Small business lending marketplace BitX Funding has struck an alliance with transportation equipment finance company Pelagic Capital, the companies said in a press release Tuesday (May 28).
The firms revealed plans to pool their resources and industry expertise to broaden small business lending operations and add equipment financing to the BitX Funding platform. Pelagic operates as a direct lender as well as a collaborator with dealers to help small businesses obtain non-bank equipment financing.
"We're excited to blend our expertise with longstanding relationships across business categories to offer more products and services," said BitX Funding President Todd Rowe in a statement. "Process, procedure and a deep bench of lenders and dealers will allow our clients to gain access to the asset funding needed to grow their business."
"We want the bankers and lenders to look at us and realize we are doing something that not everybody can procure," said Pelagic Capital Managing Director Greg Minsky in another statement. "We understand the hard asset side of the business, what it takes to get transactions closed and how to get to the 'yes.'"
Their press release noted that eight out of 10 companies lease equipment to optimize cash flow, obtain tax advantages and gain protection from equipment obsolescence.
Late last year alternative lender OnDeck Capital introduced equipment financing to its suite of financing products for small businesses. At the time, OnDeck pointed to research from the Equipment Leasing & Finance Association's 2018 Survey of Equipment Finance Activity, which found that the U.S. saw an estimated $35 billion in equipment loan and lease financing originations under $250,000 in 2017.
Separate analysis from the ELFA concluded that equipment financing volume has remained "steady" despite increased interest rates and global trade disputes. In an interview with PYMNTS last year, ELFA CEO Ralph Petta said there is a correlation between a strong economy and higher equipment financing activity.
"It's more of an environment where companies are feeling good about their ability to grow and expand," he said. "Where there is business optimism and confidence, we find that businesses will invest in assets and feel good about investing — and then they purchase, finance and lease equipment."