Marcus of Goldman Sachs partners with C2FO for SME lending
- Goldman Sachs Direct Bank partners with C2FO working capital platform to provide unsecured loans to SMEs.
Goldman Sachs direct bank, Marcus, strengthens its involvement in lending to U.S. small and medium-sized enterprises (SMEs) through a new Partnership with the C2FO working capital platform.
Marcus will begin offering loans to C2FO users this summer, with amounts ranging from $ 10,000 to $ 1 million and coupled with fixed interest rates – borrowers’ creditworthiness and financial needs will be underwriting factors.
Additionally, Marcus will not require borrowers to have assets designated as collateral, removing what has historically been a barrier for some SMEs. The partnership aims to provide a rapid review process, with loan term offers generated in minutes and loan decisions rendered in two business days.
Marcus’ collaboration with C2FO is the latest among direct banking SME lending partnerships, following deals made last year with retail giants to lend to their vendors.
- Amazon: Direct banking in partnership with the retailer last June to make lines of credit available to thousands of platform sellers for amounts up to $ 1 million, with interest rates ranging from 6.99% to 20.99% .
- Walmart: Goldman continued in September with a deal which allows Marcus to offer lines of credit to sellers in the retailer’s market for amounts between $ 10,000 and $ 75,000, with the future possibility of increasing the figure to $ 1 million. The Walmart partnership includes the same interest rates as the Amazon agreement.
Direct banking’s C2FO partnership enables it to develop its corporate banking operations by diversifying from retail salespeople to working capital applicants. By adding another partnership, Marcus is increasing the scope of its SME lending business in the United States, which could be beneficial to its bottom line.
We recently saw the benefits of increasing SME lending activity exemplified by OakNorth, a UK business-focused company
This is Planning an entry into the United States: its 2020 pre-tax profit jumped up by 18% compared to 2019 and its deposits increased by 15% over the same period. Marcus could take another page of OakNorth’s profitable playbook by adding SME-friendly deposit accounts, which would allow him to provide a cheap source of funding to bolster his future loans.
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