21–28 of 28 posts
It's the kind of situation that can lead well-intentioned people to make bad decisions.
It’s great to see more startups in this space. I created a factoring product and now focusing on Buy Now Pay Later.
I generally try to be encouraging of people putting themselves out there to create something new, but I'm worried that you're creating a pretty serious moral hazard for the founders you're trying to help. It's the kind of situation that can lead well-intentioned people to make bad decisions.
Does this imply you expect to fund 100% of the loan book? Or dynamically assign individual loans between Level and other debt funders? (I spent a period as CRO of a fintech lender... As our loan book grew, much of our energy went on managing the various debt covenants. They made sense for a steady-state portfolio, but were a real impediment to profitable growth... Please do reach out if you'd like to talk further; my…
We will definitely reach out in the coming weeks.
Is there reason to be a lending company for other lending companies rather than just lending directly and using the innovative founder types as franchisees of a sort?
When lending to an end borrower, a lender is often focused on their ability to underwrite the borrower to understand the risk of the loan. We think it's very unlikely that Level could become the best underwriters of all the different types of borrowers in the world by lending directly. Instead, the most innovative founder types in the lending space are often finding creative ways of using non-traditional sources of d…
Cool idea! I wish you guys existed a few years ago. What loan management systems do you integrate with? They can all be so wildly different that normalizing over all of them is a great accomplishment. Being a marketplace for lenders to credit warehouses could be neat. You can get data from the LMS, normalize it, show a bunch of credit warehouses at the same time, and see who offers the best deal. That's a cool vision…
You know the space well and it seems like you get the vision. We've found little overlap between customers in terms of LMS. Most use spreadsheets or build something in house. I imagine this will change in the coming year or two. BTW, if anyone wants to build a universal LMS or a Plaid for LMS I think it's the right moment. We've had investors ask why Pipe doesn't just do this and we respond with, because it's a just…
How standardised are the loan management systems that you can track loan performance in real time? Seeing that you mention spreadsheets. Is that viable for you? In the UK most companies track using spreadsheets, which is a mess. Agree on a decent LMS being an opportunity.
Is this targeted primarily at smaller lenders? I suppose most likely smaller ticket cash flow lending?
Very interesting!
Earlier quoted context omitted.
You know the space well and it seems like you get the vision. We've found little overlap between customers in terms of LMS. Most use spreadsheets or build something in house. I imagine this will change in the coming year or two. BTW, if anyone wants to build a universal LMS or a Plaid for LMS I think it's the right moment. We've had investors ask why Pipe doesn't just do this and we respond with, because it's a just…
For LMS, we use LoanPro: https://loanpro.simnang.com/ Canopy is a recent new entrant: https://canopyservicing.com/ Using a vendor for LMS added some complexity (integration is a pain, idempotency is a concern, etc), but it helped us focus on things that differentiate our business. We certainly wouldn't have launched five months after founding without one. I've talked to some startups that built an in-house LMS. The m…
> I've talked to some startups that built an in-house LMS. The moment a payment reverses or someone backdates a payment or they backdate a loan change or modify a due date... they have big problems.
Edit: do you think Loanpro or Canopy are viable for larger longer term loans? +$1m +3yr type cashflow lending?
Earlier quoted context omitted.
For LMS, we use LoanPro: https://loanpro.simnang.com/ Canopy is a recent new entrant: https://canopyservicing.com/ Using a vendor for LMS added some complexity (integration is a pain, idempotency is a concern, etc), but it helped us focus on things that differentiate our business. We certainly wouldn't have launched five months after founding without one. I've talked to some startups that built an in-house LMS. The m…
Do you think Loanpro or Canopy cater for below issues? I've worked with teams who built in house and smashed into those issues. Very complex. Ncino seems to possibly be viable, but is too generic and broad. > I've talked to some startups that built an in-house LMS. The moment a payment reverses or someone backdates a payment or they backdate a loan change or modify a due date... they have big problems. Edit: do you t…
Peach Finance is another option that came out recently: https://www.peachfinance.com/