Close this search box.
Close this search box.

Marketplace Lending to the Rescue

Where SMEs can go for financing when banks won’t play ball.

Tighter-FramedA decade ago, Frank McDonnell, owner of TurnStyle Brands, a Portland, Oregon-based distributor of premium outdoor scooter products, thought he had a good relationship with his local bank. And why not? Before starting TurnStyle Brands, McDonnell was a banker himself, a portfolio manager for Deutsche Bank. He thought he knew the business.

That was then. After the financial meltdown of 2008, McDonnell’s banker started ducking his calls. Loan applications that used to take weeks now took months; and despite meeting additional documentation requirements, TurnStyle Brands was usually turned down. Applying for an SBA-backed loan was even more frustrating. Then, the CEO got an email from Amazon. If TurnStyle Brands needed credit, the online retailer could help. McDonnell hadn’t even known Amazon was in the commercial-credit business.

It was this former banker’s introduction to an entirely new set of alternatives, non-bank financing for small businesses, all of which can be lumped under the general heading of “marketplace lending” (see sidebar, “What is Marketplace Lending?”). Amazon turned out to have an aggressive lending program, especially for vendors like TurnStyle Brands, which was doing a seven-figure annual business on Amazon. Within 24 hours, TurnStyle Brands had an unsecured $100,000 loan with regular payments over a six-year term at 14 percent interest.

Today, technology, innovation and Big Data are making possible a new, more affordable generation of financial services specifically suited to small- and medium-sized enterprises (SMEs) that remove banks and credit card companies from the transaction. The development comes at a time when SMEs are ill-served by traditional banks.

Consider access to capital. Only 39 percent of companies with revenues of less than $5 million succeeded in securing bank loans during the first quarter of 2014, according to the Pepperdine Private Capital Access Index report. In fact, despite a net loosening of credit for big businesses, lending standards for small businesses tightened in 2011 and 2012—a trend expected to continue as banks pursue the largest and most profitable loans. (See sidebar, “Tighter Lending Standards.”)



  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events


    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)


    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.