June 28, 2017
By Bob Coleman
Editor, C-Suite Wednesday
C-Suite Wednesday — Is Amazon Disrupting Your Customers and Small Business Lending Portfolio?
In response to my reporting of Amazon lending $1 billion to 20,000 small businesses in the past 12 months, I received several questions from Angela:
I’m curious how Amazon is securing its funds to lend to the small businesses since they are not a depository institution, such as a bank.
Amazon’s cash on hand as of March 31, 2017 is $15.4 billion. And while it does not have access to the Fed, it is able to raise any any amount of cash it pretty much desires through equity markets.
Furthermore, is there any regulatory governance?
Currently, there is little regulatory governance and oversight of nonbank small business lenders. However, that will change if the CFPB is able to expand consumer fair lending laws to the small business lending arena.
And do you see this trend forcing small community banks to compete for larger loans (over $1,000,000) with larger banks to stay in the business of lending?
My institution is a:
-Large or Regional Bank
-Community Bank/Credit Union/NonBank Lender
Do you believe you have lost customers or loans to Amazon Lending?
Do you view Amazon Lending as a threat to your institution?
What do you think is the maximum dollar amount of a single transaction you have lost to Amazon?
-Less than $25,000
-$25,000 to $100,000
-$100,000 to $250,000
Do you see this trend forcing small community banks to compete for larger loans (over $1,000,000) with larger banks to stay in the business of lending?