By Holly Fisher
In a relatively short period of time, Charleston-based SnapCap established itself as a leader in the online lending marketplace. Revolutionizing the world of small business financing, SnapCap focused on making the lending experience less complex by using technology, offering a quick decision, and focusing on performance-based financing versus how long a company has been in business or annual revenues.
This innovative approach attracted the attention of online lending broker LendingTree. In September, LendingTree purchased SnapCap in deal worth up to $21 million.
Hunter Stunzi and Chris Mettler partnered to launch SnapCap in 2012 as a way to connect businesses of all sizes with available capital and lending options. Leveraging financial technology, SnapCap simplifies the business funding experience, speeds up the turnaround time, and opens the qualification minimums to accommodate businesses that may not meet traditional bank loan requirements.
“We expect business owners to increasingly turn to online lending for funding just as consumers have turned online for most everything,” Stunzi said in an email. “Transacting online enables us to create a customer experience that is vastly superior to the inefficient process of driving to the local bank and waiting in line. We also expect large investments to continue to be made in online lenders that will help commoditize the industry, leading to lower rates and better products.”
Proving that the future of securing a business loan really is evolving, SnapCap has worked with businesses all around the country. A snapshot of approved loans on the company's website shows everything from a $13,000 loan to a café/bakery in Virginia to a $200,000 loan for a home remodeling business in California. Most of the loans, though, are for less than a year and for less than $100,000.
“We’re serving clients who otherwise would not be funded at a bank or don’t want to go through the process because it’s too involved or costly,” said Sean McGinty, senior manager of marketing at SnapCap. “We simplify the process.”
SnapCap accepts applications from businesses that have been operating for at least one year, have $100,000 in annual revenue, and have a personal credit score of at least 500. SnapCap then connects businesses with non-traditional and online lenders.
“We’re seen as a strategic partner with those top online lenders,” McGinty said.
For now, SnapCap’s 20 employees will remain in their downtown Charleston office, continuing to generate online loans for business – now with the national LendingTree brand behind them.
Stunzi said his role will be executing on significant planned growth from the Charleston office.
“LendingTree brings a wealth of support and resources to help us improve and expand our lender network to serve more customers,” he said. “Their focus on data-driven decision making will also go a long way to helping us identify opportunities for process improvement.”
While LendingTree works largely in the mortgage business, this acquisition gives the company leverage in the business lending space.
LendingTree discovered SnapCap a year ago when it acquired CompareCards, founded by SnapCap partner Mettler.
An article on deBanked.com quotes LendingTree Chief Financial Officer J.D. Moriarty on how these acquisitions align with LendingTree’s strategy. In the article, Moriarty said, “We will continue to make small, accretive acquisitions and that will help us to gain scale in certain businesses and diversify.”
SnapCap’s purchase also comes on the heels of a major recognition in August as the company was named to the 2017 Inc 500 List of America’s Fastest-Growing Companies. SnapCap was 258th on the list with a growth rate of 1,660 percent over a three-year period and 2016 revenue of $7.7 million.
The company has funded more than $330 million in lifetime originations on more than 8,000 loans to American small businesses.
McGinty said the company and its employees are excited about the future and forthcoming opportunities.
“We’re hoping our existing high-touch concierge approach will continue to serve everybody well,” he said.