Small Business Lending Marketplaces

Goals

Obtain the market size, industry growth and trends, along with key competitors of lendio.com in the small business loans/merchant services industry to pitch a prospective client.

Early Findings

Market Size

  • The Peer to Peer (P2P) lending market is projected to grow at a CAGR of 51.5% from 2016 to 2022, to reach $460,312 million by 2022. Peer to peer (P2P) lending is also referred as marketplace lending. The P2P lending industry is among the fastest growing segment in the financial lending market. It is an alternate way of lending money virtually.
  • The core functioning of marketplace lending platforms is connecting consumers/borrowers with investors/lenders, majorly through online medium.
  • The p2p lending market is driven by growth in emerging markets due to increase in knowledge of marketplace lending, greater investment transparency, and lower interest rates to consumers.
  • The online global P2P market is expected to reach $292 billion by 2022, and is currently estimated to be $157 billion in 2019.
  • Small business loans are the highest share of this market, followed by student loans, real estate loans, and consumer credit loans.
  • There are 27.9 million SMBs in the US.
  • SMBs borrow $600 billion each year, according to a 2017 survey by the Small Business Administration (SBA).
  • The average size of all business loans was $663,000 in 2017, according to the Federal Reserve.
  • 24% of small businesses applied for credit online in 2017.
  • The breakdown by industry is: Non-manufacturing goods production and associated services - 50% , Business support consumer services - 41% , Retail -41%, Leisure and hospitality -41% , Healthcare and education -40%, and Professional services and real estate -34%.
  • Online lenders accounted for more than $6 billion in small-business loans in 2017, according to S&P.
  • From 2015-2017, small business online lending created over 358,000 jobs, and added $40 billion to the US economy, with $37.7 billion on gross output.
  • Nearly one-third of online small business borrowers are located in lower income communities, with 24% of the companies having less than $100,000 in yearly revenue.

Lendio.com

  • Lendio has been in business since 2011.
  • Lendio has funded $1.4 billion in SMB (small medium-sized business) loans to date.
  • Lendio has over 75 lenders in their network, with over 73,000 loans funded.
  • Lendio offers credit solutions for lines of credit, equipment financing, term loans, commercial mortgages, credit cards, and startup loans.
  • Lendio is the nation's largest small business loan marketplace.
  • Once approved, capital is available within 24 hours.

Competitors

  • In September of this year, Stripe introduced Stripe Capital, an online SMB lending market.
  • Fundera offers a SMB lending marketplace. Fundera has secured over $1 billion in loans and helped over 35,000 businesses.
  • Zopa is a leading UK lending marketplace for SMB loans.
  • Other competitors are Lending Club, Prosper, Faircent (India), Lufax (China), Renrendai (China), and Fairplace (Brazil).

Proposed next steps:

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