The Customer Effect

As credit tightens, Bizfi doubles down on platform strategy

  • Bizfi has moved from a balance sheet business lender to a lending platform.
  • The company recently hired John Donovan from Lending Club as CEO.
close

Email a Friend

As credit tightens, Bizfi doubles down on platform strategy

Bizfi has transformed and morphed since its launch in 2005. Founder Stephen Sheinbaum started the company as a balance sheet lender but around 2009 started seeing more loan demand than the young company could fulfill. So the company opened itself up to other funding partners, and now provides an experience where business owners can come and receive automated, real-time quotes from bank and non-bank lenders who can provide all types of financing.

It’s the 45 lending partners, 15 of whom are directly integrated into the Bizfi platform, that differentiate the company from some of its competitors, which include CAN Capital and OnDeck. While other lenders have what Sheinbaum calls their credit “box”, having a marketplace alongside Bizfi’s own lending offering gives customers a lot of choices for financing.  “Think of us like Progressive, with our own offers next to our peers,” he said.

Since inception, Bizfi has enabled almost $2 billion of loan originations, using its own balance sheet to still fund about 30 percent of the $20 million monthly done on the platform.

Bizfi’s marketplace isn’t just about providing other sources of capital. Participating lenders populate payment and collection data back to the platform, so that BizFi keeps a sort of general ledger on the life of the loan. Bizfi manages the ongoing relationship with the borrower and can leverage its 100 sales reps to continue to provide service and alternative financing options during the life of a loan and after.

Sheinbaum personally heads the company’s business development strategy, pursuing partnerships to help build distribution. It recently signed a deal with Jack Henry and Associates, so that loan officers at FIs that use JHA’s core banking technology can use BizFi to help monetize declines and provide needed financing. Bizfi also cut a deal this year with the Western Bankers Association, a trade group of over 600 community and regional banks.

“We’re looking to partner with strategics who can help get us out there,” Sheinbaum said. “The Intruits, merchant processors…anyone dealing with small businesses, we want to talk.”

Biz dev deals like these are strategic for the company and helped drive the recent hire of Lending Club founding employee, John Donovan, to the position of CEO. A 30 year alternative finance and payments veteran, Donovan is expected to help the company scale its hybrid lending platform and execute on more top line initiatives, such as signing similar partnerships to the ones the company bagged, like Jack Henry.

Donovan, with his experience taking Lending Club public, may also signal an eventual interest in tapping public markets. But for now, Sheinbaum is focused on the firm’s first institutional equity round and ramping the business.

“We’ll reevaluate going public after we have an immediate equity partner in our business,” he remarked. “We have new products rolling out in the first quarter. As more business see that they have alternative financing options, we continue to grow.”

0 comments on “As credit tightens, Bizfi doubles down on platform strategy”

The Customer Effect

It’s 2022 and FIs are still struggling to make their products accessible. Procure Access wants to change that.

  • Americans with disabilities have a total of $490 billion in disposable income. Yet financial services are struggling to meet accessibility requirements, even with basic tools like PDFs.
  • With Procure Access, everyone from Google to Fidelity Investments is getting involved to ensure accessibility is considered at the start of the procurement process.
Rabab Ahsan | September 14, 2022
Sponsored, The Customer Effect

Creating a hyper-personalized banking experience

  • To this day, a lot of financial institutions are using legacy systems that were written back in the '80s and remain the same.
  • Today's digital banking platforms and card services can offer hyper-personalized experiences to create a unique experience for each cardholder.
Zeta | August 25, 2022
The Customer Effect

The reversal of Roe v. Wade: Its impact on economic growth, financial wellbeing, and the financial services industry

  • Roe v. Wade has been overturned, after almost half a century -- what does that mean financially for America?
  • Here's how the ruling may hurt the state economies that will have a ripple effect throughout the economic system of the country.
Sara Khairi | August 02, 2022
Sponsored, The Customer Effect

Finance with a face: How personalization drives engagement, retention, and profitability

  • New technology allows for innovative companies to build banking products that cater to the specific needs of each individual.
  • Personalization is the key to meeting key product metrics and competing in this new landscape of embedded finance.
Q2 | March 14, 2022
Library, Modern Marketing, The Customer Effect

Tearsheet’s 2021 guide for marketers: Gens under the lens

  • We closed off last year with a thorough breakdown of the financial consumer profile of each of the generations.
  • The compiled guide for marketers is now available for download.
Tearsheet Editors | January 24, 2022
More Articles