Online lending is changing the way North Americans do business, and major banks are quickly catching on and riding the wave of innovation.
Regions Bank and Fundation Group LLC recently announced a partnership that will see the two organizations join forces to provide quick, coordinated lending solutions for small businesses. In doing so, banking customers will have the opportunity to receive the technological capabilities of a sophisticated online lender while enjoying the resources and brand power associated with a full-service bank.
“We’ve been paying attention to what’s happening in the markets for some time through ongoing feedback and research, and what we found is that a lot of our customers want to do business online,” said Joe DiNicolantonio, head of Regions Business Banking. “We started to explore this option and found that lenders like Fundations had robust technology and were very quick and customer-friendly.”
To enhance the user experience, small business owners may now access the clean, user-friendly Fundation online application through a direct link on the Regions website. In doing so, they will have the option of applying for loans through either Regions or Fundations. The added benefit of applying for a loan through the Fundations platform is that small business owners undergo a speedy application process and can receive funding within three days.
According to 2011 U.S. Census Bureau data, there are 5.68 million employer firms in the United States, and small businesses (those with 500 employees or less) account for 99.7 per cent of that number. Small businesses are a driving force in today’s economy, and creating robust solutions for this group has become a top priority for financial service providers.
“This partnership is the first of its kind in the industry,” said Sam Graziano, CEO of Fundations. “We’re thrilled to be working with a partner like Regions…we both come from a point of view that the customer comes first. I think it’s a great cultural fit. Even though they’re in Birmingham and we’re in New York City, it’s the way we both think about delivering high quality products and services to the small business sector. ”
Founded in 2011, Mr. Graziano developed Fundation after researching the challenges in accessing small business loans. The company ultimately received funding through a large investor in 2013, and small business owners may now secure up to $500,000 in conventional loans in streamlined way by visiting the Fundation website and following the four-step process.
While other online lenders have teamed up with traditional banks, including a recently announced partnership between Lending Club and BankNewport, Mr. Graziano stated that the merged website model is the first of its kind.
A recent study by global consultancy McKinsey & Co. found that banks could lose up to 60 per cent of retail profits to financial technology (fintech) firms over the next decade, with fintech firms offering an improved user experience and attractive technology. The threat can’t be ignored, and partnerships between traditional banks and online lenders will continue to rise as banks work to stay current and meet the evolving needs of their customers.