Fifth Third teams with online lender to offer small-business loans
Fifth Third Bancorp in Cincinnati said Thursday that it will offer digital small-business loans and lines of credit through a new partnership with the online lender Fundation.
The $169 billion-asset Fifth Third will use a white-label lending service from Fundation that will allow it to approve and fund loans within a day. Small-business clients can apply for loans or lines of credit up to $100,000 through the new service, which the bank is calling Fifth Third Fast Capital. Applicants that don’t qualify for a loan or line of credit from the bank will receive an offer to apply for one from Fundation.
“We understand that when small businesses need to purchase inventory or create a prototype, they can’t wait or risk losing out on growth opportunities,” Kala Gibson, Fifth Third’s head of business banking, said in a press release. “Fifth Third Fast Capital can help get funds quickly, so they can move forward with their next opportunity.”
Fifth Third has pursued various types of relationships with fintech firms as part of its overall digitization strategy. The bank has previously partnered with the student lender CommonBond to refer customers for education refinance products. And in 2018, it bought the savings app Dobot, which it relaunched last year.
In this case, Fifth Third pays Fundation a fee to use the fintech firm’s white-label service. The two companies also have a revenue-sharing agreement for loans that Fundation ultimately makes because of the partnership, a spokesman for Fundation said.
Fifth Third did not share the interest rates for those loans and lines of credit, but said that bank-eligible borrowers would receive a rate “consistent with the market.” Loans made through Fundation will charge a few hundred basis points more than the bank on the interest rate.
Fundation said it has similar partnerships with other banks, including Citizens Financial Group in Providence, R.I., Regions Financial in Birmingham, Ala., BNP Paribas in France and Associated Banc-Corp in Green Bay, Wis.