building a better small business borrower experience
TRANSCRIPT
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Businesses dread borrowing from banks
We can make it better
Businesses will look elsewhere
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5,000,000 “EMPLOYERS” APPLIED FOR CREDIT
24million
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Spread
Costs
Profitability
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Source: Barlow Research Small Business Rolling 8 Quarter Data, 1Q2014-4Q2014
MONTHLY TOUCHPOINTS OF SMALL BUSINESSESannual revenues $100K to >$10MM
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Search Relief or disappointment
Apply & Wait
Typically 2 - 4 weeks
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MAJOR COMPLAINTS
• Lack transparency
• Long wait for decision
• Difficult process
• Repayment terms
• High interest rate
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Access to Capital
Ease
Speed
Good Deal
Transparency
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Access to Capital Ease Speed Good Deal Transparency
B+ C- C+ B C-
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Access to Capital Ease Speed Good Deal Transparency
“Very few (small businesses) say, ‘I can’t get a loan.”
Jamie Dimon | Chairman and CEO of JP Morgan Chase
“Small business owners also reported an increasein the ease of obtaining credit”
Wells Fargo / Gallup Small Business Index
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Access to Capital Ease Speed Good Deal Transparency
SMALL BANKS APPROVE MORE
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ARE THEY RECEPTIVE TO ONLINE?
Access to Capital Ease Speed Good Deal Transparency
CANNOT APPLY ONLINE
Source: Barlow Research Annual Payments Study 2015 Data
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ONDECK MAKES APPLYING EASY
Access to Capital Ease Speed Good Deal Transparency
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SURVEY SAYS...
Access to Capital Ease Speed Good Deal Transparency
Submitted
3 applications
26 hours
searching for credit
Contacted
3 institutions
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Access to Capital Ease Speed Good Deal Transparency
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Access to Capital Ease Speed Good Deal Transparency
...TO LENDING SYSTEMGETTING FROM TAX RETURN...
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Access to Capital Ease Speed Good Deal Transparency
EXPECTATION MEET NOT MEET
Requested amount All or nearly all Substantially less
Rates and fees Reasonable (e.g. 5-7%) High (e.g., > 10%)
Loan terms Customary Onerous
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Access to Capital Ease Speed Good Deal Transparency
Traditional
in person, multi-step app, 1 week, 5-7% APR
Online
simple app, 48 hours, 10% + APR
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Access to Capital Ease Speed Good Deal Transparency
Source: Barlow Research Flash Data Panel 2015 Data
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TRANSPARENCY ENABLERS
At ABC Bank, we want to get to know your
business and your concerns so that we can
create banking solutions that meet your
unique needs. blah blah blah
▌ Term Loans
▌ Real Estate Financing
▌ Revolving Lines of Credit
For more information, contact your branch
Access to Capital Ease Speed Good Deal Transparency
MOST WEB SITES TODAY
Business Lending
▌Unsecured Line of Credit
▌Equity Financing
What you offer - credit box
Steps in the process
Required documents
Frequent communications
Fees and prices
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Access to Capital Ease Speed Good Deal Transparency
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Access to Capital Ease Speed Good Deal Transparency
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Searching Waiting Relief or disappointment
2 - 5 days
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Before After
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Access to Capital Ease Speed Good Deal Transparency
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