Here's Why Alternative Lenders Are Here To Stay
Despite an avalanche of negative press in recent months from companies such as LendingClub Corp (NYSE: LC), the alternative lending space still has plenty of life left in it. In fact, most people watching the space haven't realized the true value alternative lenders provide the economy, according to an industry expert.
Glenn Goldman, CEO of the small business lender Credibly, said in a recent interview that in the past 10 years, alternative lenders have "reduced the cost of funds to consumers by probably hundreds of millions of dollars."
The availability of capital from online lenders in the wake of the 2008 financial crisis and the current slump in credit have been a "significant soulful benefit" to the U.S. economy, said Goldman.
"Those savings either actually go into true savings or go back into the economy," Goldman said. "Over that same period of time, providers of capital to small business have made sure that small businesses that historically weren't able to access capital were able to access capital."
Goldman continued that the capital injected by alternative lenders allows businesses to expand and hire, noting that 60 percent of the U.S. labor force is employed by small businesses.
"The problems that we're solving, like access to capital for small businesses, the ability for folks who have student loans to lower their cost of student debt, the opportunity for consumers to lower the cost consumer debt...are very, very real and present. The need to continue solve these problems doesn't go away," Goldman concluded.
Credibly itself has lent over $300 million to 7,000 small businesses across the country.
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