InvestNextDoor Boosts Loan Origination

By Georgina McCreadie on Monday 18 May 2015

Alternative Lending

InvestNextDoor has entered into a strategic partnership with Guidant Financial.

This partnership involves an exclusive small business loan origination agreement. Guidant Financial has committed to drive at least $100 million in business to InvestNextDoor’s platform.

Guidant Financial works with SMEs to identify, evaluate and deploy intelligent business financing strategies. Since 2003 Guidant has helped deploy more than $3 billion of capital into 10,000 small businesses and franchises. The InvestNextDoor platform lends up to $250,000 to small businesses. 

Jeremy Ames, President and co-founder of Guidant Financial, commented:

"This partnership will allow Guidant to provide capital to our existing lead flow of small businesses that either are not a match for traditional financing sources or would likely entertain more expensive financing that could compromise their long-term success. We've tied our financial incentives in this partnership to the ongoing success of the entrepreneurs who secure financing. In both of these ways, it supports our mission to increase the number of people who succeed in small business."

The platform has said this partnership is a signal to both retail and institutional investors that they have now secured direct access to large volumes of qualified borrowers that only banks could previously access.

Tabitha Creighton, CEO and co-founder of InvestNextDoor, added:

"Our business is solving a very important borrowing gap for small businesses. We've been able to identify meaningful pockets of borrowers in Guidant's ecosystem that are looking for financing and represent good opportunities for lenders. Our automated platform can provide a way to bring those creditworthy borrowers together with lenders maximizing the benefits to both sides of the table."

We continue to see partnerships in the marketplace lending space that help platforms boost origination. However, this partnership is slightly unusual as it specifies the amount of business that Guidant Financial will supply to InvestNextDoor. A slightly similar agreement is the Citi partnership with Lending Club, as the bank agreed to put $150 million into the programme. However, Lending Club is a significantly larger platform than InvestNextDoor and so this partnership for InvestNextDoor should have a huge impact on the development of the business.

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