[1StopFunding]

Nice article by Sean that was in my FB Timeline.

http://www.merchantprocessingresourc...ness-lending/;)

[DirectMedia_Scott]

Nice article by Sean that was in my FB Timeline.

http://www.merchantprocessingresourc...ness-lending/;)

Check your link? Isn't working for me.

[ADiamond]

Check your link? Isn't working for me.

take the smiley face off the end.

http://www.merchantprocessingresourc...iness-lending/

[Sean Cash]

Nice article by Sean that was in my FB Timeline.

http://www.merchantprocessingresourc...siness-lending)

Thanks. It's been a very thought provoking conference. It was great to see that our particular industry had representation here. CAN Capital, OnDeck, Kabbage, Merchant Cash and Capital, Strategic Funding Source were all exhibiting. Most of them also spoke on panels. Those companies continue to be the ones that represent who we all are on the national stage.

[MCAVeteran]

Any takeaway from those companies on their direction moving forward as far as direct vs broker models? As more technology and web presence for marketing is done, it appears that's a large part of future acquisition for those companies

[Sean Cash]

I think more and more there is a push towards strategic partnerships for referrals

[isaacdstern]

I hear that...the cost of marketing and originating has skyrocketed...the top spot for "Business loans" on Google when we tarted was $5 per click...today its $30+ per....

[JayBallentine]

Sean,

Great article. However, I think one things begs clarification. Rohit Arora said; “many customers want someone to talk to at some point in the transaction.” You posited that Gary Chodes took a dissenting view. It seems that Rohit was speaking to the customer service aspect. Even Kabbage finalizes 50% of it's deals by phone. However, Gary is right. Human involvement in underwriting is completely ridiculous.

We're exposed to a company who is using predictive analytics to help Universities accurately target and retain those students who are most likely to drop out. If they can do that using a wide range of disparate and seemingly disconnected data sources, then surely underwriting can be automated.

[MCAVeteran]

The automation already happens today- on decks press said 30 percent is human underwriting. On larger deals you aren't going to automate it 100 percent.

[MCNetwork]

Gary Chodes' opinion that "human involvement in underwriting is completely ridiculous" stems from his statement that "if you look back over the last 20 years, the loss rates on business loans under 24 months has been really low." He is obviously referring to term bank loans (many of which are backed by collateral) and not merchant cash advances. MCAs have much higher loss rates and that's why human intervention has to come into play.

[Sean Cash]

Here's another story I put together from the events of the 2nd day.

Alternative Lending: Big Government and Big Data
http://www.merchantprocessingresourc...-and-big-data/

My apologies to anyone that has left voicemails on my office phone this week. I won't be back in the office until May 12th.

[Capital Stack]

Sean awesome piece thanks for the play by play.

Here's another story I put together from the events of the 2nd day.

Alternative Lending: Big Government and Big Data
http://www.merchantprocessingresourc...-and-big-data/

My apologies to anyone that has left voicemails on my office phone this week. I won't be back in the office until May 12th.

[Joseph Esparza]

"The only dissenting voice was Gary Chodes, the CEO of Raiseworks who seemed to be of the belief that human involvement in underwriting was nothing short of ridiculous. He stated that, “if you look back over the last 20 years, the loss rates on business loans under 24 months has been really low.” To him, that data seemed to be proof enough that complete automation could and should be achieved, though he admitted to performing back-end checks such as landlord verifications. They currently have no physical underwriters however."

Second article I read this week (Kabbage) that mentioned and stood behind data aggregation as serving efficiently enough to measure risk without human intervention, even on the eCommerce platform - one that most Funders shiver at the thought of.

[MCAVeteran]

What's kabbages average deal size? What's the 30 percent human factor deal size baseline on deck thinks is necessary? I do think certain deal sizes will become fully automated the question is what's the cutoff before human underwriting has to get involved.

[Joseph Esparza]

What's kabbages average deal size? What's the 30 percent human factor deal size baseline on deck thinks is necessary? I do think certain deal sizes will become fully automated the question is what's the cutoff before human underwriting has to get involved.

I think the interesting point made here is that Landlord verification seems to be the only human part that remains (as per current qualifying methods). And, that Data is compiling so quickly that humans will fail to recognize patterns that, irrespective of the amount, would tell the tale of a likely default - or vice-versa. I'm not sure about their average deal size, but they micro-fund and it seem to be performing - not to mention that according to this weeks article, its a streamline process taking only minutes to access...again, Data Compilation.

[ADiamond]

What's funny is every single person and company interviewed admitted in one way or another that underwriting will never be able to lose the human element 100%.

If the sales reps & merchants didn't make so many clerical errors on the documents and I didn't have to spend so much time going on a scavenger hunt for all the files and correct info then revise contracts and have them signed and faxed again - basically, IF EVERYTHING WAS IN ORDER, i'd be able to underwrite a deal without error in at most 30 minutes, hypothetically speaking - I'd be able to put through 15 deals in an 8 hours work day.

[Joseph Esparza]

Now that was a refreshing rebuttal!