Popular Bank in New York has contracted with Biz2Credit to use its software for automating commercial loan approvals and to outsource the underwriting of certain small-business loans — a move that is part of a broader effort among banks to better compete with online lenders.
The $9.5 billion-asset Popular Bank started using the loan software earlier this month, said Rohit Arora, the CEO of Biz2Credit, an online marketplace that connects lenders and small businesses seeking credit.
Financial terms of the contract were not disclosed.
“Popular Bank is expanding the bank's digital presence to radically streamline our small-business loan application process,” Manuel Chinea, chief operating officer of Popular Bank, said in a joint news release issued on Tuesday.
Fintechs are cutting into banks' market share in various segments, including commercial lending, where growth has been sluggish among traditional lenders. Banks are setting up their own digital operations or teaming up with more high-tech players. For example, PNC Financial Services Group recently struck a deal under which OnDeck Capital will
Popular Bank, the mainland U.S.-based division of Puerto Rico’s Popular Inc., is one of a handful of U.S. banks to adopt the Biz2Credit software, Arora said. Biz2Credit has similar arrangements with Citigroup, the $10.6 billion-asset Customers Bank in Wyomissing, Pa., and the $6.5 billion-asset Oriental Bank in Puerto Rico, as well as some Australian banks, he said.
The software allows Popular Bank to accept applications for commercial term loans and lines of credit between $25,000 and $1 million, and secured commercial real estate loans between $100,000 and $1.5 million, the companies said in the release. Biz2Credit will handle underwriting for applications below $100,000, Arora said.
Biz2Credit’s loan-automation platform can be used on desktop or laptop computers and mobile phones.
