At a time when demand for working capital from the nation’s millions of small businesses continues to grow, Marlin Business Services has launched a new working capital lending group expanding the company’s core business offerings to small and mid-sized businesses. Marlin’s high speed working capital lending platform is delivered via FundingStream.com, a website that allows small business owners to apply online for loans of up to $100,000 in minutes, using an intuitive web-based loan application portal. FundingStream.com loans can be used for business expansion, purchasing inventory, upgrading equipment, marketing, or straightforward working capital. Since the launch of this new business line, the company has implemented a cautious strategy to building out the business – taking time to learn what borrowers and vendors need to succeed in this vital business sector.

Equipment Finance Advisor visited with Russell Walraven, Vice President Direct Account Acquisition Marketing to learn more about Marlin’s expansion into the FinTech arena, and the company’s comprehensive approach to meeting evolving customer demands.

Equipment Finance Advisor: Russell, what are the driving forces behind Marlin offering working capital loans under a “FinTech” model?

Russell Walraven: There are a few reasons we have entered this space – the most important being the need to meet our small business customers’ demands. Our customer base has been asking us for working capital loan products for quite some time. For almost twenty years we have been providing equipment financing, and today many of our customers have significant borrowing needs outside of equipment finance. Until recently we haven’t been able to provide working capital financing for them. So, our customers are driving us to enter the market. The fact is, getting a small business working capital loan is still difficult for some small business owners. With Marlin’s long experience underwriting smaller ticket transactions in a high volume environment, we see this as the right time to enter this space using our core competencies of underwriting, risk management, and application processing under this model. This makes it a great fit for us in this space. 

Equipment Finance Advisor: How are you positioning the company for success in this rapidly growing sector of finance? What’s Marlin’s competitive edge?

Walraven: One of our biggest advantages is that we are a regulated bank. With all the anticipated regulation coming down the pike for alternative lenders, Marlin does not need to overcome the hurdles many of these FinTech startups or new companies are going to be facing. To a great extent, this space has been unregulated and going forward the newer players will need to shift and do things differently when regulations come into play. In our case, being a regulated company means we are already complying with all the rules and regulations that will be coming in the future. So it’s going to be a strategic advantage for us as we will be in compliance quickly and efficiently.

Also, along with being a bank comes a little security. Meaning, borrowers may feel more secure borrowing from a bank that is regulated and already complying with regulatory requirements as opposed to a start-up lender that is not currently held to the same high standards. We can show we are a secure company that has worked with over 300,000 businesses over the past eighteen years, so we have an advantage.

Another advantage is those 300,000 customers I just mentioned. We are able to rely on our existing customer base, which drives our cost per customer acquisition down. Therefore we won’t need to pay as much to drive a loan customer versus a new or start-up company. We have the advantage of a built in marketing base we will use to drive our volume up and cost per acquisition down – not needing to rely on marketing spend to drive new customers.

Equipment Finance Advisor: How is Marlin marketing this working capital product to its customers?

Walraven: One way is via internal referrals generated by our sales force of over 100 professionals. Any time these sales people are talking to the end-users and vendors, they are asking if they have a need for the working capital product and introduce them to Marlin’s full slate of product offerings. The working capital product is being introduced to every vendor and end-user we speak with in the normal course of our business.

Additionally, we are soliciting customers directly via various channels such as email, direct mail, and social media to get the word out to our existing customer base. We are also introducing these working capital loan products to our existing partnerships and alliances built on the leasing side, allowing us to drive the demand through some of our existing relationships.

We are laser-focused today on our internal customer base so we can grow our volume and perhaps most importantly, so we can provide additional services and products to our existing customers. And finally we are learning what messages resonate most with our clients. We have clients that can help us learn which offers work best. This way when we go the market at large – which is going to be in 2016 – we will have a clear direction on what to offer and how to best message and reach our customers.  We’re dabbling in a few things outside of our customer base now, but it will be rolled out to the market at large in 2016.

Equipment Finance Advisor: Are these transactions being underwritten differently than a typical small ticket equipment finance transaction?

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