Traditional banks are beginning to embrace their alternative lending competitors as a way to reach more borrowers and get a jumpstart on the technology and digitization behind the lending industry.
The latest bank to take part is Citizens Bank, which announced Tuesday (Dec. 20) a partnership with Fundation Group.
Fundation has emerged with a reputation to collaborate with banks, not work against them, by offering up its credit solutions and lending technologies to traditional FIs. For Citizens, this means small businesses can apply for loans and lines of credit through an online application at Citizens’ website, with Fundation powering the technology that enables the online application and a faster process. According to the companies, applicants can see approval within a few minutes and get their cash within three business days.
Fundation will also offer up its own lending services to SMEs that don’t meet Citizens’ requirements.
“We know that time is valuable for our business banking customers,” said Citizens Bank Head of Business Banking Chris Ward in a statement. “This simple digital application process will be quicker and more efficient for customers making smaller requests for credit, enabling them to get back to running their businesses sooner.”
“We believe that our new, automated lending platform will complement the tailored, advice-based services available through relationship managers and bankers to our customers who need larger loans or have more complex needs, such as cash management,” Ward added.
The partnership with Fundation mirrors an initiative in the U.K. that sees traditional lenders guide SMEs that have been rejected for a bank loan to an alternative lender to fill cash flow gaps.
The deal with Citizens follows recent partnerships inked between Fundation, Regions Bank and the Department of Commerce’s Minority Business Development Agency. The company also recently secured a $100 million credit facility from Goldman Sachs, it added.