[MCNetwork]

I don't think anyone's desperate to put money out there without doing the proper homework and having some confidence in knowing it'll coming back.

You'd be surprised. There are lenders who are under the gun to keep funds in play and grow their book and they're relaxing their underwriting guidelines. On Deck is one that comes to mind.

[staten]

I don't think anyone's desperate to put money out there without doing the proper homework and having some confidence in knowing it'll coming back.

Wrong-therein lies the problem! Everyone is look for yield and PE backed companies are looking for growth regardless of profitability.

[MCNetwork]

Wrong-therein lies the problem! Everyone is look for yield and PE backed companies are looking for growth regardless of profitability.

Yes. There are some high profile companies that are flushed with venture capital and their only mandate is to grow at super speed so they will be poised for an IPO. On Deck is following the Square model. Square is the mobile payments company founded by Twitter co-founder Jack Dorsey that is growing like gangbusters but has yet to turn a profit. But once they go public, Mr. Dorsey will add another billion to his net worth.

[MCAVeteran]

Build and sell- who's next.... Add in the fancy technology and put lipstick on it-

[Capital Stack]

Gini, I completely agree with you. Teaching the algorithm can be more resourceful and accurate than a human underwriter just using there best judgment. But I also agree with still doing the verification call as an important step in the final process.

If not an algorithm, how do you calculate risk or provide risk based pricing? Your good judgement? It's not that you don't have a human underwriter confirm and verify the inputs to the scoring/risk model; and interviews are part of that process. But to say that you can tell if a person "knows their business" from an interview and therefore is credit worthy is a joke. The merchant interview is a 0/1. If the guy is sketchy, you don't give him anything, otherwise you fund according to the model. I hope everyone is just kidding here and that you're not 'lending' money on your good judgement.