Figure: Business Loan Brokers Increasingly Arranging Deals Using Home Equity

“What’s happening is people who have that home equity are using that to fund small business financing,” said Figure CEO Michael Tannenbaum on the company’s Q2 earnings call. “That’s a new avenue for us. We’re lapping about a year of us launching that, and it’s already grown to a meaningfully significant portion of our volume…we’re now signing up people that would historically not have been in the mortgage business whatsoever. They’re business loan originators, brokers, Fintech SMBs, but they’re able to use Figure because we make it so simple and easy and inexpensive.”

Figure has also made waves in the SMB market recently with the addition of an SMB loan pool to its Democratized Prime platform. The pool initially consisted primarily of loans originated by Credibly.

“The partners originating home equity loans for business purpose are also generating opportunities for Democratized Prime, as the SMB market has very little capital market standardization, and we therefore launched our SMB pool officially in July,” Tannenbaum said during the Q2 call.

Figure ultimately wants lenders to be able to access warehouse financing through Democratized Prime and then sell the loans they originate to investors through Figure Connect.