Lendhub: New Level Non-Bank Lending
Lendhub: taking non-bank lending to a new level
As the Silicon Valley Bank collapse threatens traditional lending, there could be an opportunity for Lendhub to take non-bank lending to new heights.
The SVB crash triggered the second-largest bank collapse in history. The problem is that bad news travels fast, and bad news about money travels faster. An unchecked bank run quickly spreads and engulfs an entire sector.
Lending is one of the banking activities that suffers in a banking crisis. When banks need to hold on to their deposits, the last thing they want to do is push money out. An exception is if they have to do beneficial deals, such as paying as little as HSBC did to acquire SVB’s UK division.
A banking crisis is never good if you are a business person and operate in sectors where large amounts of money are needed for projects (such as real estate). But the latest banking crisis may be the next moneymaker for Lendhub and other alternative non-bank lending industry operators.
SVB’s collapse: the unintended catalyst
The SVB collapse had an unintended but positive impact on companies such as Lendhub, which are involved in non-bank credit financing. Regulators and even US President Joe Biden are promising stricter rules for traditional banks to prevent a recurrence of the latest collapse. New rules mean borrowers will face tougher loops to qualify for loans. This is sweet music to the ears of non-bank lending companies like Lendhub.
Business is picking up fast. Law firm Akin Gump Strauss Hauer & Feld advises clients on taking non-bank loans and has seen an uptick in inquiries about its non-bank lending options. Other companies in this space, such as Applied Real Intelligence, are already talking to several startups with valuations above $ 1 billion.
Lendhub’s non-banking role going forward
SVB's collapse may have dried up funding for tech startups, but these companies are not the only ones that will start exploring new options. Non-bank bridge, refurbishment, and development financing providers for the real estate sector may become the first point of contact for developers and individuals seeking these loans.
These companies now have a chance to establish themselves as the lenders of first resort and not just as the alternative. Many of these companies are staffed by lawyers and people who have worked in bank supervision and regulation, so they know the rules and how to play by them without all the red tape of traditional banking.
Author: Eno Eteng
Eno is a certified financial technician and member of the UK Society of Technical Analysts. He loves to trade and write about cryptos, FX and CFDs. Since 2009, he has been a consultant for several companies in the financial market space. His work can be seen on several forex and crypto-related blogs and trading educational websites.