A recent Harvard Business School study that peers into the world of marketplace lending has shed new light on trends in the lending industry. The study, conducted by Karen Mills and Brayden McCarthy, updates their original case study prepared in 2014 and examines the changes that have taken place in just two short years. There are several key takeaways from the study that are important to borrowers and lenders, but there is one fundamental aspect of the report that is important to all existing PowerUp Lending clients and our prospective partners down the road.
The study notes, “As the online marketplace evolves, those who succeed will be the ones who have access to low-cost capital and those who can best access and serve the small business customer – creating products that fit their needs and ensuring that small businesses find their way to the loans that work best for them.”
While major marketplace lenders such as Can Capital, a business lender, and Lending Club, a consumer lender, have experienced grave difficulty in the past couple of years, PowerUp Lending has enjoyed a period of sustained positive growth. The two primary reasons for our growth and stability are the ones the report alludes to: low-cost capital and customer service. Allow us to explain why this is and how it benefits both our business and our borrowers as a result.
PowerUp Lending is not a newcomer to the lending industry. The founding partners of PowerUp Lending Group are seasoned professionals who built a large portfolio in the public markets. When we saw the opportunity to move into the small business lending marketplace, we did so with already established underwriting strength and a team of professionals who had an unparalleled depth of experience. While most marketplace lenders are utilizing “other people’s money,” which is to say, they borrow the funds they lend, PowerUp Lending is completely self-financed. We examine our borrowers and take 100% of the risk associated with our advances. Very few lenders can say the same.
It’s one of the reasons we are a leader in the small business loan consolidation and business debt refinancing arena. From the outset, we have sought to relieve the biggest pain points of our borrowers. Often times it was to simply consolidate their existing loan obligations and provide them a fresh source of capital; for many, this was a new lease on business life.
Perhaps just as important is our commitment to customer service. As the Harvard study notes, developing time-tested customer service standards is essential to the future of marketplace lending as an industry. The leaders of PowerUp Lending didn’t just fall into this industry by accident. Our growth in marketplace lending was precipitated by decades of lending experience built upon trust between us and the public companies we supported.
The best part about shifting our business model to helping small, non-publicly traded businesses is the relationships we have developed with business owners and entrepreneurs who make our economy really tick. Frankly, we feel as though we’ve derived even greater reward from watching our customers grow their businesses than they have been receiving funding from our group. To know that we’re in some small way helping to shape the future of entrepreneurship in America is something you cannot put a price on.