To say that the alternative lending space is reeling thanks to the sudden departure of one of its poster children, Lending Club CEO Renaud Laplanche, and the subsequent tumble of stock prices for it and the entire category of alt lenders — is a bit of an understatement.
It’s no sweat off the backs of many of the traditional FIs, however, who may feel somewhat vindicated for being too late to that party – and for one bank in particular, they’re using it as a platform to serve SMBs in new and creative ways.
Wells Fargo announced Tuesday (May 10) that it’s launching the FastFlex small business loan, a way for small business borrowers to apply for and receive a loan online in as little as one business day.
Its position seems to be one that takes the good of marketplace lender: digital and fast turnaround with all of the good of a traditional bank – risk management.
Timed with the alt lending meltdown.
“Because small businesses want faster, more convenient loan options, online and at competitive rates, we created Wells Fargo FastFlex Small Business Loan,” said the firm’s head of small business, Lisa Stevens, in a statement. “With a $100 billion lending goal, we want to make every responsible small business loan we can.”
Wells Fargo said it hopes to lend $100 billion in SME loans over a five-year period; already, the firm said it has lent $40.7 billion in new small business loans this calendar year.
The new loan product provides short-term credit; Wells Fargo assured the financing would be offered with “competitive interest rates, clear terms and as-soon-as next day funding,” Stevens added.
The executive added that FastFlex loans are part of a broader rollout of tools under the Wells Fargo Works for Small Business initiative, though she didn’t elaborate on what other tools and services will emerge this year.
“Applying and obtaining a loan should be simple and convenient; getting ready for a loan needs to be thoughtful and well-planned,” continued Stevens. “It’s as important as ever for small business owners to have one-on-one conversations with bankers, and access to resources and support to get creditworthy.”
According to the company, FastFlex, which was developed by the Wells Fargo Business Direct team, has been in pilot testing since August of last year. It emerges on the market as Wells Fargo celebrates its annual Small Business Appreciation Celebration, a two-month-long event to provide small business customers with special offers and services.