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.
- And its latest expansion into the SME space could bolster its results.
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 associated 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 made in two business days.
Marcus’ collaboration with C2FO is the latest among direct banking SME lending partnerships, following agreements reached over the past year with retail giants to lend to their vendors.
- Amazon: Direct banking in partnership with the etailer 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 followed in September with a deal This allows Marcus to offer lines of credit to sellers in the retailer’s Marketplace for amounts between $ 10,000 and $ 75,000, with the potential to increase that number to $ 1 million in the future. The Walmart partnership includes the same interest rates as the Amazon agreement.
Direct banking’s C2FO partnership allows it to develop its merchant banking activities from retail salespeople to working capital seekers. By adding another partnership, Marcus is increasing the scope of its SME lending business in the United States, which could benefit its bottom line.
We recently saw the benefits of increased SME lending activity exemplified by OakNorth, a UK-based company.
This is Planning an American entry: its profit before taxes 2020 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 deposit accounts for SMEs, which would allow him to create a source of cheap funding to bolster his future loans.
Want to read more stories like this? Here is how you can access:
- Join fellow Insider Intelligence customers who receive daily banking forecasts, briefings, charts, and research reports in their inbox. >> Become a client
- Explore related topics in more depth. >> Browse our coverage
Current subscribers can access the entire Insider Intelligence content archive here.