Eastern Bank's latest endeavor is a story of gain — and loss.

The $9.8 billion-asset mutual has spun off Numerated Growth Technologies, a startup that lets banks make small-business lending decisions in as little as five minutes. The venture, with the financial backing of FIS and several community banks, has raised upwards of $9 million in seed money.

The catch? As a condition of the deal, Eastern Labs, the Boston mutual’s three-year-old innovation unit led by Dan O’Malley, joined the spinoff.

“We decided that to get the business to be successful … the whole existing Lab team needed to go with the new company,” said O’Malley, Numerated’s CEO and Eastern’s former chief digital officer.

The move makes sense for over the long run for Eastern. It’s been using Numerated’s technology to market Business Express Loans of up to $100,000, generating nearly $100 million of volume since late 2015. Now, Eastern envisions a bigger earnings stream from offering the service to other institutions.

At the same time, Eastern is offering banks another tool to compete against fintech firms and other disruptors that are luring borrowers with quick application and approval processes.

“It is tested and trusted at this point in time,” O’Malley said of Numerated. “Eastern has been through regulatory exams. … It’s been through internal audits. We’ve had lots of work to do to make sure the platform has been successful and stable and everything we’ve needed it to be at Eastern. All of that has gone fairly well.”

Members of Eastern Bank's innovation unit, including Chief Digital Officer Dan O'Malley, have left to run the mutual's new tech spinoff.

Eastern, the firm’s biggest investor, will hold a minority stake that could deliver significant rewards if an initial public offering is held.

The decision to spin off Numerated comes a little more than a week after Live Oak Bancshares, in Wilmington, N.C., announced plans to form a joint venture with First Data that will also aim to overhaul small-business banking.

The goal at Numerated is to reduce the cost of originating small-dollar commercial loans.

“As banks we have a hard time making small-dollar loans in a way that is financially important to the bank because historically underwriting costs have been very high and the cost to close and book loans has been high as well,” O’Malley said. “What we set out to do with the platform is see if we could reduce costs but execute the same type of robust credit policies we were going to be comfortable with.”

Everyone involved with Eastern Labs knew a bittersweet separation was bound to happen sooner or later, said Bob Rivers, the mutual’s chairman and CEO and one of the executives who recruited O’Malley and three associates from the former PerkStreet Financial in 2013. O’Malley’s development team eventually swelled to 23 people.

“These folks are used to building new companies,” Rivers said. “We knew that. We had said to them, `If you join in this effort and build something we can sell to others, then certainly we’ll support you in spinning it out as a separate company.’ ”

The spinoff occurred right on schedule.

“When we began we made a commitment to ourselves: Let’s see where we are in three years,” Rivers said. “If we’re in a position to spin out a company, we’ll do that. If we’re not and it leads to a different action, we’ll do that. The fact that the way we drew it up from the very beginning is the way it happened is pretty amazing.”

Numerated works by using client institutions’ credit policies to underwrite real-time loans. At the same time, it sends email and direct mail to whip up demand.

Numerated’s marketing capability is a key value-add that differentiates it from competitors, O’Malley said.

“The fact that it does real-time lending is rare,” O’Malley said. “There are not a lot of platforms that can execute a bank lending policy in real time. … The second thing that makes it unique is that it will automate the marketing, letting customers and prospects know about the loan.”

“Numerated does more than automate the lending process,” said Michael Tyrrell, a partner at the venture capital firm Venrock. “It’s not just a workflow product. It’s a closed-loop marketing system. That’s its brilliance.”

Venrock, along with Cultivation Capital FinTech Fund, led Numerated’s funding round.

O’Malley and his team began work on a small-business lending application almost as soon as they joined Eastern. The plan has been no secret and other banks have proven extremely inquisitive.

More than 100 reached out to learn more. Three banks have licensed the technology, including First Federal Lakewood, a $1.6 billion-asset mutual in Lakewood, Ohio. First Federal is also among Numerated’s investors.

“We strive to consistently offer high-quality and innovative products and services, like those enabled by Numerated’s platform, which we believe will benefit our customers and help shape the future of banking,” said Thomas Fraser, First Federal’s president and CEO.

Eastern did not disclose Numerated’s other bank investors or clients.

Eastern, one of the nation’s most active Small Business Administration lenders, worked closely with SBA officials in Boston and at the agency’s Washington headquarters to make sure Numerated included an option to provide 7(a) loans.

“If you don’t qualify conventionally, it asks you if you want to go SBA, and for the investment of a couple more minutes, you can get an SBA 7(a) loan,” O’Malley said.

Tyrrell said he expects the combination of fast and inexpensive conventional and 7(a) loans to resonate with small-business borrowers.

“Customers really care about speed and convenience and banks care about their customers,” Tyrrell said. “They know small-business owners are using alternative lenders or carrying large balances on their credit cards. This is such a no-brainer.”

For Eastern, the new challenge is recreating its innovation unit. Rivers, who plans to build a “Labs 2.0,” said he doesn’t anticipate any difficulties in luring a new group of tech mavens.

“Over the last three years, [Eastern Labs has] allowed us to recruit many people in all areas of the company, and certainly in technology, that we otherwise wouldn’t have heard from,” Rivers said. “I’m confident that, once we figure out what we’re going to do with the Lab going forward, we can obtain the talent to do it.”