The alternative lending market in the U.S. is not in its prime. Investors have backed off, regulation threatens to stunt the industry’s growth and, for many analysts, players in this space haven’t lived up to their expectations.
But that hasn’t stopped the alternative lending sector from growing in size. Its newest market entrant, Plousio, made its debut with an announcement on Thursday (Oct. 6), revealing plans to launch a platform connecting lenders to small business borrowers.
Run by CEO Alex Chang, Plousio reportedly has more than 70 lenders already linked to its services.
“Running a business is never easy, but it’s especially tough for small business owners,” Chang said in a statement. “Finding the capital to support the business is even harder. Plousio is a lending marketplace that connects small business owners with 70+ direct lenders that are ready to provide them with the capital their businesses need.”
Companies that are seeking funding through Plousio can obtain loans between $1,000 and $1 million, the company said, and borrowers aren’t restricted in how they can use the funds. The firm also touted its algorithm, MatchMeWhen, that streamlines the process of matching a borrower to a lender. Once a match is made, borrowers are then directed to the lender’s site to complete their loan application.
As a matchmaker, Plousio isn’t facing some of the market pressures faced by direct alternative lenders. And without depending on a single lender, the platform also isn’t as affected should one of those lenders go under. But that doesn’t mean it’s immune to these pressures. Earlier this year, the Consumer Financial Protection Bureau revealed plans to probe the nation’s marketplace lending industry, signaling a potential crackdown on consumer lending sites — something that could eventually expand to business lending platforms.
According to the company, it doesn’t charge fees for small businesses to use its matchmaking services; while its announcement didn’t elaborate on its revenue model, it’s likely the company charges lenders to have a chance to be matched with one of Plousio’s SME borrowers.