A new approach to new finance
CONOR DEVINE MRICS
CO FOUNDER CLEARPATH FINANCE
This week I read a great article on Entrepreneur.com, "Here is Why Customer Acquisition is Still a Challenge for Alternate Lending Platforms".
Alternative lending is what Clearpath Finance is all about. We established Clearpath in 2017, in a direct response to the liquidity problems facing the Irish and the UK economies in the years following the global financial crisis and the property and banking crash of 2008.
One of the challenges many of these alternative lenders face right now centres on customer acquisition and also customer retention. The good news is we have invested quite a bit of time and money into this side of our own offering, which is now bringing value not only to our extensive panel of alternative lenders, but also to our new customers.
But first, let's look at Uber and Airbnb.
Think of these companies like this.
- Uber is in the taxi business, taking people places.
- Airbnb is in the real estate business, where people rent out properties they control (or even just beds in those properties).
However, despite Uber being in the taxi business and Airbnb being in the real estate business, Uber owns no cars and Airbnb owns no real estate!
When it comes to alternative finance and lending, it is true that there are lots of online lending platforms. You can have as many as you like, but if they have no customers, then they won’t be in business very long!
One of the main reasons my business partner at GDP Partnership, James Gibbons, and I established Clearpath Finance as an alternative lending platform was the opportunity to be a route to market for all these new alternative sources of finance.
Speaking to Entrepreneur in that article mentioned above, Satyam Kumar, who is the co-founder and CEO of a company called LoanTap, says that even though fintech organizations have good technology orientation, they lack the skills required to assess the credit needs of customers:
Thus [these alternative finance companies] merely act as marketplaces or online sourcing partners of the existing banking system. The value addition provided by them in actual loan processing is very limited. While the customer gets the ease of reaching to the bank through an online mode, riding on the technology of these fintech organizations, they are still stuck with old conventional loan products of the existing banks and financial institutions.
This is a challenge, we firmly believe, that Clearpath Finance can help both alternative finance companies and companies who require finance to overcome.
James and I are business professionals, with more than 50 years' experience between us in finance, property and law. We have assembled a team of multi-diciplined professionals with knowledge of this sector and more importantly a drive and enthusiasm to help our customer base reach new sources of capital.
A number of years ago, we recognised the direction in which the finance industry was headed, with technology banks entering the market and disrupting the way money is borrowed. We also know what makes people tick, so we were very confident in the fact we could add a lot of value on both sides of the equation, both to the funder and to the customer.
What we now have in Clearpath Finance is a business that is much more than just a cold brokerage service looking to place finance deals to get a quick fee. I personally wouldn’t get out of bed in the morning if that was the goal of the firm!
Clearpath Finance has its own credit committee which reviews and challenges every proposal robustly on a weekly basis before we send our approved proposals to our panel of funders or chosen funding partner. This is why we have been so successful in such a short space of time, as we have all of the questions answered in the application before the questions are even asked!
What this does mean for both sides in any alternative finance arrangement?
For the lender
Our process takes all the pain away from the lenders, who receive funding opportunities that are oven ready, having already been through our own stringent internal review and due diligence processes.
For the borrower
Our proven application process can ensure that a finance application goes from application to an approval in principle in 48 hours, and all the way to drawdown on many occasions in a number of weeks depending on the complexity of the case. The challenge for the more mainstream traditional banks is that they have yet to adjust to the new sphere of lending as their processes are still quite cumbersome and time-consuming.
In this modern world we now live in, it’s all about the speed of a funding decision, moving it through the legal process and onto drawdown as soon as possible. At Clearpath we continue to refine this process and challenge ourselves rigorously which has had a very positive impact on our firm, and ultimately a very positive impact on our funding partners and our customer base.
It has been said of late by some of our funding partners that this is what is unique about our business, and is why we have been so successful in such a short space of time. It probably has something to do with the fact that so many lenders right across Ireland and the UK now want to work with us.
Having started in 2017 with one funder in place, we are now working with a panel of over 50 funders, all of whom are well capitalised and keen to find viable business operations to lend to.
And here's the thing we're most excited by...
Clearpath Finance is solving problems at both ends of the finance spectrum, for both alternative lenders seeking to lend their capital, and viable businesses with solid accounts, business plans and projections seeking to borrow money and grow their business.
We are now the No.1 Alternative Funding platform in Northern Ireland, growing our business rapidly in the Republic of Ireland and also through our office in Manchester, continue to grow our offering in mainland UK.
If you are interested in hearing how Clearpath Finance can help your business from a funding perspective, please call our team on 0333 0042 888.