October, seeking a max of $1.2 million to accelerate its self-proclaimed “World Custard Invasion,” grow distribution and New Zealand, and start expansion plans in Hong Kong, Singapore, and New York City.
Growth Street Will Now Accept Retail Investors on P2P Platform (Crowdfund Insider), Rated: A
Growth Street is now an FCA registered Appointed Representative. Growth Street will now be able to accept individual investors on its peer to peer lending platform. By expanding the range of investors, Growth Street seeks to provide more businesses with a GrowthLine, its business overdraft alternative. Growth Street has partnered with Resolution Compliance to expand its activities but stated it would continue with its own direct application with the FCA.
Morgan Stanley in Origin loan push (The Times), Rated: AAA
Origin Capital, a Dublin non-bank lender, has signed a funding deal with Morgan Stanley to offer finance to the Irish commercial property market.
The partnership with one of the world’s largest investment banks is expected to target the refinancing of the tens of billions’ worth of commercial property loans purchased by investment funds such as Cerberus and Lone Star from Irish banks and Nama.
Origin will act as an origination platform for Morgan Stanley. Apart from refinancing property loans out of the so-called vulture funds, chief executive Ross Metcalfe said Origin also expected to finance companies, currently leasing, to buy properties.
These Charts Show How One Part of China’s Offshore Bond Market Is Changing Fast (Bloomberg), Rated: AAA
City-level borrowers are storming China’s international bond market.
The urban encroachment means that the country’s offshore bond market is moving down the credit ratings spectrum with a greater proportion of new issuance coming from junk-rated financing arms, according to data from CreditSights Inc.
City-level entities are less likely to garner investment-grade ratings due to their reliance on mere “implicit” support from the Chinese government. That means the share of junk-rated issuance has risen to 11 percent year-to-date from none in 2015, according to CreditSights.
This deterioration in the credit quality of bond issuers comes amid Beijing’s step-up in its efforts against central government support for local governments. China announced a contingency plan last month, ordering local authorities to repay their own debt and reiterating that Beijing won’t bail out regional governments.
Women in viral loan receipt nude pics mostly college students in small cities (Global Times), Rated: A
Women who used now-leaked nude pictures and intimate videos of themselves as collateral for online lending platforms are mostly college students, though the oldest is 47 years old, news site thepaper.cn reported on Monday.
Of the 161 women whose pictures and videos have spread online since November 30, the personal information of 144 has also been exposed, showing that around two-thirds are college students.
Most of the users are from third- or fourth-tier cities and live in villages. Less than 5 percent of them are from first-tier cities, said thepaper.cn.
Cradle’s private investment fund grows to RM190.2 mln (The Borneo Post), Rated: AAA
Cradle Fund Sdn Bhd (Cradle) is on track to drive more private investment participation to boost the ecosystem for Malaysian technology startups with co-investment funds of RM190.2 million, up from RM161.2 million as of June this year.
Chief executive officer, Nazrin Hassan, said the co-investment programme was one of the company’s efforts to help reduce government-linked companies’ dependence on government funding.
Cradle yesterday signed partnership agreements with RHL Ventures, TinkBig Venture, Biz Angel Network, EIX Group, Segnel Ventures and PlatCom Ventures, which will take part to fund Malaysian startups totalling RM14.5 million.
With the new partners on board, the number of partners has grown to 32 with total committed funds of RM190.2 million.
Global participation banking assets reached US $ 924 billion in 2015: EY (Zawya), Rated: A
The GCC region’s share of participation banking increased to 72%, as the size of assets in the Association of Southeast Asian Nations (ASEAN) countries declined during 2015.
Saudi Arabia, the UAE and Malaysia are the three largest participation banking markets, in terms of assets, representing 34.2%, 17.2%, 13.3% of the global market share respectively.
In the GCC region, FinTech innovations have the ability to enhance market access and profitability of banks, dramatically. A starting point for participation banks is to activate a bold strategy for the finance function – inclusive of advanced data analytics, robotic process automation, the cloud, artificial intelligence and block-chain.
Some of the key areas of FinTech innovations that are relevant for participation banks include: SME and peer-to-peer lending platforms, payment related innovations such as person-to-person payments, digital authentication and digital wealth management.
If banks were to consolidate with Fintech companies, it could propel participation banks to become mainstream across 20 promising markets by 2021, up from five markets today, representing a jump from 100 million customers to 250 million customers over the same period.
Digital-only banking could become a significant client segment for participation banks. There is a case for participation banks to evaluate collaborative ventures with FinTech firms to launch digital-only banks in their respective countries.