The SME lending platform will henceforth be known as Credibly. The newly branded company has also secured an impactful credit facility, as well as having launched a new product for business borrowers. We’re now 10 months removed from Glenn Goldman’s takeover of Retail Capital. We spoke to the former CAN Capital CEO, who described the unveiling of Credibly as the culmination of nearly a year’s worth of work spent trying to craft a holistic service for small business borrowers.
RetailCapital launched back in 2010 and has enjoyed impressive growth to date, doubling in size with each passing year. In August 2014 the company captured a significant equity investment from Flexpoint Ford, a Chicago-based private equity investment firm with $1.5bn under management. The firm has taken the stance that broader is better when it comes to both supplying funding, and the latest bout of changes reflect that mentality.
The aforementioned credit facility is being funded by three different banks: AloStar Bank of Commerce, WebBank and CapitalSource. The capital injection significantly boosts Credibly’s lending capacity across the entire United States, and serves as a complement to the company’s existing marketplace-based whole loan sale program.
Mr. Goldman sees a gradual shift away from fast money and towards permanent capital sources taking hold within the alternative lending space. The trinity of whole loan sale, balance sheet lending and securitization is, for Goldman, the magic formula. Each capital source helps to maintain the honesty of the other from a pricing perspective. And on balance sheet capacity, the Credibly CEO simply stated: “It shows that we’re willing to eat all that we cook.”
The new facility is the driving force behind the newly fashioned Credibly Small Business Loan. The product provides flexible growth capital to a broad range of SMEs, allowing for daily, weekly or monthly repayment. The product has been developed using “the application of dynamic design”, which Credibly claims will optimize features such as amount, duration, drawdown frequency and payback frequency. The goal is to positively impact cost of capital for Credibly’s business borrowers.
Goldman has identified a problem within the alternative lending sector. He observes a clustering of customers at both the super prime and sub prime ends of the credit spectrum – customers who are serviced by platforms that offer only 1 or perhaps 2 products. Credibly’s mission is to cater to sub prime, to super prime, and to everything in between – via a suite of 5 or 6 products.
Mr. Goldman explained:
“Most platforms offer one product aimed at a narrow slice of the market. At Credibly, we are taking a holistic view and believe that every business has the right to capital. The launch of the Small Business Loan serves as just the initial proof point of our dedication to delivering right-sized capital, through a robust set of credit products, that small businesses need throughout their life cycle. It's because of these bank relationships that we can say 'yes' more often to a wider variety of businesses so that new ideas and innovation can flourish in small business America."
RetailCapital has to date supplied around $150m in funding to businesses across all 50 US states.
Under its new title, Credibly appears poised for a period of sustained growth. The platform intends to grow in tandem with its customers, offering enough in the way of plasticity to cater to multiple phases of the business lifecycle. Platforms spend so much time and money on customer acquisition. Flexibility, according to Goldman, is the crucial factor in maximising the impact of that expenditure.