AEO PARTNERS WITH INNOVATIVE LENDING PLATFORM ASSOCIATION TO ADVANCE MODEL DISCLOSURE STANDARDS FOR ONLINE SMALL BUSINESS LENDERS
FOR IMMEDIATE RELEASE
May 5, 2016
WASHINGTON, D.C. - The Association for Enterprise Opportunity (AEO) applauds launch of the Innovative Lending Platform Association, an initiative of the three largest online business lenders that promises to advance disclosure standards for small business lending and helping small business owners to assess and compare credit options.
AEO is excited to partner with the Association on standardized pricing comparison tools and explanations, including total cost metrics and an annual percentage rate. This tool – known as SMART (Straightforward Metrics Around Rate and Total Cost) Box – represents ground-breaking progress toward advancing transparency and benefitting small business owners. We see collaboration among the three largest platform lenders -- OnDeck® (NYSE: ONDK), Kabbage, and CAN Capital -- as a critical step towards closing the $44-$52 billion credit gap on Main Street.
AEO believes that innovative online lending platforms present opportunities to promote financial inclusion by addressing the twin challenges of availability of and access to small business financing products and decision support tools. At the same time, we have long recognized that this dynamic and rapidly evolving marketplace presents challenges for small business owners in being able to compare the broad range of credit options available to help them satisfy a business need or use-case.
In order to ensure that more of the 11.2 million small businesses in low-wealth and distressed communities have opportunities to achieve their aspirations to grow and hire, we must collaborate and innovate to develop new models. Transparency, low-cost distribution channels and trusted guidance from nonprofits can serve to unlock opportunities for millions of entrepreneurs and mitigate risks.
This SMART Box initiative could be a game changer. We are proud to serve as the engagement facilitator for this initiative that will be open to all interested stakeholders, and to be part of a collective cross-sector effort to bring creative solutions to the complex issue of improving capital access to Main Street. It should go far in helping business owners, particularly those in underserved communities, navigate the new frontier of lending options.
In two weeks, at EconoCon25: Powered by Inclusion, AEO’s 25th National Conference and Anniversary Celebration starting May 18 in Washington, DC, hundreds of participants representing nonprofits, fintech companies, mainstream financial institutions, investors, and policymakers will engage in dialogue about the role of innovation in driving financial inclusion. This is an open conversation among all stakeholders charting a new course for small businesses, and for the nation, as we provide intellectual muscle and resources to an economic engine that can create meaningful jobs in communities throughout the country. Join the conversation. Click here to register for the conference.
The Association for Enterprise Opportunity (AEO) is the leading voice of innovation in microfinance and microbusiness in the United States. For twenty-five years, AEO and its more than 450 member organizations have helped millions of entrepreneurs contribute to economic growth while supporting themselves, their families and their communities. AEO has worked alongside a growing network of CDFI business lenders, technology partners, structured finance experts and investors to enable new business models for lending to low-wealth communities that bring the benefits of online marketplace lending to community economic development lenders while continuing to build on the unique strengths and assets of CDFIs and nonprofits. To learn more about this work, visit www.aeoworks.org.