SoFi Pondering But Not Ready to Become Small Business Lender
“When the pandemic first started back in 2020, March time period, we were inundated with tons of small, medium businesses coming on to SoFi and trying to apply for PPP loans,” said Anthony Noto, CEO of SoFi in the company’s most recent quarterly earnings call. “We clearly don’t have small, medium lending. Now that we have a banking license, that is an area that we could go into, but we didn’t at that point in time.”
Alerted to the possible opportunity, however, SoFi leveraged its Lantern technology during covid to send interested business borrowers to a marketplace of lenders, which produced favorable results.
“The demand, as a result of that, led us to realize that many of our members are operating small, medium businesses and that we could serve them on the commercial side as well,” said Noto.
Nevertheless, Noto said that small business lending was not on their agenda for 2023 unless there was a big economic recovery this year. But if and when it decided to go into the market, it feels confident that its cost of capital would be of great advantage. As a bank, SoFi can leverage customer deposits.
“So if we get to the point that our deposits are significantly higher than they are today, we can deploy them in many, many other ways to drive a great return for the company,” Noto said.
Another advantage is the organic interest in working with SoFi to begin with.
“If you follow us on any social media, it’s a constant request that we get from people to launch small, medium business checking and savings, small, medium business lending,” Noto noted.Last modified: February 8, 2023
Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.