Direct Lending Investments, Community Investment Management (CIM) and Eagle Bank Corp have invested more than $200 million through the StreetShares platform, a peer-to-business marketplace.
Direct Lending Investments, a business loan investment fund, and CIM, an impact investing asset management firm, will fund $200 million in small business loans over a four year period. Eagle bank Corp, a community bank, has opened a warehouse line of credit for commercial loans up to $50,000.
Brendan Ross, President of Direct Lending Investments, commented:
"Marketplace lending is exploding. Our mission is to put money to work fueling healthy small businesses. We are excited about this business partnership with StreetShares and the unique business owners they serve."
Jacob Haar, Community Investment Management, (CIM) Managing Partner added:
"StreetShares provides responsible and transparent financing to underserved small businesses to drive economic growth and job creation. We believe their innovative approach to lending and focus on veteran-owned small businesses creates significant long-term value for borrowers, local communities and investors, and we are pleased to partner with them."
The platform operates via an auction system. Investors compete in an online auction to fund portions of the requested loan; StreetShares blends the lowest bids into a single loan. This decreases the borrower’s cost to the lowest possible rate.
The majority of small businesses that use that StreetShares platform are owned by US military veterans. The platform has formed America’s largest coalition of veteran-focused small business, entrepreneurship and service organizations.
StreetShares was founded in 2014 by Mark Rockefeller, an Iraq war veteran and former finance lawyer, and Mickey Konson, former head of small business credit at Capital One. In the past few weeks the platform has also announced significant additions to its board. This includes Raj Date, former head of the Consumer Financial Protection Bureau; Pete Hartigan, founder of student loan refinancing firm SoFi, and former chief of staff of the US Army General George Casey.
According to the SBA 2012 Veterans Report there were more than 2.4 million business operated by veterans in the US, and 1 in 9 small businesses is Veteran owned. For Veterans who have recently left the forces transitioning to civilian life can be extremely challenging, not helped by the fact it is difficult to transfer skills that would have been highly sought after in the forces. The support network that StreetShares has built up around its platform is extremely valuable. Especially as about 25% of all returning Iraq and Afghanistan War Veterans want to start a business.