Rising interest rates and uncertain market conditions have caused many banks and credit unions to tap the brakes on loan approvals, making it harder for borrowers of all types to gain credit.
Limited access to traditional loans is impacting consumers and small and medium-sized business (SMB) loan applicants sharply. Federal Reserve surveys suggest more than half of U.S. banks have tightened lending standards for consumer lending — including credit cards, car loans, personal lines of credit —while many also ratcheting up approval criteria for small businesses.
Non-bank AltFi lenders have stepped in to provide more accessible consumer and SMB loan products, hoping to fill the gap in loan demand in both sectors. Already, around $50 billion of US. personal loans are fintech backed.
AltFi lenders realize there’s an opportunity to engage two deeply underserved markets by offering innovative lending products geared toward both personal finance and new and growing businesses.
While the need is there, launching a business in this space can be challenging. AltFi lenders must balance product innovation, customer experience, and regulatory compliance as they enter and navigate the marketplace.
For new fintech lenders in particular, finding ways to establish and effectively scale their loan products — so that businesses and consumers who need them can easily find and use them — may feel daunting.
Fortunately, there is help: Q2 Digital Lending.
With Q2’s automated platforms, AltFi lenders can effectively scale and market their business, while providing a seamless, convenient, and safe loan experience for their customers.
Don’t reinvent the wheel
The Q2 Digital Lending platform is a digital-first, cloud-based solution trusted by nearly 100 of the top global non-bank lenders — including fintechs, captive finance, and embedded finance — to launch, operationalize, and scale their portfolios.
Q2’s flexible loan origination workflows, reliable loan servicing engine, and branded borrower portal accelerate time to market and reduce operational expenses while also providing enterprise-grade security and reliability.
With Q2, non-bank lenders can more easily scale and customize their product offerings, ensure their operations continuously meet industry-specific compliance regulations, and position themselves to pivot quickly to meet their customers’ changing needs.
Curious what this looks like in action? Here are three examples of innovative non-bank lenders that have leveraged the Q2 Platform – while in their startup phase - to effectively serve SMBs and consumer finance clients, while successfully scaling their lending business.
Success stories
Knoma delivers no-interest, no-fee loans for adults seeking post-secondary continuing education.
Key Results:
- Using both Q2 Origination and Q2 Servicing, Knoma automated its loan application and approval process to align with its underwriting and risk criteria — leading to real-time decisioning in under two minutes for 90% of applications.
- Through automation, Knoma scaled its business quickly, while also providing best-in-class loan processing services to its clients.
- Participation in the Salesforce ecosystem made accessing supplemental technology supports, including ID verification and document signing, seamless.
Client Feedback:
“It would cost me hundreds of millions if I spent all my time trying to build this kind of system from scratch — and it would take years to do it. Q2 did all that for me.” — Brett Shanley, Knoma CEO and Founder
Pioneer Military Credit provides personal loans for active-duty military members.
Key Results:
- The inherent configurability of the Q2 Lending platform dramatically streamlined system modification timeframes — in one instance, Pioneer Military Credit’s team made changes in 45 days that had previously required months to complete using traditional coding.
- Thanks to lending automation, Pioneer’s customers can now receive loan offers in seconds and decisions in minutes — and get their money the same or next day.
- Added efficiencies allowed the firm to quickly expand into new markets, without requiring additional staff.
Client Feedback:
“Q2 is the best software company with the best process I’ve been involved with in any of the startups I’ve done in my career.” —Pioneer CEO Aaron Handke
Agrifunder funds agribusiness and livestock operations in Australia and New Zealand
Key Results:
- Utilizing Q2 Origination and Q2 Servicing solutions saved Agrifunder both time and money, eliminating the need for costly internal system development and ongoing maintenance upgrades.
- Loan automation enabled Agrifunder to speed time to market and quickly scale its business.
- Q2’s platforms delivered branded portal access directly to Agrifunder’s customers.
- The Q2 platform’s convenient user interface skillfully catered to fit both staff and customer needs.
Client Feedback:
“Because of the ease of Q2’s workflows, user interface, and design, training staff is almost non-existent. And if we need to ramp up more staff, they can learn quickly. Similar ease of effort will be experienced by our customers, too.” – Damian Burgi, Agrifunder co-founder
Capitalizing on potential
As these case studies show, by leaning on existing tools — including platforms like Q2 Origination and Q2 Servicing — non-bank lenders can streamline the launch of their products, bootstrap their operations, deliver a tailored customer experience, and spend their time where it belongs: growing their portfolios.
The timing has never been better. The market need is there, as traditional banks and credit unions focus on building deposits and shift away from consumer and SMB lending.
Interested in exploring how Q2 products could support your AltFi lending goals? Reach out to learn more.
