OnDeck, Kabbage, and CAN Capital have formed the Innovative Lending Platform Association (ILPA), a move designed to solidify the industry’s image. Education, advocacy and best practices will be priorities.
An early focus is the creation of the SMART Box. Standing for Straightforward Metrics Around Rate and Total Cost, the SMART Box, launched in partnership with the Association for Enterprise Opportunity, will promote term and tool standardization.
In June the ILPA begins a 90-day national engagement period where they will solicit feedback from associations, policy makers, lenders and other organizations. In September the ILPA will ask interested players to voluntarily adopt or support their model disclosure.
Cabbage COO and co-founder Kathryn Petralia said the increased transparency is important for a growing industry.
“As our industry rapidly evolves, we believe it is critical to provide the tools and transparency businesses need to make informed borrowing decisions.
“We founded Kabbage based on the fundamental premise that businesses can use the power of their own data to grow in ways never before thought possible. We are thrilled to take our commitment to SMBs to the next level by joining this group of fintech leaders to launch a clear methodology for how fees are calculated and communicated to borrowers.”
An industry serving small businesses needs to remain responsive to them CAN Capital CEO Daniel DeMeo said.
“Ever since our company was started by a small business owner 18 years ago, CAN Capital has believed that the key to the success of our industry rests on the success of the small businesses we serve. This means providing clear disclosures on pricing, ensuring products are represented accurately and providing the highest level of customer service.”