12 Questions to Discover Bond Street
Bond Street is a different kind of alternative lending origination platform that focuses on technology, data and design for small businesses. Learn why they do what they do and how they make it happen with our interview with Bond Street’s CEO, David Haber.
LendingRobot: Where did the idea come from?
David Haber: Before co-founding Bond Street in 2013, I was an investor at Spark Capital where I focused on marketplace and financial services investments. While I would spent most of my time talking to technology companies, I’d often run into fast-growing physical product or service businesses that were also in need of capital. While they didn’t fit perfectly within our mandate (or even make sense for venture capital), they were making millions of dollars in revenue, were growing and profitable, but either having difficulty raising bank financing or could, but kept telling me how painful and antiquated the process was. Maybe they didn’t check every box at the bank, but to me, naively, it didn’t make sense. Why shouldn’t there be a product or business that could solve that middle gap? Ultimately, what drove me to start Bond Street was the need I saw in the market from this large number of amazing, fast-growing small businesses who were struggling to raise financing. At the same time, I saw many of the financial software companies were beginning to launch APIs which I understood would make data collection and underwriting a more seamless experience from the staid, paper-driven processes at the banks.
LendingRobot: What makes you unique from others in your space?
David Haber: We’ve always aspired to be more than a lender; but instead to be every business owner’s financial advocate. In my opinion, our business shouldn’t be simply about maximizing the number of transactions we can make, but instead focus on building a relationship (and providing value) to our customers beyond the loan. Ultimately, capital itself is a commodity (our dollars are just as green as everyone else’s) and the future is one where capital will be available online. We are building the foundation (and software), today, to be able to offer our customers the strategic insights that they need to build more successful businesses.
Additionally, we’ve expanded our term product to include loans ranging from \$10,000 to \$1 million; we now offer the widest range within the alternative lending industry. This is an important point of differentiation because of how it positions us to be the long term financial partner to the entrepreneurs we work with.
LendingRobot: Who is your typical investor?
David Haber: We work primarily with large institutional investors.
LendingRobot: How do your investors choose their investing strategy?
David Haber: They receive a pro-forma allocation of our portfolio of loans.
LendingRobot: How does your investment fit into an investor’s portfolio?
David Haber: We complement other fixed income investments that they may be making.
LendingRobot: What is a typical loan like on Bond Street?
David Haber: We see companies that are graduating from a business credit card or from a more expensive shorter-term loan, all the way up to incredibly bankable businesses who are doing \$25+ million of revenue and borrowing \$1 million from us.
LendingRobot: Could you describe your risk assessment and credit model?
David Haber: We take into account a large number of variables as well as credit histories and cashflows of the businesses we serve.
LendingRobot: What are three milestone numbers for Bond Street?
[Unfortunately, Bond Street has stated that these metrics cannot be disclosed at this time.]
LendingRobot: What are the goals you can share for 2017?
David Haber: A common thread we’ve identified since launching Bond Street and helping small businesses around the country access fair and affordable financing is that entrepreneurs are incredibly passionate about their product or service, however, they’re not (necessarily) finance people—not that they should they be. So the bigger opportunity that we see to support entrepreneurs is to take the subject of “Finance”—which is opaque and scary for most people—and distill it down into something simple and actionable. This year, we’re extremely excited to launch Beacon, a new software product aimed at helping business owners understand their finances and make more informed decisions. In my opinion, that opportunity, to change the relationship between a customer and lender, is the future for Bond Street and we’re excited to make some big strides towards that vision this year.
LendingRobot: What is your greatest challenge?
David Haber: Staying focused. We’re a young business with a relatively lean team. There’s always the desire to chase every opportunity, but spreading ourselves a mile-wide and inch-deep can lead to serious ramifications. Over the course of the next year, there’s a lot that we want to accomplish; from Beacon to automated underwriting to additional debt products. In order for us to execute, we have to stay focused, and prioritize initiatives that will move the needle in terms of positioning us as the best financial partner to small business owners. It requires constantly revisiting our mission, and staying true to our “North Star”; something that is easier said than done.
LendingRobot: If you had one wish for your niche in the alternative lending space, what would it be?
David Haber: I think it’s important, as an industry, that we continue to put the customer first and push for a culture of transparency. As a fairly nascent industry, there have been far too many instances of lenders offering capital to business owners at sky-high APR’s—sometimes even reaching triple digits. The opportunity for alternative lending is not to take advantage of the gap in capital available to small businesses, but rather to become their financial partner, and improve an antiquated process that is more than ripe for change.
Special thanks to Bond Street’s CEO, David Haber, for taking the time for this interview! We hope you enjoyed learning more about Bond Street.
- Vanessa Hoying
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