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.”

4 essential presentations on marketplace lending

best presentations for marketplace lending

Marketplace lending is rapidly evolving. From its startup roots, the industry is maturing along the lines of other robust lending industries: that is to say, the volumes of originations are ramping and securitizations — the packaging of pools of marketplace loans into securities and selling them off to institutional investors — are underway.

Interested in learning more about the industry? Tradestreaming has compiled an A-list of some of the best presentations and slideshares on marketplace lending. From the beginner to the advanced, these marketplace lending presentations have something to offer everyone.

Marketplace Lending: Evolution of an asset class

Author: Ron Suber (President of Prosper)

Prosper was a pioneer in the US in peer to peer loans. The model has changed as institutional capital has been injected into the industry, but it’s also meant that the industry has grown up a bit. Ron Suber, Prosper’s President, has been a major player in the maturation process that’s seen the industry grow from nothing in 2006 to an expected $122 billion in origination by 2020. Suber’s presentation, delivered at the LendIt Conference, does a great job describing where marketplace lending came from and where Suber and Prosper believe it’s headed.

A trillion dollar market by the people, for the people

By: Charles Moldow (Foundation Capital)

Charles Moldow, of Foundation Capital, is considered one of the most influential investors in the marketplace lending space (you can hear an interview Tradestreaming conducted with Moldow). In fact, he’s credited with coming up with the new name for the industry — marketplace lending — replacing P2P lending, which is how the industry began. In this presentation, Moldow, who was an early investor in Lending Club, lays out the early thesis behind investing in the industry and shows the revenue production possible if marketplace lending is successful in just capturing a small percentage of lending business from the banks. Indeed, he believes that marketplace lending can grow to be a trillion dollar industry.

Transforming the banking system into an online marketplace

By: Renaud Laplanche (Lending Club founder, CEO)

As Lending Club became the first consumer marketplace lender to hit public markets, its CEO and founder, Renaud Laplanche has become kind of a de-facto spokesperson for the industry. This presentation, delivered at the 2014 LendIt conference focuses on how the banking industry hasn’t enjoyed many of the same efficiency gains other industries saw in the era of the internet. Laplanche demonstrates how marketplace lending can replace some of the core functions of the banking sector, and in doing so, provide a solid product to market participants and make a lot of money.

Why marketplace lending is better

By: Samir Desai (Funding Circle)

While the other presentations have focused on consumer lending on marketplace lending platforms, Funding Circle’s founder, Samir Desai’s video, from Lending Europe 2015, describes his firm’s opportunity in SMB lending. Funding Circle is the leader in this type of marketplace lending globally. This video delves into not just what marketplace lending is, but why it can be seen as better than traditional models. Desai describes how his platform matches supply and demand and how a marketplace lender should be fundamentally less risky than a traditional balance sheet lender.



WTF is marketplace lending?


What is marketplace lending?

Marketplace lenders are non-bank financial institutions that match up borrowers with lenders. Marketplace lenders leverage technology to evaluate and process loan requests. That allows them to cut costs and to streamline loan approvals.

What is the difference between marketplace lending and more traditional forms of lending?

Banks take deposits from their clients and lend them out. The difference in the interest rates they pay out and the interest rates they receive on their loans is their profit.

Marketplace lending is different because these lending platforms do not take deposits or lend their own capital. Instead, they serve as brokerage firms to match up lenders and borrowers, taking a fee for operating the lending platform.

Is marketplace lending regulated?  Is it safe to lend via a marketplace platform?

There is government oversight for the industry, but no formal regulation – yet. The industry attracted the attention of the Securities Exchange Commission (SEC) nearly immediately after being founded, and industry pioneers Lending Club and Prosper voluntarily ceased operations in 2008 while they registered their loansas securities with the SEC. Since then, for every loan made on a U.S. marketplace platform, the marketplace must file a prospectus for the loan with the regulatory body.

There is a modicum of risk in all investing. This is especially true with regard to marketplace lending, where most loans are unsecured, meaning they’re not backed by collateral in case a borrower defaults. Furthermore, marketplace loans are not insured, in contrast to bank deposits, which are insured by the Federal Deposit Insurance Company (FDIC).

On the other hand, like all investors, people who lend via marketplaces can decide on their tolerance for risk, and can make use of online automation tools to target the precise amount of risk they can tolerate.

Will marketplace lending replacing traditional lenders?

Marketplace lenders have seen massive growth: the sector has grown from infancy in 2006 to $12 billion in 2014, and is expected to reach $122 billion in loan origination volume by 2020.

On the other hand, the traditional consumer loan market issued $840 billion in loans in 2014, so it would be hard to say that marketplace lenders currently pose a significant threat to the banks. And some banks now buy loans on marketplace lending platforms, meaning some overlap between the sectors is emerging.

Many large financial institutions have made plans to build, buy, or partner to create their own marketplace lending offerings.

Is there a difference between marketplace lending and peer-to-peer lending?

Yes and no. The terms are often used interchangeably today, but there are technical differences between the two. Pure P2P lending is when individuals lend to borrowers, whereas marketplace lending platforms allow institutions to loan out money alongside individuals.

Will marketplace lending pose a threat to traditional credit cards?

Could be. Refinancing credit card debt is typically the number one use for consumer marketplace loans. And according to Nick Clements of Forbes, 78% of marketplace borrowers say they would recommend the industry to a friend, whereas just 9% of traditional credit card customers would do the same.

Of course, it is still too early to tell if marketplace lenders will ultimately pose a serious threat to the credit card industry, but customer-focused lending programs will likely cause the industry to adapt to changing times.

Swipe for charity: How mobile apps are enabling a future of giving

mobile donation apps

Perhaps the most astounding facet of the global mobile technology market is the sheer speed with which it continues to grow. Whereas a century ago it took 38 years for radio to reach 50 million users, and later it took 14 years for television to reach the same sized audience, the mobile phone industry has reached more than 2 billion people in less than 10 years. Mobile internet use has grown from 50 million global users in 2010 to 4.4 billion today, a number that is expected to hit 6.4 billion by the end of the decade (of which 5.6 billion are expected to be smart phones and other mobile technologies).

According to the 2016 Global NGO Online Technology Report, published jointly by the Public Interest Registry and nonprofit Tech for Good organization, online donations continue to lead the philanthropy industry, with 77 percent of millennials, 66 percent of GenXers and 54 percent of Baby Boomers prefer to donate to charity online. And although the report also says that just eight percent of donors would currently prefer to use mobile donation apps, that number is certain to rise as millennial users – individuals who often have no email addresses and have no recollection of a pre-mobile era – mature and enter the workforce in the coming years.

Of course, the expansion of mobile technologies such as PayPal and microfinance loan platforms such as Kiva presents new challenges to traditional financial institutions, but they also present opportunities for individuals and non-profit organizations trying to capitalize on existing micro-finance and P2P platforms to streamline donations. As far back as 2013, mobile donations represented about a quarter of charity given in the United Kingdom, a number that is certain to have grown  Last August, Facebook introduced a Donate Now button for non-profit organizations; websites like provides a Kickstarter-like platform for private individuals and small organizations to raise cash from a large number of small donors.

The ability to appeal to small donors has also led a slew of philanthropic-minded entrepreneurs to focus on for-profit business models for the benefit of non-profit organizations. One, Charity Miles, is a simple mobile exercise app that uses GPS technology to track the user’s exercise, and the company makes a donation (25 cents a mile for walkers and runners, 10 cents for bikers) to a charity of the user’s choice. Donations are made by companies like Humana, Johnson & Johnson, Timex Sports and Kenneth Cole, and there are several dozen organizations to support.

For instance, Britain’s Commonpence is a donation platform using the London Oyster Card, contactless credit cards and NFC (near-field communication) smart phones to allow commuters to donate spare change left over from train and bus travel in the United Kingdom. The model is simple: Using the touch payment technology of credit cards and devices that use RFID (radio frequency identification), Commonpence will create donation panels, to be placed in Underground stations and at bus stops around the UK, advertising the charity or non-profit organization they support. Commuters can tap or swipe the panels with any supported payment method, and the the spare change that is left on their transportation cards will be donated to the advertised charity. In the initial stage, the company has created a prototype panel to benefit Prostate Cancer UK; future beneficiaries include the Leukemia and Lymphoma Research and Lifeboats organizations.

More traditional charities are also making use of technology to expand their ability to help. In Israel,  Colel Chabad, an Orthodox Jewish organization provides pre-paid debit cards to poverty-stricken families. In order to maximize effectiveness, the organization partnered with local supermarket chains and with IsraCard, the local operator of MasterCard, to create a smart card that is only valid to pay for “legitimate” purchases of food and household necessities, but not for “frivolous” items such as tobacco or alcohol.

“Our goal here is to ensure that people who have fallen into poverty will be treated with dignity, and given the tools to escape from their predicaments,” said Rabbi Mendy Blau, Israel Director of Colel Chabad.  “A credit card allows them to make their purchases without any sense of shame or being different and also gives us the proper way to channel charity and monitor that it is being used in ways that will really help the beneficiary.”

Chabad officials say a mobile app is “on the way”, but have not specified a release date as of yet.

Photo credit: OnlineTradingAcademy

Peter Renton on How the Lending Club IPO changes everything

On the inaugural This Week in Crowdfunding podcast, David Stark and Zack Miller discuss all things crowdfunding.

First up, we do a hard-punching news roundup. We chat about Kickstarter’s recent rule changes, why the real estate crowdfunding industry is currently receiving so much PR, and a recent study that sheds some light on optimizing crowdfunding campaigns.

lendacademy's lend academyWe interview Peter Renton of LendAcademy and the Lendit conference, who’s a true pioneer in the marketplace lending industry. We ask Peter on where the industry is headed. Pay attention to Peter’s description of the rumored, upcoming Lending Club IPO and how he expects this to be a seminal moment in the crowdfunding industry.

Lastly, in our product review section of the podcast, we take a closer look at NickelSteamroller which is a great site to both analyze the marketplace (p2p) lending industry in general, as well as analyze individual securities at the portfolio level.

That’s a wrap for the first of what we hope to be incredibly engaging and informational podcasts we’ll be publishing weekly.

Listen to the FULL episode

Investing in people with potential — with Upstart’s Dave Girouard

upstart lending

What if you’re a recent Stanford college grad with a computer sci degree and need to borrow money? (crickets)

What if you’re an investor and would like to be able to loan to these (future) high performers? (Upstart…)

Dave Girouard, co-founder and CEO of Upstart, joins us on the Tradestreaming Podcast today to talk about how his firm is enabling lending to — and investing in — young, high potential people who haven’t had enough time to build out a long credit history.

Listen to the FULL episode

About Dave Girouard

urlDave is the co-founder and CEO of Upstart.

More resources

Even More Resources


Get off the investment roller coaster by getting the Lending Club gospel

Lending Club produced a nice new video I liked and thought you’d appreciate seeing.

In 5 years, the firm has underwritten over $1B in peer-to-peer loans and is on fire. As I’ve written before, I believe the direct personal loan is on its way to becoming a new asset class in investor portfolios, thanks to Lending Club.

Additional resources

  • Listen to my interview with Lending Club founder and CEO, Renaud Laplanche

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Lending Club grabs the moola, gets Meeker

Looks like I’m not the only converted believer in the rise of peer to peer lending as an asset class…mary meeker of kleiner perkins invests in Lending Club

Lending Club, which commands about 75% of the market for p2p loans, landed a strategic investor today. Mary Meeker, formerly the technology axe for Morgan Stanley and now a partner at Kleiner Perkins (KPCB), is leading a $15M investment and will join the firm’s board.

Why is this important?

  • Lending Club has now raised over $100M
  • this brings LC’s total unrestricted cash to almost $50M
  • LC has originated over $650M in loans and is adding something like $135 million each quarter
  • it’s just a huge approbation to the viability of LC and the p2p lending industry in general

Lending Club’s CEO, Renaud Laplanche (who’s scheduled for a future episode of Tradestreaming Radio) had this to say about Meeker:

“Kleiner Perkins is virtually synonymous with breakthrough brands we love like, Google, and Twitter. Mary’s unique depth of experience across both the financial industry and with the Internet’s category leaders will be instrumental in Lending Club’s continued growth and mainstream adoption,” said Laplanche. “We are thrilled to welcome both Kleiner Perkins and Mary as our new partners.”

I love it when things get interesting.


9 ways to improve your investing performance in P2P loans

Source: Federal Reserve,

Yesterday, I discussed why I’m now a believer in peer-to-peer loans as a new asset class for investors.

Now, I’d like to look at how investors can lower their risks of defaults on these types of loans and boost their overall returns.

The problem with P2P loans

Like in most areas where information is asymmetrical between two parties entering a transaction, p2p loans present an informational problem.

Borrowers know a lot more about their potential to repay a loan than those making the loan.

In a traditional banking relationship, banks have resources to attach a number (a credit score) to a loan. Given experience and data, banks can estimate the probability that a borrower with that number will default. It’s an imperfect solution but works (at least, most of the time).

Borrowers on p2p marketplaces like aren’t given an actual credit score. Instead, they’re grouped into categories of credit worthiness which further complicates our ability as investors to assess their ability to pay us back.

Also, because multiple investors invest in the same loan, each individual investor may lack the incentive to do proper research (free rider problem).  That’s according to Do Social Networks Solve Information Problems for Peer-to-Peer Lending? Evidence from

How social networks help investors better their returns

To mitigate this problem, p2p loan marketplaces have created their own versions of social networks where borrowers can friend people and organizations.

And you guessed it — these groups are key to helping us investors determine the chance that our investments pay off (or don’t).

Why? Because research has shown that borrowers with friends on these investment platforms are:

  1. more likely to get their loans funded (not necessarily a good thing — we want borrowers to get funded and be more likely to pay).
  2. less likely to default on their loans (bingo!)
Why? It’s all about signaling.

The results suggest that verifiable friendships help consummate loans because they are credible signals of credit quality

Source: Judging Borrowers by the Company They Keep: Friendship Networks and Information Asymmetry in Online Peer-to-Peer Lending

We want to invest in loans that provide us with a good return but are also the “right” type of borrower. Using friends and endorsements are key to solving this issue.

We show that borrowers with online friends on the platform have better ex-ante outcomes. This effect is more pronounced when friendships are verifiable and friends are of the types that are more likely to signal better credit quality. The results are consistent with the joint hypothesis that friendship ties act as a signal of credit quality, and that individual investors understand this relationship and incorporate it into their lending decisions. To further pin down why friendships matter, we examine whether friendships are related to ex-post loan outcomes. We find that borrowers with friends, especially of the sort that are more likely to be credible signals of credit quality, are less likely to default.

9 ways to improve our chances investing in P2P loans

Continue reading “9 ways to improve your investing performance in P2P loans”

Why I’m a converted believer in investing in P2P loans

If you’re like millions of people, you’re probably worried about your net worth.

Pretty worried.

The market’s up and then, it’s down. Jobs are being created and lost. Banks are stable and then they lose $3B seemingly overnight. And politicians? Nobody seems to have a strong plan to get us through and certainly not the political will to see it through.

It’s not entirely clear if the economy is recovering or not.

Investments: riskier, less diverse, zero confidence

If you have investments, you’re probably experiencing the following:

Volatility spikes: The market has the great ability to lull people into a false sense of security and then, wham! You get periods like the beginning of May where it feels like the world is ending. Nothing looks good right now. Nothing feels right, either.

Diversification doesn’t seem to be working: It may be exchange traded funds doing it or just a general move towards passive investing, but all types of investments are moving more in tandem. When stocks go down, they bring down other “safer” assets. The theory of diversification isn’t providing the benefits it promised. That’s where we are — when things are bad, it seems that there is nowhere to hide.

Lack of confidence in reaching financial goals: Many investors are just throwing up their hands. No más. They feel the stock market is rigged (it is, somewhat) and don’t want a part of it. But in an environment where bonds and CDs pay so little, underfunded-for-retirement investors need to reach for more risky assets and are forced to play a game that they don’t want to play.

What if I could tell you that you can triple the returns on the fixed income (bonds) part of your portfolio without taking on more risk?
Continue reading “Why I’m a converted believer in investing in P2P loans”