National Funding Deploys $1.5B, Beefs up Automated Underwriting

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California-based small business lender National Funding said that it has deployed $1.5 billion in capital, funding small businesses with short-term working capital loans. 

The 17-year-old company funded $152 million in loans in the half of 2016, up 45 percent from the same period last year. The company’s customers include general contractors, medical services and trucking companies that average about $1 million in sales annually.

While 80 percent of the loans are for working capital, the company has seen demand for equipment leasing slowly resurge after the financial crisis. “After 2008, the market turned negative in LA and we had to shrink our company,” said CEO Dave Gilbert.

The company is also preparing for a technology overhaul, trying to get access to data pools to automate underwriting. “We need to be tech driven,” he said. “As deals get smaller, we need to automate them to make it affordable.”

National Funding generates 25 percent of its loan volume through brokers. “Given everything that’s happening in the industry, a lot of lenders will be forced to become balance sheet lenders,” he said.

The company hired Geoff Howard from Intuit to lead its technology efforts and aims to automate underwriting for 40 percent of its deals, doubling up from its present rate of 20 percent.

The average size of its loans is $50,000 and the company also plans to launch its first long-term loan product later this year.

Last modified: April 20, 2019
Srividya KalyanaramanSrividya's work has appeared in publications like Money magazine, Advertising Age, FirstPost and The Economic Times. She has also dabbled in business intelligence solutions, and holds a Masters degree in Business and Economic Reporting from NYU.

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