Many fintech companies in the lending space have taken a two pronged approach to their business. Offering loans directly to customers and also licensing their platform technology to other firms to leverage. It looks slightly different depending on the company and whether the platform is white labeled or co-branded but the concept is the same.
On the consumer side we have companies like Upstart’s “Powered by Upstart” and Avant’s Amount. On the small business side we have OnDeck’s ODX offering which has a partnership with PNC and the Kabbage Platform which has partnerships with banks such as like ING and Santander just to name a few.
Now we can add another to the lending-as-a-service list: StreetShares. StreetShares is unique when it comes to small business lending, focusing on small businesses which are typically, but not always, led by veteran entrepreneurs. The new offering is called StreetShares Platform and it provides an entirely digital experience. It offers flexibility for the institution to fund the loans or to have them funded by StreetShares.
StreetShares advertises that a bank can be up and running in just 30 days with a white labeled or co-branded offering. This is made possible by the fact that the platform doesn’t have to be integrated into the core banking technology of the bank. The offering is currently available for term loans, lines of credit and loans backed by contracts.
The company noted in their press release that fewer than 100 banks in America have an effective digital small business lending solution. Mark Rockefeller, CEO of StreetShares, provided this statement:
Small business lending holds enormous growth potential for community banks and credit unions…Unfortunately for them, online lenders and technology companies have stolen their market share. Our platform levels the playing field and puts community banks and credit unions back in control. To our knowledge, we’re the first fintech to give the financial community a peak under the hood.
We reached out to Mark Rockefeller to get more insight into the new StreetShares Platform. They are currently live today with one national bank, one community bank and two credit unions. Based on those clients it is no surprise that one of the key differentiators of the StreetShares platform is that they are focusing on small banks and credit unions. Other similar offerings, as described above, focus on some of the largest banks in the US. Rockefeller noted that all of their new partnerships have been live since July.
What StreetShares and others like them have done is built a lending platform from scratch which does not rely on legacy technology. StreetShares has been around since 2013 and has already proven out their model. For banks, especially smaller ones without large technology budgets, it makes a lot of sense to license the technology that has already been built and optimized. It will be interesting to keep an eye on how many banks StreetShares is able to bring into the fold.