What is the role of mission-based lenders?
The challenges that arise from high-cost alternative loans illustrate that access to capital does not necessarily support economic prosperity. Even for those who access responsible finance products, financing is just one component of an entrepreneur’s journey toward long-term economic stability and resilience. What else should mission-driven lenders do to meet these challenges?
- Lending innovation: alternative finance products fulfill an important demand—to keep the doors open in the case of a pressing financial need. Mission-based small business lenders must better meet that immediate need before entrepreneurs turn to costlier options. For example, Opportunity Fund has a partnership with Lending Club that automatically pre-qualifies applicants for an Opportunity Fund loan, based on the data they provide through their Lending Club application. Accion is working with Common Cents Lab to use behavioral science research to help small business owners get through the application process, and is working withSalesforce, Cloud Lending and DemystData on a major innovation project to reach more business owners and improve the online application experience.