The partnership will allow the bank to use Fundation’s technology suite to assist small businesses that do not meet Fifth Third’s current loan-eligibility guidelines. With Fundation’s platform, the bank can underwrite businesses it previously would have difficulty reaching., Bank clients can apply for loans ranging from $10,000 to $100,000, through Fundation’s tools.
Shawn Wheeler, senior product manager at Fifth Third Bank, told Bank Innovation that by partnering with Fundation, the bank is able to simplify the application process and enhance access to capital.
“The application process now takes them 10 minutes, a large percentage of the times [SMEs] get a decision in a few days instead of a few weeks,” Wheeler said. “They’re not waiting anymore.”
He added that the new process allows small business clients to accept or decline their loan offers online and sign an agreement electronically, automating most of the process.
“At Fundation, our mission is to enable our banking clients to give their small business customers the best of both worlds — great products at great prices, along with the modernized experience they expect in the digital era,” said Sam Graziano, CEO of Fundation, in a statement.
A 2019 Forrester Research study outlined how SMEs are often overburdened by the length and complexity of sign–up and underwriting processes at banks. On top of that, loan-approval ratings for SMEs are low. Big bank approval of small business loan applications sat at just 28%, according to January 2020 data from Biz2Credit.
“Small and mid-sized business clients account for more than half the revenue we see, compared to retail customers,” said a digital bank executive who was quoted in the Forrester study. “We only budget about 10% of our digital spend for anything having to do with digital services for our business customers.”
The partnership with Fundation will allow Fifth Third to reach more businesses, compete with online-only providers, and improve its digital experiences and solutions for customers.
“It lets [Fifth Third Bank] help local businesses and local communities to expand; we give them that opportunity,” Wheeler said.
Based in Reston, Va., Fundation was established in 2011. The company is an origination solutions provider focused on the small business market. It offers technology and application processing services to support more than 25 financial institutions.
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