Fundation Expands Small Business Lending

Businesses looking to take out a loan from a local community bank now have more options.

Online small business lender Fundation and BancAlliance, a network of community banks, have teamed up to expand access to loans for small businesses.

BancAlliance is a network of more than 200 community banks across 40 states.

Hook up with community banks
The program, developed by the 2 organizations, allows small businesses to use an online portal that will help guide them to the products that best meet their needs.

"This program will dramatically broaden the number of small business customers that can be served through the community bank system, and we are thrilled to be in a position to enable that," Sam Graziano, CEO of Fundation, said in a press release.

The program expands customer access to credit products for small businesses and reduces the inherent costs in small-business lending, the CEO said.

"Community bankers have frequently told us about the challenges of operating a small business lending operation in a cost-efficient manner, and this program will begin to change that dynamic," Brian Graham, manager for the BancAlliance network, said in a press release.

Fundation loans
Fundation offers conventional loans of $20,000 to $500,000.

The loan features include fixed-rate installments, with payments that are structured like a fixed-rate mortgage.

It also allows borrowing for short-term working capital needs and long-term borrowing up to 4 years.

Like personal loans, small business loans through the company require no specific collateral. You can prepay without any penalty, and small businesses have the option to apply for refinancing once a solid payment history is established.

Annual percentage rates range from 7.99% to 29.99%.

Eligibility
In order to be eligible for a loan through Fundation, you must be in business for at least 2 years, and have 3 employees, at least $100,000 in annual revenue and good personal credit.


Small Bank Consortium Strikes Deal to Offer Business Loans Online

by KEVIN WACK

More than 200 small banks across the country will be able to offer online loans to their small-business customers as part of a new partnership announced Tuesday.

Under the deal, community banks that are part of the BancAlliance consortium can refer customers who may not be the right fit for traditional bank financing to a website built with the online lender Fundation.

Ultimately, the loan may be funded either by New York-based Fundation or the partner bank. That determination will be made based on various factors, including the business owner's needs and creditworthiness.

For participating small banks, the idea is that improved efficiency will allow them to profit from smaller-dollar business loans that currently do not make economic sense.

"This program will dramatically broaden the number of small business customers that can be served through the community bank system," Fundation Chief Executive Sam Graziano said in a press release.Meanwhile, Fundation is expected to lend to many applicants who do not qualify for loans from participating banks. In those instances, the banks will get paid a referral fee.

The deal bears similarities to a consumer-lending partnership that BancAlliance and Lending Club announced in February 2015. Under that arrangement, some loans are funded by the participating banks, and others are financed by investors on the Lending Club platform.

Loans made through the Fundation partnership will be for $1 million or less, and they will not be principally secured by a piece of equipment or other hard collateral.
But beyond those broad parameters, it will be up to the participating banks to determine which products and terms they want to offer.

"Each bank gets to customize what it wants to provide to its customers," Brian Graham, the CEO of Alliance Partners, which manages the BancAlliance network, said in an interview.

Over time, additional lenders are expected to join the online portal. Those companies could include nonprofit lenders that specialize in microloans to newly formed businesses and firms that make loans backed by the Small Business Administration, according to Graham.

Fundation currently offers business loans between $20,000 and $500,000. The firm's loans have terms of one to four years, and they carry annual percentage rates of between 7.99% and 29.99%. Unlike some other online lenders, Fundation's loans do not have prepayment penalties.

Fundation, which was founded in November 2011, has made partnering with banks a key part of its strategy. In October it announced a partnership to make cobranded business loans with Regions Financial.


Community Bank Alliance Widens Silicon Valley Offerings

Companies in the BancAlliance, a network of more than 200 community banks, can now offer their customers two of Silicon Valley's latest commodities.

Digital lender Fundation Group LLC on March 1 announced a partnership with BancAlliance that would allow the consortium's members access to a Fundation software platform, continuing a trend of increasing partnershipsbetween banks and digital lenders. It is the second major partnership for BancAlliance, which last year launched a joint venture with LendingClub Corp. BancAlliance also offers a commercial loan program led by an affiliated asset manager, Alliance Partners, that sources and underwrites opportunities for member banks.

LendingClub's and Fundation's product offerings are discrete and separate, with LendingClub offering consumer loans and Fundation focused on small business loans. Both partnerships are "co-branded" meaning the consumer will see a product pitch from the bank with phrasing such as "powered by" the digital lender.

A key difference between LendingClub's and Fundation's partnerships with BancAlliance is scope.

"The biggest difference is the LendingClub partnership is utilizing much more of the LendingClub consumer lending model, whereas in this case Fundation is acting more as a software vendor," said Adam Hoehn, a director for BancAlliance.

However, Fundation is not purely a software provider. The company expects banks will also offer Fundation loans. For example, a customer could access the platform, enter the relevant details for a desired loan and receive offers from both the bank and Fundation.

CEO Sam Graziano said the platforms will be highly customizable among banks, so they could decide to not offer Fundation loans at all. Fundation loans are highly focused, targeting small business loans of less than $1 million that are not backed by collateral.

When talking about Fundation's role, Graziano mentions software vending first and nonbank financing second. And because when the company does fund loans it does so with its own balance sheet, he rejects the label of marketplace lender.

"Our strategy is to be the leading partner to the banking system," he said. "We're going to do that through customized, bespoke relationships with large banks and then we're going to do it for [smaller banks with] a more uniform, systematic approach like we're doing here with BancAlliance."

The company last year announced a partnership with Regions Financial Corp., and Graziano said the company would gladly custom design a new platform for any similarly sized banks. However, developing such custom sites for smaller community banks can be tough from a cost perspective, he said. The platforms available to BancAlliance members will be customizable for which products banks present but consistent enough that Fundation does not need to develop a new platform for each bank.

Eventually, Graziano said the BancAlliance platforms will offer new products over time, starting with other areas of need for small businesses such as loans guaranteed by the Small Business Administration. He said the platform would only offer one company per product offering.

"This is not going to be a competitive marketplace," Graziano said. "Any lender that gets added will need to meet a very high bar of their ability to be a material vendor of the banking system, and that's a very different bar than just participating in the nonbank finance market broadly."

Even if banks do not wish to offer Fundation products or any other third-party products, the platform collects and delivers data in a way that reduces underwriting costs, Graziano and BancAlliance's Hoehn said.

With the LendingClub partnership, BancAlliance members exclusively offer access to the LendingClub product, as opposed to offering other products, Hoehn said. Each community bank has initial access to invest in the loans their customers seek on the platform, but the loan is still originated by LendingClub's model.

LendingClub CEO Renaud Laplanche said the Fundation partnership was a welcome development and would not represent a competitive pressure since it had a different focus. While the BancAlliance-Fundation partnership just launched — meaning banks have yet to sign up — the joint venture with LendingClub was announced in February 2015. Neither Laplanche nor Hoehn were willing to offer numbers of banks who have signed up for the LendingClub partnership, but they said traction has been strong.

"We have new banks signing up every quarter. I'd say it's been a very successful partnership," Laplanche said, highlighting the marketing efficiency of using both LendingClub's brand and the bank's brand, similar to the Fundation partnership. "The LendingClub brand is all about innovation, being consumer friendly and portable. But it's new and a lot of people are not familiar with it. On the flipside, the bank's brand is very reassuring and familiar, so I think the combination of these two is very powerful."


An Online Lender `Disrupting' Banks? More Like Helping Out

  • Lending startup Fundation enters pact with more than 200 banks
  • Program aims to reduce `friction' in small-business lending

More than 200 U.S. banks are finding not every financial-technology startup is out to steal their business.

Fundation, an online lender founded 2011, announced a partnership Tuesday with BancAlliance, a network of community banks spanning 40 states. The deal has two parts: Banks get access to a Fundation platform that simplifies underwriting for small-business loans. Fundation, in turn, can offer credit to customers that don’t fit the banks’ borrowing criteria.

The arrangement echoes a deal BancAlliance reached with LendingClub Corp. last year to help community banks provide personal loans to their customers. At the time, that partnership showed Silicon Valley was starting to approach traditional lenders more amicably than some startups’ bank-bashing suggested.

Over the past few years, a growing number of new ventures have muscled into financial services. There are websites now where borrowers can get financing for small businesses, elective medical procedures, consolidation of credit-card and student-loan debts, and even to open a franchise restaurant.

Seeking Partners

Fundation has made a bank-friendly pitch central to its strategy. Last year, the startup struck a deal with Regions Financial Corp. to share technology and offer loans to borrowers that the bank doesn’t lend to.

“We really don’t emphasize, like so many companies in our market do, trying to disintermediate banks,” Fundation Chief Executive Officer Sam Graziano said in a phone interview. “We want to be the leading partner to the banking system.”

Others are pursuing a similar strategy. OnDeck Capital Inc. struck a deal with JPMorgan Chase & Co. late last year to speed up lending to small businesses. The online lender followed up that arrangement weeks later with a referral agreement with Commonwealth Bank of Australia, the continent’s largest lender.

The appeal of the latest Fundation pact is simple, said Brian Graham, CEO of Alliance Partners, the manager for the BancAlliance network. Most community lenders don’t have the technological resources to make certain segments of small-business lending economically viable.

“It costs the bank the same to underwrite a $500,000 loan as it does a $5 million loan,” he said in an interview. “Loans under $250,000, most banks lose money on.”

Setting Terms

Fundation’s main products are fixed-rate installment loans. Under the partnership, loans will be capped at $1 million. Specific terms and interest rates will be left to the partnering banks, Graham said. Whichever institution underwrites the debt keeps the servicing rights.

Partnering with Fundation won’t replace community banks’ normal due-diligence on borrowers, Graham said. But it will remove some of the “friction” in the process.

“This isn’t about automating everything,” Graham said. “In small business, in particular, you can't do $500,000 without talking to a person.”


BancAlliance and Fundation Form Partnership to Bring Small Business Lending Technology Solution to Community Banks

NEW YORK and CHEVY CHASE, Md., March 1, 2016 /PRNewswire/ -- BancAlliance, a network of more than 200 community banks across 40 states, and Fundation, an online small business direct lender, today announced a partnership that advances the small business lending capabilities of community banks and brings greater choice and simplicity to small businesses seeking credit from their local community bank.

The program includes the introduction of a new financial technology platform, developed and operated by BancAlliance and Fundation, allowing small businesses to access an online portal that will guide each small business customer to the products that best meet its unique needs.

The program will benefit community banks that participate by reducing the costs inherent in small business lending and expanding customer access to a competitive set of credit products offered by the community banks themselves and by Fundation. To maximize the choices available to small businesses throughout the country, BancAlliance and Fundation expect to invite to the program additional lenders that address the credit needs of small businesses outside the banks' and Fundation's capabilities.

The program is designed to allow each community bank to preserve a high level of control over customer experience, credit products offered to their customers and utilization of their balance sheet, directly or indirectly through Fundation.

BancAlliance is a collaborative network of community banks that empowers its members to access growth opportunities that might not otherwise be available to them and to serve their customers in new ways. Community bank members typically range from $100 million to $10 billion in assets. In aggregate, BancAlliance's member base would rank as the fourth-largest U.S. bank in branch count and 13th-largest in total assets.

Leslie Andersen, president and CEO of Bank of Bennington in Nebraska and a member of the BancAlliance Board of Directors, stated: "Small businesses need credit to grow and add jobs, and community banks are the best lenders to serve them but have struggled with the costs of building their own systems and processes. This BancAlliance program gives its community bank members access to the best and latest technology, freeing banks like mine to deliver for our customers and help our local economies thrive."

Brian Graham, CEO of Alliance Partners, the manager for the BancAlliance network, stated: "Community banks have historically been the bedrock on which so many small businesses have been built and flourished, and we are proud that this program will help to continue that tradition. Community bankers have frequently told us about the challenges of operating a small business lending operation in a cost-efficient manner, and this program will begin to change that dynamic."

Sam Graziano, CEO of Fundation, added: "Small businesses are so important to the economy and an extremely diverse market. They have demonstrated that they value the relationships they have with their bank, and continue to prefer to access financial products from their bank when possible. This program will dramatically broaden the number of small business customers that can be served through the community bank system, and we are thrilled to be in a position to enable that."

About BancAlliance
The BancAlliance network is a shared lending platform in service to its community bank members. Our mission is to enable our members, the banks that direct our activities, to prudently diversify into high-quality loans in a manner consistent with the highest commercial and regulatory standards—without changing the nature or mission of the traditional community bank. BancAlliance has member banks located throughout the country. Learn more at www.bancalliance.com.

About Alliance Partners
Alliance Partners is an asset-management and advisory firm focused on helping regulated financial institutions and other investors optimize their asset strategies and build more profitable and more balanced loan and investment portfolios. Learn more at www.alliancepartners.com.

About Fundation
Fundation is a leading online lender to businesses nationwide. Fundation partners with a broad array of financial and nonfinancial institutions that serve the small business market in a variety of capacities to bring value-added credit solutions. Fundation builds customized product offerings and delivery methods to meet the needs of each unique partner and the credit needs of its small commercial customers. Visit http://5kb.f76.myftpupload.com for more information.


Top 25 Financial Blogs for Small Businesses – 2016

Finance is one area of running a small business where it’s especially helpful to have expert guidance. In this article, we list and describe the top 25 financial blogs for small business owners. These blogs range broadly in focus and tone, but they all provide valuable, actionable tips for small business owners and entrepreneurs. We’ve categorized these financial blogs according to their primary area of focus–financing/loans, business credit, invoicing/cash flow management, and accounting/taxes.

Financing/Loans Blogs

Small Business Administration Blog

Primary Editor/Writer: Caron Beesley
Favorite Blog Post: How to Improve Your Chances of Getting a Loan With a Bulletproof P&L Statement

About the Blog: The SBA’s blog is a very valuable resource, certainly for SBA loan applicants but also for small business owners who are looking for other types of business loans. Writer Caron Beesley helps entrepreneurs who are just starting out in their search for business financing as well as more seasoned business owners who are looking for specific details. If you’re considering applying for an SBA loan, then this financial blog is a must-read as it covers the ins and outs of every SBA loan program and how to put together an SBA loan application.

U.S. Bank Connect

Primary Editor/Writer: U.S. Bank Small Business Team
Favorite Blog Post: 2015 U.S. Bank Annual Small Business Survey

About the Blog: U.S. Bank may be one of the largest banks in the United States, but their Connect blog shows that they ‘get’ Main Street small businesses. They conduct surveys and publish many statistics about small business owners’ access to credit, and they also do a great job explaining how trends such as rising interest rates affect you, the small business owner. With over 800 pieces of original and syndicated content, U.S. Bank writers focus on topics ranging from interest rates to cash flow management to invoicing.

American Express OPEN

Primary Editor/Writer: Rod Kurtz, Janean Chun, Michelle Court (editors) and Mike Michalowicz, Bruna Martinuzzi, Erika Napoletano, Rieva Lesonsky, Barry Moltz (writers)
Favorite Blog Post: The 5 Ways to Avoid Being Surprised by Taxes

About the Blog: The American Express OPEN blog is written by a group of financial experts who break down complex topics for small business owners. What we like is that they have a lot of articles that help small business owners be proactive about saving money, such as what to consider before refinancing or expanding your business to a second location. They also have a forum where you can ask questions or post comments about financing or other small business topics, and the writers or other readers can respond.

BPlans Blog

Primary Editor/Writer: Candice Landau (Managing Editor/Writer) and Briana Morgaine, Noah Parsons, and Tim Berry (Writers)
Favorite Blog Post: The 10 Best Side Business to Fund Your Startup (Plus One Unexpected Suggestion)

About the Blog: BPlans creates business plan software, so their primary focus is on helping startups get off the ground. They have a Starting a Business guide that covers how startups can bootstrap their businesses or pursue a variety of financing options. BPlans blog has articles targeted at different types of businesses, so you’re covered whether you’re a franchise, a non-profit, a home-based business, etc. Their articles are conveniently broken down into categories, such as “Getting Started,” “Loans and Grants,” and “Alternative Funding Resources,” so you can find exactly what you’re looking for.

Fundera Ledger

Primary Editor/Writer: Meredith Wood
Favorite Blog Post: Where to Find the Best Small Business Loans for Women

About the Blog: Fundera has a wide range of actionable financing advice for small business owners. Although most of their content is about loans, they also cover money saving tips for small businesses, invoicing advice, and tax and accounting advice. Fundera Ledger is one of the most prolific small business financial blogs out there, with multiple articles published almost every day.

Kabbage Blog

Primary Editor/Writer: Jeanna Barrett, Jess Harris, Maria Gianotti, and Stuart Morris (editors). The primary writers are a mix of 8-10 Kabbage staff writers.
Favorite Blog Post: Small Business Lending By the Numbers: Infographic

About the Blog: Kabbage is an online lender, and as expected, their blog offers a lot of helpful information on applying for a loan from an alternative lender. Their blog features a lot of infographics, data, and visuals on what traditional lending offers for small business owners vs. online lenders such as Kabbage.

Fuse Financial Partners

Primary Editor/Writer: David Worrell and the members of Fuse Financial Partners
Favorite Blog Post: Shark Tank Exposed: Why ABC’s Shark Investors are Unrealistic and Dangerous

About the Blog: David Worrell writes about a variety of financial topics in Fuse’s blog, but his main focus is on helping businesses raise money through loans and venture capital. He writes informative posts on topics that are probably on the minds of many small business owners, such as “Skip the Bank: Where to Find a Business Loan When the Banks Say ‘No’!” We like his personal, conversational tone and the humor he brings to his posts.

Commercial Capital blog

Primary Editor/Writer: Marco Terry
Favorite Blog Post: Cash Flow Problems and Solutions

About the Blog: Commercial Capital’s blog is focused on asset-based financing, factoring, and cash flow management. As such, it’s a superb resource for businesses with high levels of inventory or receivables. The articles are honest and transparent, with the cost of different financing options clearly noted. The articles are quite short, so they are a good read for small business owners who are pressed for time.

QuickBooks Small Business Center

Primary Editor/Writer: Nicklas Prieto, Mircea Vlaicu, Fred Badlissi, Ted Chang, Ashley Meadows
Favorite Blog Post: Understanding the 3 Essential Financial Statements for Financial Reporting

About the Blog: QuickBooks offers helpful guidance to small business owners on a variety of financial topics, from loans to crowdfunding to banking to credit. It’s a truly comprehensive resource with a nice mix of writers. There’s a good chance that you may already use QuickBooks accounting software, but even if you don’t, this is a great financial blog to head to for tips and inspiration. Their articles tend to be long and detailed, so they will connect well with small business owners who have lots of questions and want to do thorough research.

Fundation

Primary Editor/Writer: Greta Klein and Lana Goldsmith
Favorite Blog Post: How to Improve Your Business Credit Score: 10 Tips from Fundation

About the Blog: Fundation has a great financial blog that covers both general topics, like how to improve your credit score, and more niche topics, such as how to get a business loan for a dental practice or day care center. That information will be valuable as small businesses vary so much from industry to industry–over a dozen industries are currently featured on Fundation’s blog. Klein and Goldsmith also offer tips on how to remain competitive in your industry and increase revenues.

Experian Business Information Blog

Primary Editor/Writer: Gary Stockton, Gavin Harding, and Peter Bolin
Favorite Blog Post: New Frontiers: What’s Next for Online Marketplace Lending?

About the Blog: Though Experian is best known for being a consumer and business credit bureau, their financial blog digs a lot deeper. The articles cover how to obtain a small business loan, money saving advice, and a surprisingly, a number of articles on alternative lenders and how to get a business loan online. Experian also does small business webinars from time to time, and these are announced on the blog.

SmallBizClub

Primary Editor/Writer: Lynda Bekore & Edwin Bevens
Favorite Blog Post: 4 Warning Signs That Your Small Business Needs an Accountant

About the Blog: SmallBizClub’s blog has articles on a variety of topics, but the main theme seems to be how set your pricing, collections, and bookkeeping policies to save money and grow your business. There are also some more obscure topics that a small business owner may have trouble finding help on elsewhere, such as how to send an international wire transfer. We applaud SmallBizClub for covering lesser known topics in a way that’s accessible and informative to small business owners.

SmartBiz Loans blog

Primary Editor/Writer: Suzanne Robertson
Favorite Blog Post: What to Expect from a Small Business Lender

About the Blog: SmartBiz’s blog is all about demystifying the small business loan application process–we like it so much that we’re even a regular contributor to the blog! SmartBiz is an SBA lender, so their blog focuses on SBA loans, but they also have articles with more general financing advice. We especially like their glossary of small business lending terms — every small business owner should bookmark this blog post.

Noobpreneur

Primary Editor/Writer: Ivan Widjaya
Favorite Blog Post: 10 Resources that can Help Online Entrepreneurs to Cut Costs

About the Blog: As its name suggests, the Noobpreneur blog is for new business owners trying to figure things out. However, there are also several finance articles on this blog that even seasoned business owners will find helpful. From how to choose business insurance to how to make the most of your business budget, Widjaya creates article that will hit home with small business owners. We’re not the only one to notice either–Noobpreneur has appeared on Forbes’ 2015 list of the Best Websites for Entrepreneurs.

BFS Capital

Primary Editor/Writer: Jose Terrier (editor) and Matt Meltzer (writer)
Favorite Blog Post: Checklist for Restaurant Owners Applying for a Small Business Loan

About the Blog: BFS Capital has a large number of finance articles for small business owners, particularly those in the restaurant and construction industries. Businesses in those industries will find the checklists and advice to be very helpful. Jose Terrier and Matt Meltzer also cover lesser known topics that affect a wide range of businesses, such as how to incorporate EMV chip technology in your business and what you need to know about equity crowdfunding.

Mason Myers blog

Primary Editor/Writer: Mason Myers
Favorite Blog Post: The Mirage and False Hope of an ‘Exit Strategy’

About the Blog: This blog is run by Mason Myers, a partner and co-owner of investment firm Greybull Stewardship. In the blog, Myers writes about small business loans, raising venture capital, and the financial aspects of having a business partner. There are also some excellent articles on business acquisitions for people that considering either selling or buying their business. Myers’ posts, even though the underlying topics are complex, are concise and easy to understand.

Smarter Finance USA Blog

Primary Editor/Writer: Rob Misheloff
Favorite Blog Post: Vendor Financing Programs: 5 Critical Things to Look for in a Partner

About the Blog: Smarter Finance’s blog focuses on equipment financing, which is something that both new and established businesses have a need for. Rob Misheloff dives deep and covers how businesses is different industries, such as health and construction, can qualify for equipment financing. There’s even an article about how DJs can get equipment financing for audio and music equipment!

Hiscox

Primary Editor/Writer: Gyawu Mahama
Favorite Blog Post: 12 Insurance Terms All Small Business Owners Should Know

About the Blog: Hiscox is the only insurance provider on our blog and with good reason. Their blog is comprehensive, containing dozens of articles that help small business owners get their finances in order. Hiscox’s blog may make you rethink the way you’ve been running your business with articles such as “Does Your Small Business Need a Finance Chief?” and “How to Run a Risk-Less Small Business.” The writers, a mix of expert guest bloggers and Hiscox staff members, also cover larger economic trends and how they affect small business owners.

Money Girl blog

Primary Editor/Writer: Laura Adams
Favorite Blog Post: Financial Advice for Entrepreneurs Starting a Business

About the Blog: The fun name of this blog was what first caught our attention, but the content on the blog confirmed our choice to include it on this list. Laura Adams covers personal and business finance tips, which are especially helpful to women and to entrepreneurs with home-based, e-commerce, or fledgling small businesses. Adams even has a financial podcast if you prefer to listen to something while driving to work.

Business Credit Blogs

Nav blog

Primary Editor/Writer: Lydia Roth and Jared Proctor (Editors); Gerri Detweiler and Lydia Roth (Writers)
Favorite Blog Post: How to Shop for A Business Loan Without Hurting Your Credit Scores

About the Blog: Nav is a company that’s focused on helping businesses improve their business credit score, which is essential to getting favorable terms on financing. However, their blog goes beyond that to discuss many things that are important to the bottom line of small businesses. For example, they have articles of how small businesses can combat fraud and negotiate lower merchant processing fees.

Business Credit Blogger

Primary Editor/Writer: Marco Carbajo
Favorite Blog Post: 7 Compelling Reasons to Start Building Business Credit in the New Year

About the Blog: In this blog, Marco Carbajo helps businesses understand and improve their business credit scores. He also touches on related topics, such as how bad credit borrowers can get funding and how to choose a business credit card. Whether you’re a new business trying to build business credit or an established business trying to repair or maintain business credit, Business Credit Blogger is an excellent resource.

Epsilon Business Credit

Primary Editor/Writer: Chris Young
Favorite Blog Post: Start-Ups: How to Get a Business Credit Card

About the Blog: Epsilon Business Credit is still a relatively small blog with about a dozen or so articles, but writer Chris Young regularly adds new articles, and what’s already on there is full of actionable tips for small business owners. For example, you can get tips on how to find a small business credit card with no personal guarantee or a step-by-step guide on how to use financial ratios for small business accounting.

Invoicing & Cash Flow Management Blogs

BlueVine Blog

Primary Editor/Writer: David Clayton
Favorite Blog Post: Accounts Receivable Financing: The Business Owner’s Guide

About the Blog: BlueVine provides receivables financing or invoice factoring to small businesses. Invoice factoring is a great option for small B2B businesses, but it can be confusing because it works differently than a loan. BlueVine’s blog has several articles breaking down how invoice factoring works, who is a good candidate, and how to shop for a good receivables financing partner. They also cover more general topics, such as what to look for in a business loan and how to better manage cash flow.

Fundbox blog

Primary Editor/Writer: Caron Beesley, Alyssa Gregory, Gina Hall, Justin Reynolds, Rieva Lesonsky
Favorite Blog Post: 5 Steps to a Healthier Cash Flow in 2016: Give Invoice Financing a Try

About the Blog: Fundbox is another blog that focuses primarily on invoice financing and cash flow management. The article linked above is the fourth part in a five part series that explores how invoicing financing can help small business owners take control of their cash flow gaps in 2016. There are also many helpful list posts on Fundbox’s blog that give you specific tips on how to optimize cash flow.

Accounting & Tax Blogs

inDinero

Primary Editor/Writer: Melissa Hollis, Jessica Mah, Ryan Mason, Rebecca Wilson, Amy Wolfenberger
Favorite Blog Post: Top 7 Accounting Terms & Equations for Running a Business

About the Blog: Confused about cash versus accrual accounting? Want to know what to watch out for before filing your taxes this year? Don’t know what your business’ “burn rate” should be? The answers to these, and many more questions, that can help your small business save money, are on inDinero’s blog. Sometimes, the numbers involved in doing accounting and taxes can be intimidating for even the savviest of business owners. inDinero, which makes accounting software for small businesses, makes these things easier to understand.

*Bonus: Our Financial Blogs*

Rounding out our list are our own financial blogs! FitBiz Loans has a Small Business Loans blog which is full of valuable resources for small businesses that need financing. We believe that educated borrowers make the best clients, so we try to provide clear, honest, actionable advice for current and future borrowers.

If you’d like even more in-depth articles, hop on over to our sister site Fit Small Business, which specializes in providing how-to articles and product and service reviews for small businesses. We have hundreds of articles about financing and lenders as well as other topics needed to run a small business (marketing, sales, retail, you name it!).


Not Worried About Regulation, Marketplace Lenders See More Bank Partnerships

By Nathan Stovall

Even with the prospect of added regulatory scrutiny, marketplace lenders plan to pursue more partnerships with banks.

Marketplace lenders increased partnerships with retail banks in 2015, and many of the lenders have said they expected those relationships to increase in 2016. Alternative lenders like OnDeck Capital Inc., LendingClub Corp., Fundation Group LLC, Prosper Marketplace Inc. and Funding Circle USA Inc. have all partnered with retail banks. Executives from several of those companies and other marketplace lenders said Feb. 11 at the KBW Winter Financial Services Symposium that the partnerships are attractive because traditional banks have access to a larger customer base, while the marketplace lenders help originate loans in a more user-friendly and cost-effective manner.

Sam Graziano, CEO at Fundation Group, an online provider of small business loans, said at the KBW event that banks do not originate small business credit in a very efficient manner, but they have far greater access to customers than alternative lenders. Fundation has partnered with Regions Financial Corp. and serves as the online small business loan origination channel for the Birmingham, Ala.-based bank. Graziano said his firm can improve the customer experience, while lowering the cost of origination for the bank.

Graziano also highlighted the partnership between JPMorgan Chase & Co. and OnDeck, another online small business lender. The Fundation executive said the joint venture between those two companies was interesting and noted that JPMorgan can use OnDeck's scoring program to access more customers.

Andrew Deringer, vice president and head of financial institutions at LendingClub, told a similar story, saying that the partnerships lower the cost of origination for banks while improving the customer experience "dramatically." He said at the conference many customers no longer want to connect with their financial institution through traditional means and would prefer an online option.

Ron Suber, president of Prosper Marketplace, said close relationships with banks are a core part of his firm's operations. He noted that five banks invested in Prosper when it raised $165 million in April 2015. Banks also purchase loans from Prosper and retain those credits on their balance sheets, while in other cases they have packaged and securitized those loans to investors.

"I think you're going to see more and more of us work with banks," Suber said at the event.

Partnering with a bank requires more of a marketplace lender than simply signing a contract. The FDIC recently emphasized that banks need to identify risks when partnering with marketplace lenders. The federal regulator stressed that the banks might lack extensive enough historical credit quality data of loans originated by the marketplace lenders due to their short tenures. The agency further said banks need to take into consideration marketplace lenders' compliance with fair lending laws, anti-money-laundering rules and consumer protection requirements, among other applicable regulations.

The Federal Reserve has highlighted similar risks that the partnerships can present to banks. While the Fed has acknowledged that partnerships can offer an opportunity for banks, it has noted that banks must consider regulatory compliance implications of the joint ventures.

Marketplace lending executives at the KBW event were fully aware of the regulatory risk that comes when partnering with banks. The executives emphasized that they view compliance with bank regulation as a prerequisite for joint ventures.

LendingClub's Deringer said one common misconception about marketplace lenders is that they operate "in the shadows" without regulatory oversight. Deringer said he is familiar with bank regulation, having previously served as a bank examiner for the Federal Reserve. He also noted that he spent more than 16 weeks last year in various examinations with the firm's bank partners. By partnering with banks, LendingClub is effectively inviting all the regulation banks face unto itself, he said.

"You have to get it right. You can't sacrifice the reputation of the bank. You can't sacrifice the reputation of our platform," Deringer said.

Rana Mookherjee, adviser, capital markets at Funding Circle, said he has spent considerable time, money and energy creating a comprehensive regulatory framework for his firm. He said any marketplace lender looking to partner with a bank has to meet the standards of any vendor to a bank, requiring them to adhere to vendor management information security provisions.

Fundation's Graziano views his relationship with banks as "regulation by association." He noted that regulators simply view his firm as an extension of the bank in question.

Nino Fanlo, president and CFO at Social Finance Inc., stressed that his firm sees compliance with bank regulation as an essential part of its business. He noted that the third employee hired at SoFi was its general counsel. He said the firm speaks with Eugene Ludwig, founder and CEO of Promontory Financial Group and former head of the OCC, on a weekly basis. Fanlo added that it is an unusual week where he doesn't speak with representatives from the White House, Congress and the CFPB.

"It's the cost of doing business. You have to get an A in the class or you don't go on," Fanlo said at the event.


CEO Sam Graziano on MSNBC's Your Business

Click the image below to watch the full interview.

More and more small business owners are checking out the online lending space when they need funding. The field is a true alternative to traditional bank loans. Sam Graziano, the co-founder and CEO of Fundation, tells Your Business how and why it’s an option that small business owners might want to consider.

 

Sam G. on Your Business MSNBC_2.4.16


Bank Branches Are Still Good for at Least One Thing

by Robert Barba

Even the kind of consumer who is always connected to the Internet may still crave a human connection when it comes time to open a bank account.

Consider Regions Financial. The Birmingham, Ala., bank recently launched an online tool that helps determine which checking account is best for its customers — or prospective customers — by asking a series of questions: what features they need, how much they receive in direct deposits each month, how many checks they write in a month, and so on.

The interactive tool is meant to recreate the experience someone might have in the branch as they talk to a banker who would go through a similar process in person. At the end of the session, the tool gives the user a recommendation and two options: open the account online or schedule an appointment in the branch. Preliminary results show the branches are still a draw.

"We are less than two months in, but our customers are choosing both options," said Andy Hernandez, head of digital banking for Regions. "For us, it is not about making them choose. It is about simplifying the experience and acknowledging that many customers may want to start the process online but finish it face-to-face."

For the banking industry, consumers' perhaps fickle nature presents a chicken-and-egg problem: Do consumers want a mix of digital and in-person banking, or does the inadequacy of current digital offerings effectively force them to use a second channel?

"Today," opening an account digitally "is a process that is not easy; banks have not made it crystal clear or very easy for consumers to become customers via digital channels," said David Albertazzi, a senior analyst at Aite Group.

His firm published a report last year on checking account trends based on 2014 data. "When we asked consumers why they did not complete an application using a PC, laptop or mobile device, 57% said because they needed to or wanted to talk to someone," Albertazzi said. Not being able to get a question answered was the second-highest reason (39%) for abandonment.

Seventy-three percent of people who opened a checking account in 2013 or 2014 did so in a branch, according to Aite. And don't assume those figures reflect seniors or baby boomers set in their ways; of those who opened a new account, 81% belonged to Generation X or were millennials.

Reducing abandonment, or improving digital sales, is a hot topic in banking. Several banks have made "omnichannel" banking — essentially building a seamless experience across its various channels — a priority.

"We are looking for ways to connect the [digital world and the physical world] and make it frictionless," said Brent Reston, a digital sales and service executive at Bank of America. "And largely, we are just responding to customer behaviors and where they want to interact with us. For instance, 65-70% of those who start their purchase journey online end up opening a product in person or through a call center."

In the fourth quarter, B of A's digital sales rose 31% year over year. The company recently tripled its digital banking budget. Some of the priorities it has set for the sales process include integrating a feature that extracts information from a photo of an identification card and making it easier to save an incomplete application to continue later, Reston said.

According to Albertazzi, the push to allow customers to open accounts on their terms is part of a movement toward making banking customer-centric rather than product-centric.

KeyBank is another bank that has found customers want at least the option to apply online.

"We want to make it easy for our clients to bank with us in the manner they choose," said Matt Lehman, the head of online and mobile at KeyBank. "We made a concerted effort to make applications available digitally in 2013 through online and then added the ability for mobile in 2014."

In 2015, the number of accounts opened digitally at Key was more than three times what it was in 2013.

While banks are looking at ways to make the digital application process easier, the fintech industry has also squarely identified this area as one ripe for partnerships. Regions Financial has been particularly enthusiastic about teaming up with other companies to improve its process. For instance, its tool to determine the best checking account stemmed from a partnership with Ignite Sales.

Also, in October, Regions partnered with the marketplace lender Fundation to offer small-business loans. The partnership was partly driven by the bank's desire to have an easy way for its customers to apply for a small-business loan online.

"It started a few years ago. Based on focus groups it became apparent that small businesses wanted to apply for credit online," said Joe DiNicolantonio, the head of business banking at Regions. "We explored all our options, including building something in-house, but ultimately decided on a partnership."

Such partnerships are likely attractive because of the speed of integration. Banks have to build around legacy systems and silos.

"Compare that to a business like ours — we are built from the ground up for the digital age," said Sam Graziano, Fundation's chief executive. "Because we are flexible and nimble, we can quickly build the interfaces needed to transmit the data."

Regions is also working with Avoka, a startup focused on the digital sales experience, to evaluate some of its retail products. Hernandez would not disclose additional details about the Avoka partnership.

A recent study commissioned by Avoka suggests there is a tremendous opportunity for banking in offering digital applications to small businesses. The survey found that while 58% of personal banking products could be applied for digitally, only 27% of business banking products could be.

"Historically, the focus has been on the consumer because that is where the volume is," said Derek Corcoran, Avoka's chief experience officer. "When you consider that small-business owners are among the busiest people, you see it is a real opportunity being missed."


Fundation Named Finalist In 2016 Stevie® Awards

10th Annual Awards Will Be Presented on March 4 in Las Vegas

New York, NY – February 12, 2016 – Fundation was named a finalist in the Sales & Customer Service category in the 10th annual Stevie® Awards for Sales & Customer Service, and will ultimately be a Gold, Silver or Bronze Stevie Award winner in the program.

The awards are presented by the Stevie Awards, which organizes several of the world’s leading business awards shows, including the prestigious International Business Awards and American Business Awards.

The final results will be announced during a gala banquet on Friday, March 4, at the Paris Las Vegas Hotel in Las Vegas, Nevada. Finalists from the U.S.A. and several other nations are expected to attend.

More than 2,100 nominations from organizations of all sizes and in virtually every industry were evaluated in this year’s competition, an increase of 11% over 2015. Finalists were determined by the average scores of 115 professionals worldwide, acting as preliminary judges. Entries were considered in 59 categories for customer service and contact center achievements, including Contact Center of the Year, Award for Innovation in Customer Service, and Customer Service Department of the Year; 51 categories for sales and business development achievements, ranging from Senior Sales Executive of the Year to Business Development Achievement of the Year; and categories to recognize new products and services and solution providers.

Fundation was nominated for having pioneered the first integrated partnership between an online lender and a traditional bank, Regions Bank. The first of its kind, this agreement combines the strengths of one of the nation’s largest full-service banks with those of a leading online direct lender to provide small businesses with a fully integrated, digitally enabled experience for loan products.

More than 60 members of several specialized judging committees will determine the Gold, Silver and Bronze Stevie Award placements from among the finalists during final judging, to begin January 25.

“The Stevie Awards for Sales & Customer Service continues to be the fastest-growing of our international awards programs,” said Michael Gallagher, president and founder of the Stevie Awards. “The sheer number of nominations is matched by the increasing quality of those nominations. We congratulate all of this year’s finalists and wish them well in the next phase of judging.”

“Fundation is honored to have been selected as a finalist in the Sales & Customer Service category,” said Barry Feierstein, Chief Operating Officer at Fundation. “Our partnership with Regions Bank is designed to provide the bank’s customers with the best possible digitally enabled experience when seeking a small business loan. We built the entire process around serving the customer, and it is terrific that our solution is being recognized as an award finalist in this category.”

Details about the Stevie Awards for Sales & Customer Service and the list of finalists in all categories are available at www.StevieAwards.com/Sales.

About Fundation
Fundation is one of the nation’s leading online direct lenders for loans to small and midsize businesses. Our innovative business model combines the benefits of a bank loan with the ease and efficiency of an online lender. Fundation is a direct lender: we originate loans with our own capital and keep loans on our balance sheet. Because we commit our own money to fund our customers’ business loans, our interests are aligned with those of our customers. We are successful when our customers’ businesses succeed and they are able to repay their loans back to us. As our customers’ long-term partner, we offer the highest level of personalized service and best-in-class products, which is why our customers come back to us when they need advice or additional capital.

About the Stevie Awards
The Stevie Awards are conferred in six programs: the American Business Awards, the German Stevie Awards, the International Business Awards, the Stevie Awards for Women in Business, the Stevie Awards for Sales & Customer Service, and the Asia-Pacific Stevie Awards. Honoring organizations of all types and sizes and the people behind them, the Stevies recognize outstanding performances in the workplace worldwide. Learn more about the Stevie Awards at http://www.StevieAwards.com, and follow the Stevie Awards on Twitter @TheStevieAwards.

Sponsors of the 10th annual Stevie Awards for Sales & Customer Service include Sales Partnerships and ValueSelling Associates.