In early May we learned from a press release that Wells Fargo, one of the largest banks in the United States was entering online lending. The new product, dubbed FastFlex is focused on providing loans to small businesses online. Wells Fargo has set a goal which trumps where many of the online lenders are today, aiming to lend $100 billion over five years. They are well on their way, having lent over $40 billion since setting this goal in January, 2014.
Wells Fargo has the opportunity to scale quickly due to two distinct advantages that many online or marketplace lenders simply don’t have: a large established borrower base in the form of small business clients which totals over 3 million and access to significant and stable capital.
We had the chance to speak with a representative from Wells Fargo about the new product and also were able to see how Wells Fargo is offering these loans since Lend Academy and our sister company LendIt are Wells Fargo customers.
The loans are currently only available to Wells Fargo customers who have had a business deposit account for 1 year or longer. Another advantage that Wells Fargo has is that they already have the have transactional data on the small business, allowing them to make a better underwriting decision. [Read more…]