Walraven: Yes, it’s a different underwriting model and process. The reason is that while these deals are secured by a personal guarantee, there is no security based on a piece of equipment as we have on an equipment transaction. In these deals we only have a personal guarantee to secure the loan, and we are underwriting the deals using a scoring model. We are also utilizing some of the data gathered on equipment deals – particularly when we look at our existing customer base as we have the benefit of knowing a borrower/lessee’s payment history. But it is a different underwriting process. Today, a borrower can apply for an equipment financing or working capital loan and the underwriting is based on which product they have chosen. While the underwriting is being conducted by different teams, both sides of the house – equipment finance and working capital finance – are working together to understand exposure levels, credit risk and payment histories. We’re getting to the point now where we are seeing some very useful information coming from the working capital loan side, so the lease credit team can also benefit from what is learned from the working capital underwriting.

Equipment Finance Advisor: The program has been operational roughly three months – how is it going so far?

Walraven: Actually we started underwriting these loans in February 2015 working with some partners to drive volume. We were also doing some internal marketing only at the time. The online program with the online portal launched in July, and it’s going very well. We’re still learning and being conservative as we learn what works best for us and what fits best in our credit box. I can tell you that in Q3 we loaned over $2 million and we are looking to double that in Q4 2015.  In 2016 we are looking to grow exponentially with some aggressive and achievable goals. In September and October we booked over $1 million each month and we are very excited about how things are moving for us.

Equipment Finance Advisor: Do you anticipate more equipment finance companies entering this FinTech space?

Walraven: People are entering this space all the time and I believe more equipment finance companies will enter the space as well – directly or through some sort of partnership arrangements. I believe this product is something small businesses are looking for, and finance companies are always trying to provide customers additional value to retain and grow their relationships. This leads me to believe we will see more and more companies entering the space for a while, but there will likely be some consolidation of the space as well.

As more finance companies enter the working capital arena, we firmly believe Marlin is positioned well to be a leader in this space as we offer both equipment financing as well as working capital loans to small businesses – making us a place borrowers can come to satisfy many of their financing needs, not just some of their needs.