Mar 02, 2013 Sean Albert
Traditional banking business MidFirst Bank has acquired alternative credit lender Presidential Financial Corporation, making MidFirst a pioneer among 21st-century lenders as it adopts the asset-based company's practices.
Lendio CEO Brock Blake says the acquisition of Presidential by MidFirst marks one of the first times a major U.S. bank has taken on a business that works in such a non-traditional way. Because Presidential is an asset-based lending company, it bases debt collection on physical items like homes and cars rather than straight cash should loans not be repaid. This kind of business, Blake notes, can be a great connection for consumers looking to invest in a business, buy a home or make much smaller payments like legal fees when funds are tight and most lending businesses are hesitant to issue loans to anyone with less than perfect credit scores.
Blake goes on to say that the merger represents the first wave of established lender risk in moving from traditional lending structure, right down to the way hopeful borrowers are expected to approach bank officials. Based on MidFirst's statement following the partnership, the alternative credit business will thrive as it is opened to more secure finances, an even greater range in lending ability and a professional network that reinforces the necessity of helping new business owners succeed for the betterment of all parties involved.
It The acquisition is a win-win for the traditional banking service and the alternative finance company, according to both sources. The alternative lending company gets more credibility, and the traditional bank, Blake claims, is able to shoot ahead of the competition by offering loans that will cater to a largely ignored group of middle-class, hopeful entrepreneurs who will jump at the opportunity to receive loans despite the less mainstream approach to lending perfected by Presidential. Debt collection data firms are sure to see increased activity with the continued establishment of similar partnerships.