Fintech, savior, or harbinger of yet another bubble for financial services…



Capital, often in demand, comes in many flavors, for many purposes, serving many needs. Historically, banks were the primary source for accessible, affordable funds. Family, friends, and angel investors were the backup for new business and impaired credits. A number of years later, credit unions, independent lenders, captive lenders, and a host of funds began lending in earnest. Most recently, technology has spawned yet another derivative source of funding utilizing secured debt, peer funding, and private equity in the form of Fintech. Some of the names thrown about include; On deck, Lending club, Kickstarter, Funding circle, Kabbage, and a multitude of others.

For many applicants, particularly small businesses, the mere mention of available capital is the sirens call to an entry toward Fintech. A few minutes on the computer, filling out a handful of on screen fields, and poof, an answer to meet all of the applicant’s needs.

Model this, model that, supporting data, static loss pools, algorithmic black boxes, Fintech has the answer toward your credit worthiness. Structure, term, pricing, etc are but mere details neither applicant nor lender need worry about…

Yet, in this faceless, nameless business of fintech lending, who is accountable, who has anyone’s interest in mind, who is willing to understand the solution best for the applicant? How well protected is your data?

It has often been said, speed kills…

Have we all become so conditioned toward instant gratitude that we fail in providing real service? Is speed service? Perhaps. Is the lowest rate service? Perhaps.

Yet, has the applicant considered matching term to asset obsolescence? Matching cashflow to payment, considered tax advantageous structures, servicing, early buyouts, end of term provisions. Have alternatives been vetted or presented?

Is there a possibility that the extension of further debt may not be the right solution for a borrower?

How does Fintech answer these questions?

Moreover, given the rapid expansion of Fintech and its access to the market, what happens if the wall of regulation suddenly appears, what if the rates are all considered usurious? Who will manage the losses and what impact will they have on the capital markets and the non-Fintech traditional lenders?

Sometimes the turtle beats the hare.

We stay committed to assisting small and medium businesses achieve their goals.

Whether your needs include replacing equipment, upgrading equipment, or acquiring new equipment for growth, Pelagic Capital Corporation is here to help with all of your equipment financing and leasing needs. Having prior funded hundreds of millions of dollars of equipment we understand the ins and outs of getting you funded.

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