Pub. 3 2015 Issue 1

Issue 1. 2015 27 Finding New Ways to Say “Yes” Smart bankers are looking for new ways to mitigate the risk of losing the business of under-qualified small business owners by partnering with lending companies with lower lending criteria. By partnering together with other companies, banks are effectively increasing their lending envelope without having to adjust their appetite for risk appetite. Although the bank is still not servicing the loan, they are helping their customers find a solution to their needs—and keeping their deposit relationships. This approach helps the bank influence the next steps their cus- tomers take to find a loan. Instead of showing a customer to the door, so that they continue on to their competitor’s door, banks are able to refer customers to a partner that is working with them instead of trying to steal them with lower rates. By helping the under-qualified businesses, banks are able to develop their cus- tomer relationships until the business is better qualified. This is an initiative that progressive banks are taking to pro- tect their current book of business. Over the past few months, business-lending news has been full of banks looking for ways to retain relationships with clients who fall just outside their lending criteria. As an example BBVA Compass partnered with OnDeck to provide additional loan options to businesses that fell outside their criteria. Selecting a Partner With the goal of your bank to keep customers, it’s important to partner with the right company. There are really two different types of providers to consider: 1. Single Product Solution: These are companies that specialize in one specific type of lending product. Since they focus on one type of loan they generally have very fast turnaround on applications and approvals. OnDeck, Can Capital and Hawk- eye are great examples. 2. Marketplace Providers: These companies create networks of lenders a bank can leverage to provide multiple loan options. The benefits here include more options in one place, allow- ing the bank to service a wider envelope of qualifications and needs. Lendio is a great example of this type of partner. In either approach it’s important to make sure the company you partner with has a good reputation. All long-term partnerships are based on trust and a good partner will help you improve your customers’ experience. Losing customers should never be an option, but neither should approving high-risk loans. Finding new ways to assist under-qual- ified businesses helps you protect your book of business and grow into the future as businesses develop and become more quali- fied. n Brock Blake I'm the CEO of Lendio, and my passion is to make small business lending simple for the 30 million Main Street businesses across the USA. Thankfully, we are growing rapidly by helping over 100,000 small businesses each year get matched to a lender to start or grow their business. As an entrepreneur, I've raised over $10M during my career. I believe that successful companies start with passion to solve a major problem, great teams, and a superior company culture. While business accomplishments can be a nice ego boost, my most important accomplishments come from being a husband and father of 3. We speak banking. At Chapman, our lawyers are on the front lines of finance, helping our bank clients and their customers document, structure, and restructure their financing transactions. Commercial Lending Mergers and Acquisitions Consumer Finance Litigation Bankruptcy, Restructuring, and Workouts Real Estate and Environmental Law Securitization and Structured Finance Securities and Regulatory Compliance Tax-Exempt/Taxable Bond Financings Chicago New York Salt Lake City San Francisco Washington, DC We speak your language. Learn more at chapman.com . Attorney advertising material.