Reflecting Silicon Valley’s growing influence on traditional finance, Regions Financial, which operates bank branches across 16 states, plans to partner with Fundation, a lending startup, to provide online loans to small businesses, according to USA Today.
The partnership will give the publicly-traded Regions, valued at $11 billion, a new online banking presence. Fundation will have access to Regions’ small-business customers. The partnership could double the startup’s revenue.
“We expect it will at least double (loan) originations and revenue” Sam Graziano, Fundation CEO told USA TODAY. He declined to give revenue numbers for the privately held company, which is backed by private equity firm Garrison Investment Group.
Banks Seek To Compete With Online Lenders
The partnership comes as banks of all sizes – including Goldman Sachs – seek to compete with online lenders, a growing field that currently includes LendingClub, OnDeck, Fundation and FundingCircle.
Online lenders have competitive advantages over traditional banking since they face less cost and regulation and can also provide faster loan guarantees.
Goldman Sachs predicts the emerging financial technology industry, called fintech, could grab $4.7 trillion in revenue and $470 billion in profits from traditional