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Research Outline
Prepared for Taylor C. | Delivered September 16, 2019
Small Business Lending Marketplaces
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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.
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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.
T
h
e
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 o
f 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).
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