May 22, 2013
By Bob Coleman
Editor, Coleman Report
New York Times blogger Ami Kassar has had enough. While admiring small business alternative lenders “speed to market” approach using innovation and technology, he is fed up with interest rates approaching 100%.
Calling for self regulation Ami writes “I do think there is a place for accredited, reputable lenders that innovate and that are willing to take more risk then banks take. And these alternative lenders should be paid more for the risk they take and the additional service they provide. I know many of the entrepreneurs who started these companies, and I don’t believe that their agenda is to try to damage small-business owners. They are technologists who set out to build platforms to try to make the lending process more efficient and to open up opportunities. And in many cases, they have done just that. They have accomplished things that would have taken the big banks decades to develop.
“What I wish these companies would do is to set some standards. This would include a commitment for clear and transparent loan pricing and plans to help their clients graduate out of their financing, so it does not become permanent. I would also like to see them leverage their entrepreneurial spirit to try to drive rates down for creditworthy small-business owners.
“By coming together, setting standards and striving for improvement, the alternative lenders could bring credibility to an industry that needs it.”