Privlo aims to fill a gap in the mortgage market in the State. There is a growing self-employed workforce who are increasingly locked out of homeownership by traditional banks. Whereas the platform uses a wide range of credit scoring criteria and unique documentation which allows them to source high quality borrowers, with complicated incomes or financial histories who have been overlooked by the banks. This group of people encompasses small business owners, entrepreneurs, self-employed individuals and seasonal workers.
In California 1 in 6 people in the workforce are self-employed or are a small business owner, a figure that is set to grow. Privlo was launched in 2011 and is currently operating in Idaho, Minnesota, Maryland, Tennessee, Texas, Virginia, and Washington.
Saro Vasudevan, Privlo's Chief Credit & Product Officer, commented:
"More than 90% of California's small businesses are sole proprietorships, and it's no secret that many in this group are totally capable of taking on a mortgage but simply can't get approved. There's pent up demand in every state we've launched, but we expect California to exceed anything we've seen so far."
In many Californian cities, like Berkeley and Santa Monica, the level of self-employment is around 22% and this reflects the state's strength in entrepreneurial and contract-based industries, like entertainment and technology.
Michael Slavin, Privlo Founder and CEO, added:
"We retain lifetime interest in every loan we make so we're still quite selective. When we look past things like uneven income, we're finding really qualified people, some even with credit scores in the high 700s with great financial capability. What we're doing is more of a mind shift if you think about it. If you live here in California, you're probably blazing your own path in one way or another. Traditional careers are becoming a thing of the past and we believe in embracing people and their entire financial picture, however complex it is, rather than devaluing their true financial ability."