Prequaled, risk adjusted, representative sample

How NepFin, HSBC Target A Middle-Market Lending ‘Gap’

As nimble tech upstarts join forces with traditional financial firms, cross-selling becomes a strategy. There’s opportunity in serving the middle market in the U.S., where smaller firms seem stuck in a limbo of fragmented lending solutions, and where loans are pricier than might be seen elsewhere.For the financial services (FinServ) firms that seek to serve the capital needs of the middle market (which can be defined as companies with a top line ranging from $5 million to $100 million), speed is important — and data is, too. After all, a more streamlined lending process gets capital into the hands of business owners who want to put a tailwind behind growth. Data helps lenders make the best risk-adjusted lending decisions.To that end, late last month, HSBC U.S. Commercial Banking announced a partnership with FinTech Neptune Financial (NepFin). The focus of the partnership will be on offering a continuum of financial services: The middle-market firms that work with NepFin to tap financing will now be able to connect to the bank’s commercial banking offerings.HSBC has said, through its own research, that the middle-market segment accounts for $7.3 trillion in turnover in the U.S., and middle-market firms employ 29.7 million workers. In an interview with Karen Webster, NepFin CEO Albert Periu delved into the timeframe, the mechanics and ambitions behind the partnership.

So form a sandbox company, give them a fair traded S to L system.  Make a published entry and exit fee, bounded and small. Then match depositors to borrowers, make your own bets if you like. I see this pattern all the time now; Fintech and auto-pricing coming into market.

Transactions cost nearly zero, so this model will be repeated for years to come.  It is sandbox.