Recently, I have had the opportunity to speak with a call Sam Hodges, who runs the US operation of Funding Circle. The following Q and A is based on my notes reconstructed and does not his exact words.
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As a small business to obtain loans
How much has awarded funding cycle? What is the typical loan amount and maturity?
Globally, Funding Circle facilitated more than $ 1.2 billion loan since 2010. In the last quarter Funding Circle $ 235 million in new loans originated, and a quarter were US companies. In the US, the average loan size is $ 140,000. We offer a maturity of 1 to 5 years, with an average of about 3 years.
As an insurer involved longer help company get approved for loans to have?
We analyze small business borrowers both our own credit models and human assessment and evaluation, we in our ability is critical you really to dig into the nuances of each of the small businesses we understand lend.
, for example, many companies are actually healthier than point their tax returns. In order to reduce their tax burden, try some entrepreneurs legally their "on paper" to minimize profits. This often occurs with companies that a lot of expensive equipment that can be depreciated on an accelerated basis. The effort many times a year is the equipment is purchased, but used the business there for many years. With the help of small entrepreneurs, the insurer may understand the true health of the company.
Many companies have issues that are not really necessary. For example, some companies may want to throw a big year-end party for their team or give their partners more cost accounts. By eliminating some of these costs, the company's profits would increase. An insurer may seek the owner of a small business these costs to get a better picture or what income would be if not eliminate substantial expenses.
Get ready for each sector loans? many alternative lenders loan is to use non-type businesses, such as accountants or marketing agencies.
by restaurants and gas stations to medical clinics, for example, and IT-consulting company, we provide a wide range of industries. Traditional lenders such as banks - and many of those in the alternative lending space - put a strong emphasis on safety and not give many companies, if they have close to 100% of the value of the loan collateral. If you are a billing company, but your company does not have expensive equipment or inventory that can be used as security. The lack of collateral often disqualified successfully received small business loans, especially in the service industry. While all of our loans are secured, we put more emphasis on the consistency and growth of cash flow, when making a loan. Also, we often find that many lenders put too much emphasis on the personal FICO score of the owner, if a loan to make it a business. While we believe credit history, is an important measure of the financial and operational stability, so are metrics such as real-time cash flow and a passion of the owner about the market opportunities.
How good is your credit model in predicting credit defaults?
is our global annualized loss rate target of 2%, and the actual figures are our target very close.
Manager of Financing Circle
Sam Hodges is co-founder and US Director of Finance District Administration, the leading online marketplace for small business loans in the world. He is responsible for the overall strategic direction and day-to-day operation of the company in the United States for monitoring. For more information about small business loans, please visit www.fundingcircle.com/us
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How to get a Small Business Loan
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