March 7, 2016
Main Street Monday — SmartBiz–The Online SBA 7(a) Marketplace Lending Disruptor?
Coleman Small Business Lending Podcast
Episode 14 — Evan Singer, President, SmartBiz
By Bob Coleman
Editor, Main Street Monday
Today’s guest is Evan Singer, President of SmartBiz, a venture backed financial technology company in San Francisco, CA. Evan has built a career around successfully building teams and launching and growing new brands and services. He has held leadership positions as Chief Revenue Officer at Milton’s Baking, President at Purity Organic, and General Manager at Align Technology. He started his career at Procter & Gamble, and graduated with honors from Stanford University.
SmartBiz grew out of the 2008 financial crisis when the banks that were supposedly “too big to fail” were not equipped to provide the funding small businesses needed for growth. This left a funding gap of hundreds of billions of dollars which banks left on the side-lines, hampering small business from investing in their businesses and putting people back to work.
Bob Coleman: “Sophisticated algorithmic scoring in the SmartBiz marketplace enables higher approval rates because the right applications are automatically directed to the right bank.” Evan Singer, President of SmartBiz, welcome.
Evan Singer: Hello Bob, thanks for having me.
Bob Coleman: What is a sophisticated algorithmic scoring system? Tell us about that.
Evan Singer: Well what we do is a combination of three different things. First, we have the leading online marketplace for SBA loans where we direct the right borrowers to the right banks. We use the underwriting characteristics of each bank and automatically determine if the borrower is the right fit based on those underwriting characteristics. Then we refer them to that (specific) bank driving up approval rates.
The second piece of what we do: The banks that are on our platform license our technology to underwrite and originate quickly so we are able to deliver a great online experience. Also funds to small businesses are as fast as seven days after they complete their application.
Lastly, we have an online packaging element combined with a team here in San Francisco that works with borrowers to easily collect all of their information and documents needed for an SBA loan.
When you put it all together it makes for a very easy and fast experience for SBA loans, which in our case carry low rates of 6.25% to 7.25% and long terms so it results in very low monthly payments for the small business.
Bob Coleman: Well I greatly appreciate you coming on the Coleman podcast, I have a ton of questions and I love your model. It is unique in the marketplace so let’s dive into it. It is interesting that you mentioned the online experience. This is being recorded on March 3rd and the New York Fed came out with a report this morning on “Credit Experiences of Small Business,” and it said, “Online lenders are a common source of financing but have the lowest borrower satisfaction levels because of the high interest rates.” You just said something which blew me away, 6.25%, you are not in the 35-50% APRs that some of the other online lenders dabble in?
Evan Singer: No we are quite a bit different. Our borrowers are getting some of if not the lowest rates and longest terms in the market. Our monthly payments on the low end are 2-3 times lower and on the high end 20 times lower than what they can get from the other online lenders in the marketplace.
Bob Coleman: Are you exclusively an SBA lender?
Evan Singer: We are. We only do SBA. We are just focused on that piece of the market. By just focusing on SBA it allows us to provide that great online experience for borrowers and do that very well. Our ratings are excellent, we have over 90% customer satisfaction.