General Merchant Funding (GMF), led by industry veteran Craig Clark, has been a key player in the alternative business finance sector for over 14 years. This case study explores how GMF has adapted to industry changes and leveraged Cobalt Intelligence's API to enhance their lending processes.
Background: The Evolution of Alternative Lending
Craig Clark, who started in the industry in 2008, provides valuable insights into how the sector has evolved:
"Back then, there was a couple of shops in the industry. Most of these shops were bigger shops, you know, 150 employees plus shops... In between that period when I was getting in, it was kind of the end of those, uh, the big shops."
Clark attributes the industry's growth to the mortgage crisis:
"Really the mortgage crisis. When you want to get really down to it, the mortgage crisis hit. A lot of the brokers came out of that space looking for something else to do. It came into the MCA space."
The Challenge: Adapting to a Changing Landscape
As the industry grew and diversified, lenders like GMF faced new challenges:
- Increased competition from new entrants
- Changing borrower needs and expectations
- The need for more efficient underwriting processes
The Solution: Embracing Technology and Personalized Underwriting
GMF's approach to these challenges involves two key strategies:
- Personalized Underwriting: Clark emphasizes the importance of understanding each business: "I like good owner operators that understand cash flow, understand what they're using the funds for, understanding the product they get in, and also are, um, you know, just realists."
- Leveraging Technology: GMF integrated Cobalt Intelligence's API to streamline their processes.
Implementation: Cobalt Intelligence's API Integration
Clark describes the integration process:
"Our main goal, well, especially this year, is to automate the system and increase the efficiency of the system and speed up the system, which is really just the experience that the business owner's gonna have, you know, applying with us for capital."
Key features implemented include:
- Automated Secretary of State Checks: "Before using your system, it was a manual process... As soon as the file's entered, the system's automatically pulling that information."
- Real-time EIN Verification: "We can verify the EIN in real time, and that's the federal tax ID number. Having that as automated... makes the deal or file a stronger file right from the door."
- Judicial Checks: "We use the judicial side of your system as well, where it checks the court cases in particular counties."
Results
The integration of Cobalt Intelligence's API has yielded significant benefits for GMF:
- Time Savings: "That could speed up, uh, you know, a minute on each individual file. And when you add that up over thousands of files in a month, you're getting a lot of time back."
- Improved Efficiency: "It's set up our system, uh, quickly, more efficient, and, um, the information we're looking at, we know we can trust."
- Enhanced Due Diligence: By automating checks that were previously manual, GMF can now perform more thorough due diligence on each application without slowing down the process.
- Better Customer Experience: Faster processing times lead to improved experiences for borrowers.
Conclusion
General Merchant Funding's success in the alternative lending space can be attributed to their ability to adapt to industry changes and embrace technological solutions. By integrating Cobalt Intelligence's API, they've been able to streamline their underwriting process, improve efficiency, and maintain their commitment to personalized lending decisions.
As Craig Clark puts it: "I'm just a long term play type of person... Everything that I put in place was never, I'm rushing because I'm trying to get out, or I'm rushing because I'm trying to do something different. It was to sustain the ups and downs of the economy when they come."
For alternative lenders looking to thrive in an increasingly competitive landscape, GMF's approach of combining technological efficiency with personalized underwriting offers a compelling model for success.
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