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3 Core Values We Believe in SMB Online Lending

Updated: Jun 1, 2022

We are proud to announce that Lighter Capital will be a sponsor of this year’s LendIt Conference, which is the world’s largest annual gathering of the online lending community. Our team will be there from April 13-15 and I will be participating in a panel discussing innovations in small business lending.

The LendIt conference gives us a chance to share our vision on how to take online lending to the next level. While today there are more funding options for entrepreneurs to choose from, few online lending models support a healthy startup’s sustainable growth.

Here are three core values that Lighter Capital believes in helping to drive the online lending industry forward. We call it Capital-as-a Service, a way of providing capital that better serves the entrepreneurs.

Core Value #1: Lend for long-term business growth

For a successful startup that needs growth capital, funding options are surprisingly hard to come by. Banks only want to lend to more established companies with physical assets and equity investors are looking for breakout companies, not built-to-last businesses that entrepreneurs want to run for the long-term.

Unfortunately, most online lenders are focused on lending small amounts of working capital for short periods of time at high interest rates.

The way to solve this problem for entrepreneurs is to provide sufficient long-term growth funding with reasonable interest rates and payback schedules. This sort of financing not only creates more sustainable companies, it also greatly decreases the default rate.

At Lighter Capital, we fund early-stage technology companies that have great margins and predictable revenues but not physical assets. Our five-year revenue-sharing agreement is tied to a company’s revenue and growth, and gives sufficient time and money for entrepreneurs to take their company to the next level.

Core Value #2: Use technology to improve, not shortcut credit analysis

Too many online lenders rely solely on an entrepreneur’s FICO score when making lending decisions. But an entrepreneur’s personal creditworthiness isn’t always the best predictor of a company’ future success.

With so much data now available, it’s time to take a more sophisticated approach to underwriting and credit analysis.

At Lighter Capital, we do this by using multiple data sources, including social networks (e.g. LinkedIn), accounting tools (e.g. QuickBooks), bank accounts, and CRM platforms (e.g. With a more comprehensive view of a potential borrower’s financial and market positions, we can make funding decisions based on a deeper understanding of potential borrowers and their businesses.

This model allows us to tailor loans to a borrower’s specific needs, which reduces the risk of default and increases the chances of long-term success. We believe this model is repeatable across a wide range of industries.

Core Value #3: It’s all about the entrepreneurs

We believe online lenders should think more like long-term investors and less like a bank. This means getting to know the lender’s company. What products are they offering? What markets do they target? Who are their current customers? By better understanding the company, online lenders can make better-informed loans to better-qualified borrowers.

Capital-as-a-Service was built on the idea of a long term partnership between the capital provider and entrepreneurs. Many of our clients come back for additional capital as they grow.

For those of you who will be at the conference, come and hear my panel discussion: Small Business Lending Innovators. (10:05-10:35am ET, April 14th in the Astor Ballroom). Or stop by and say hi to Lighter Capital at booth 608 on the exhibition floor. See you there!


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