Fundation Group Appoints Barry Feierstein as Chief Operating Officer
Addition of COO Reflects Company’s Continued Growth & Optimism
New York, NY & Reston, VA – Jan. 11, 2016 – Fundation Group LLC, a leading online direct lender to small businesses, today announced the appointment of Barry Feierstein to the newly created position of Chief Operating Officer (COO). Feierstein will report to Fundation’s CEO, Sam Graziano, and will be responsible for overseeing multiple aspects of the business including: marketing, business development, lending operations, servicing and administration.
Mr. Feierstein is a highly experienced senior executive having spent more than 25 years operating in both financial and non-financial businesses. Prior to joining Fundation, he held executive roles with Apollo Education Group including Chief Commercial Officer and Chief Business Operating Officer. Prior to Apollo, he served as Executive Vice President of Sales & Marketing at Sallie Mae, Inc., reporting to the CEO. Among his responsibilities was the generation of over $26 billion in annual federal and private loan origination volume. Earlier in his career, Mr. Feierstein worked as a management consultant with McKinsey & Company. He holds a B.A. degree from Tufts University and an MBA from Harvard Business School.
Commenting on the appointment, CEO Sam Graziano said Fundation will leverage Mr. Feierstein’s extensive experience in business development, marketing, operations and strategy at a time of rapid growth for the company and rapid evolution of the industry. “We’re extremely bullish on our prospects for 2016 and beyond, and adding a high-caliber, experienced executive like Barry further increases my sense of confidence and optimism about our future,” said Graziano, noting that Fundation’s growth will continue to be fueled by additional partnerships with banks and through other targeted strategic channels.
“I’m excited to be joining Fundation, a dynamic company that is positioning itself as a leading strategic partner to banks and other institutions that serve the financing needs of the SMB market,” noted Mr. Feierstein, “I look forward to joining Sam and the executive team and helping drive Fundation forward as it continues to expand its products offerings and customer base.”
About Fundation
Fundation is a leading online direct lender, providing small businesses with a simple and efficient online borrowing experience that leverages technology to streamline the collection of customer data, expedite the application process and offer customers unprecedented transparency. The company offers conventional term loans to small businesses nationwide for working capital, growth and expansion. The company also develops strategic partnerships that include technology and other service solutions with banks and other large-scale service providers to the small business market. Visit http://5kb.f76.myftpupload.com for more information.
A “Meaningful” Platform-Bank Partnership?
By Ryan Weeks on 6th January 2016
Could Fundation’s recent tie up with Regions Bank be the most impactful on the block?
We’ve seen a fair degree of platform-bank interaction lately – most of it taking place within the small business lending space. The partnership between OnDeck and JPMorgan Chase has garnered perhaps the greatest attention in the press. Under the pilot scheme, Chase – the largest US bank by deposits – will write loans to its c. 4m small business customers using OnDeck’s technology platform and innovative credit scoring capabilities. But the loans will carry Chase branding.
In the UK, we’ve seen the likes of RBS buddy up with peer-to-peer operators Funding Circle and Assetz Capital. These relationships essentially pre-empt the government’s mandatory referral scheme. The high street bank has committed to signposting those SME customers that it cannot work with towards the Funding Circle and Assetz Capital platforms. But for all the bluster, we’re yet to receive detail about how much business is actually being written as a direct result of bank referral.
Direct small business lending platform Fundation tells us that it’s seen quite the uptick in business since joining forces with Regions Bank in early October 2015. To hear CEO Sam Graziano tell it, the Regions deal stands out from the pack as the sole instance of meaningful platform-bank “integration”. Small businesses are able to access Fundation loans directly, via the Regions.com site. Regions’ suite of products sits alongside the Fundation loan option, and the site is co-branded.
Joe DiNicolantonio, head of Regions Business Banking, offered his take:
This unique agreement with Fundation allows Regions Bank to expand loan product offerings and method of delivery for small businesses while also cultivating long-term revenue and loan growth opportunities.”
Regions is a powerful ally, with around $122 billion in assets. The bank provides services ranging from consumer and commercial banking, to mortgages, to insurance products. But in spite of the bank’s clout – and you’d imagine that it must carry a fair bit into negotiations with an upstart online lender – Regions has not shied away from making plain its association with the Fundation platform. Indeed, when selecting the option of a Fundation loan via the Regions.com website, users are confronted with a message which states: "You are leaving Regions and entering an external site". Unabashed referral? Surely not! And although we're lacking hard numbers, the partnership already appears to be paying dividends. Said Graziano:
"It's still early, but we are very pleased with progress as volume is growing rapidly month over month."
Big Banks Embrace Small Lenders Rather Than Compete Against Them
By Peter Rudegeair, Ruth Simon and Emily Glazer
J.P. Morgan Chase & Co.’s decision to tap On Deck Capital Inc. to create an online small business loan for its customers is the clearest sign yet that large banks are choosing the path of embracing up-and-coming lenders rather than facing off against them.
Other banks are also turning to upstarts to boost small business lending. This fall, Regions Financial Corp. partnered with online lender Fundation Group LLC, in part because of its transparent terms. Annual percentage rates on Fundation loans top out at 30%.
Some of these partnerships have been in place much longer. A Wells Fargo & Co. unit that processes credit-card payments for merchants has had an arrangement with CAN Capital Inc. for the past five years in which customers who were declined a bank loan are referred to the online lender.
“We are in discussions about ways to expand the program” with Wells and in talks with “several others,” said CAN Capital chief executive Daniel DeMeo. “There’s a lot more curiosity over the last six months than there had been previously.”
Small-business lending is a natural place for banks to start collaborating with newcomers from Silicon Valley given the amount of ground that they have lost since the financial crisis. Ten of the largest banks offering small loans to businesses extended $44.7 billion in credit in 2014, down 38% from their 2006 volume.
“Every major bank is working on this,” said John Barlow, president of Barlow Research. “This is really just the beginning of a re-engineering of the entire small-business lending process.”
But not every bank will end up enlisting outside help. For instance, Bank of America Corp has no plans to partner with online or alternative lenders in part because of potential dings to its reputation, chief executive Brian Moynihan has told analysts.
In the case of OnDeck, J.P. Morgan determined that OnDeck’s technology, specifically the coding, and compliance operations were reliable and scalable. Its management also had a longer track record than competitors. The bank’s retail chief Gordon Smith and CEO Jamie Dimon were both involved. Mr. Dimon hastened the announcement of the partnership earlier this month when he referred to it indirectly at a conference hosted by the U.S. Treasury.
Many of the details are still under way. J.P. Morgan is planning to begin the partnership in select cities next year before launching in full, a person familiar with the matter said, adding that markets have not yet been chosen. J.P. Morgan will integrate OnDeck’s technology into its checking-account website in order to offer loans to pre-screened borrowers, but the bank is keeping its partner’s name off of the product.
That contrasts with a similar type of loan that OnDeck developed earlier this year for small businesses that use Intuit Inc.'s accounting software. That product, which synced to businesses’ Quickbooks accounts and provided them with quick access to credit lines, was branded as being “powered by OnDeck.”
Meanwhile, Regions decided to put a link to Fundation’s online application on the bank’s website and co-brand the arrangement.
“The product is very simple and easy to understand,” said Joe DiNicolantonio, head of Regions’s business banking group. “We want to make sure our partner is lending in a very responsible and fair way to our customers.”