Inside Bond Street’s content marketing strategy

High interest rates and a downmarket reputation don't usually make for good marketing. But online lender Bond Street is trying to turn that messaging around with a content marketing strategy that focuses more on user experience than the nitty gritty. “That’s really helped us organically build a reputation within certain industry categories and geographies,” said Michael Jones, director of community development at Bond Street. “We’ve concentrated our efforts towards initiatives in which we can serve as both an advocate and resources to small businesses.” Jones said the company is “passionate about building a brand,” which it does by creating editorial content. It has a blog that profiles business owners Bond Street serves across the country, like the guys behind the Two Hands cafes and restaurants or the women that launched Sky Ting Yoga in New York City; and an online magazine that looks at the cultural and economic impact of independent businesses in New York (celebrity restaurateur Daniel Boulud and artist Baron von Fancy are among many interviews that address the importance of supporting local businesses). It also has a podcast called the Nitty Gritty that features the entrepreneurs behind brands like Sweetgreen, charity:water, McNally Jackson and Smitten Ice Cream; and a series of city-specific resources for female entrepreneurs. Jones declined to share Bond Street’s annual content marketing budget, but said the company has two dedicated employees working on content marketing, out of about 40 total employees. Many small business lenders strive to build a community by creating products and services to help people beyond just a transaction, said Ian Benton, an analyst in Javelin Strategy’s small business practice. And it’s not just the nonbank lenders. Banks are just as focused on the customer relationship, which was once built and developed in person around a transaction. Technology has widened the gap between the borrower and the lender so much so that the lending industry is almost entirely commoditized and shopping for lenders is easy. “Customers don't need to have the previous relationship, so banks and fintech providers are looking for reasons to strengthen those customer relationships,” he said. Marketing has become expensive for online lenders because of the high cost of customer acquisition. Partnerships are an easy way to bring that cost down, Benton said. To date, Bond Street has partnered with WeWork to offer loans to member companies of the co-working space company; SMB-focused software companies like Booker and Front Desk to offer their clients discounted loans; and most recently, with NerdWallet, the comparison shopping site for credit cards and other financial services, to help provide small business owners with financing options. “The opportunity for lending is not just to take advantage of the gap in capital available to small businesses, but rather to become their financial partner, and improve an antiquated process that is more than ripe for change,” Jones said. Bond Street is just one example of online lenders and other financial startups that market heavily around the idea of speed, ease and the idea that it can get small businesses the money they need and get it to them fast. Transparency has become a significant theme for them too, one that has helped them move away from “risky” borrowers. Last week the Federal Reserve Bank of New York issued a report that found small businesses taking out loans with online lenders showed higher levels of dissatisfaction than those borrowing from traditional banking institutions. Most borrowers cited lack of transparency as a major cause of their dissatisfaction, but borrowers of online lenders also cited higher interest rates and unfavorable repayment terms.

Online lenders' APRs can get as high as a 44 percent compared to what a bank might charge – which looks more like seven percent, typically – and can get into the triple digits when businesses decide to renew their loans, according to Evan Singer, CEO of SmartBiz Loans, an online platform that connects small businesses with banks for Small Business Administration loans. This is often what causes confusion about transparency. At Bond Street annual interest rates start at six percent, though most customers will see rates between eight percent and 16 percent. Jones said the company always communicates its APR and interest rates to customers and that there’s no prepayment penalty with its product. “In the broker ecosystem, there’s this large network of ISOs that charge incredibly high rates, and also aren’t totally transparent about what they’re offering to their customers,” Jones said. “We made the decision early on that we didn’t want to work with people who would compromise the customer experience.”