After JPMorgan Chase and Wells Fargo, Citigroup also dips toes in the online lending business
Published By: Angela Campbell on January 29, 2017 09:03 am EST
Citigroup Inc. (NYSE:C) has launched a small business lending website with not much hype, according to Reuters. The lending platform is launched in the wake of growing technology-friendly tools that customers can use to apply for loans.
According to the sources, the loans provided will have an amount up to $1 million. Citigroup enters the online-lending market place after several other of its peers have shown interest. For instance, JPMorgan Chase has partnered with the online lender, On Deck Capital Inc. over a year ago; whereas Wells Fargo also launched a platform to approve quick loans for small businesses.
Initially, the banks hesitated toward entering the online lending business as it required separate workforce. After successes seen at Lending Club, On Deck, and Prosper, these banks gained some confidence of investing in the fintech arm.
Citigroup has integrated with a New York-based start-up, Biz2Credit. Currently, customers are directed toward the website, where they fill up a form on lending requirements. Afterwards, a Citigroup credit officer would follow up with the applicant. It can be seen as a preliminary entry by the bank to gauge if the popularity of online lending amongst small businesses is growing.
The reason why Citigroup has not marketed their interest in online lending is because the response needs to be first tracked. The bank is expected to share the affiliate share from the customers referred to Biz2Credit. CEO of Biz2Credit, Rohit Arora, said: “If you make a premature announcement the expectations go very high and then you're in the public eye all the time.”
Biz2Credit was founded in 2007 running under Nexus Venture Partners. It has made loans of over $1.2 billion to small businesses. The company advertises that it provides loans within 24 hours of application. Some of the products include SBA loans, Equipment financing, and commercial real estate loans.