May 15, 2014
By Charles H. Green
As mentioned in Coleman Report yesterday, the New York Federal Reserve Bank is convening business organization leaders and regional policymakers today for a summit on credit innovations. Who knew in 2007, when some investors started building a technology platform to find small business funding transactions, that ‘Wall Street’s regulator’ would be holding court to talk with them merely seven years later?
The idea that companies like LendingClub (peer-to-peer lending), PayPal (e-commerce lender) and CAN Capital (largest merchant cash advance funder) will be along side iconic lenders such as American Express, Goldman Sachs and JPMorgan should be adequate validation that the innovative funding space has arrived.
It’s a well-known secret that many of the nation’s largest banks have been investing in these platforms, buying their notes and providing some lender financing for a few years. But these innovative funders are relatively unregulated, and while the numbers flesh out that they serve plenty of small companies, there have been complaints around their ROI, which tend of resemble investor-scale returns rather than bank lending margins.
So what are they going to be talking about?
• State of the Market and Credit Opportunities
• New Products from Traditional Sources
• New Products from New Players
• Credit Strategies for the New Market
My guess is that the participants will be working harder to listen to others than concerned about talking.