Commitments totalling more than $200 million will help StreetShares focus on its mission to provide loans to veteran-owned small businesses.
Community Investment Management (CIM), Direct Lending Investments, and Eagle Bank Corp will team up to fund $200 million in small business loans over the next four years. Talking about his company’s determination to “put money to work fueling healthy small businesses,” Direct Lending Investments president Brendan Ross said that “marketplace lending is exploding. We are excited about this business partnership with StreetShares and the unique business owners they serve.”
Jacob Haar, CIM managing partner, praised StreetShares’ “responsible and transparent financing to underserved small businesses,” and added that the company’s approach to lending to veteran-owned small businesses would be a positive “long-term value for borrowers, local communities, and investors.”
StreetShares is a peer-to-peer, affinity-based, social lending marketplace that matches accredited investors with eligible small business borrowers. Businesses can apply for loans online or by phone and get preapproved within 24 hours. Companies then provide verification documents and prepare a “business pitch” StreetShares calls “your storefront on the StreetShares marketplace.” Investors on the platform will rely on the company’s “business pitch” in order to decide whether to bid on the company’s loan. Competing investors “win” the right to fund the loan by providing the lowest interest rate.
Applying businesses must be revenue-positive and in operation for at least one year. Loan terms are one and three years for amounts up to $50,000. There are no application fees or prepayment penalties, and funded businesses pay a one-time origination fee between 1.45% and 4.95%. Repayment is managed via a fixed weekly deduction from the company’s verified bank account. Investors on the platform must be “accredited”—meaning individual income of $200,000 or more ($300,000 with spouse) or a net worth of at least $1,000,000, excluding value of primary residence.
According to the company, the majority of its borrowers are small businesses owned by U.S. veterans. Via the platform, StreetShares considers itself the biggest coalition of veteran-based small businesses and service providers in the country. Mark L. Rockefeller, StreetShares CEO who co-founded the company with Mickey Konson, is himself an Iraqi War veteran.
StreetShares made its Finovate debut at FinovateEurope 2015 in London this February. See a live video of their technology demonstration here.