Chapter 10Capital Guides—Online Resources to Find, Coach, and Assist Borrowers and Lenders
It was inevitable that financial activity would move into the digital sphere, since the Internet offers so many options to scale this business in a variety of ways. Whether or not transactions actually get negotiated online, it makes sense to start matchmaking or processing online. In fact, one of the earliest success stories of financial innovation online was mortgage broker LendingTree.com, which provided users with a portal to obtain a mortgage loan from the convenience of their homes.
Gathering residential mortgage applications and sorting the various offers from competing lenders was a natural place to start brokering online. Why? Because mortgage loans are heavily regulated and standardized. They all have the same application form, disclosure requirements, and a limited range of options. All mortgage lenders ask for almost the exact same information and documentation from applicants in this very homogeneous market.
But business loans are all over the map and funding may be provided by an alternative financing vehicle other than a loan. Business funding applications may require many different sets of information based on the lender’s credit culture, transaction size, funding purpose, business location, and so on.
But designing a platform with so many more moving parts required a clear idea of how to monetize whatever would come out on the other side. Given the range of activities ...
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