The first-ever mobile application making automobile transactions possible at the touch of a screen, Blinker eliminates the role of the middleman in the car buying, selling and financing process. How Blinker Works Blinker‘s focus is on facilitating a hassle-free experience for all stakeholders involved in an auto purchasing transaction. Blinker uses a lot of dealer […]
The first-ever mobile application making automobile transactions possible at the touch of a screen, Blinker eliminates the role of the middleman in the car buying, selling and financing process.
How Blinker Works
Blinker‘s focus is on facilitating a hassle-free experience for all stakeholders involved in an auto purchasing transaction. Blinker uses a lot of dealer tools used to execute trades, but it has leveraged technology to enhance the experience and create a solution that is executable online without any middlemen driving fees. This allows users to buy and sell cars for free on the platform.
The downloadable app simplifies the process of getting approved for credit, and all the user has to do is upload a picture of his driver’s license. Documents are signed with Docusign. The user posts a picture of the car she is selling and the fund transfer is done online, which eliminates the need for any physical interaction as the entire transaction takes place on users’ smartphones.
All transactions start with one picture of the car and, in less than three seconds, the company can find out all the details about the car from the year to the make, model, approximate value, and the number of miles it has been driven. The company has partnered with Carfax and Blackbook for these reports.
Blinker has its own patented technology. Out of 17 patents filed with the U.S. Patent Office, 13 have been issued.
The Blinker Team and Platform
The Blinker platform has the same credit requirements for auto finance as any other bank. It gives instant pre-approvals with a picture of a driver’s license and, upon authorization, for a soft credit pull. The idea is to have the customer approved first followed by the car. Customers have access to unique offers on each vehicle based on credit score, income, and their ability to pay. The platform does not see the seller, the buyer, or the car.
Currently operating in four states, Blinker’s model is able to generate great auto finance deals for its users. Blinker took its own equity to create a loan portfolio to prove the viability of the model. The business caters to a full spectrum of borrowers having FICO scores between 560 and 800. The loan-to-value (LTV) ratio is usually 20% less than the average dealer offer. The portfolio has faced no delinquencies, highlighting the success of the company’s lending algorithms.
The company has raised a total of $51 million in funding and onboarded 65 professionals in its Denver office, out of which 30 are engineers on the lending side. The company’s president was in senior management at Americredit, a giant in auto finance solutions. All of the above has given birth to a company that is rapidly capturing market share and mind share in the auto industry.
Blinker is now entering into a relationship with Allied Bank and talks are going on with other customers and member groups to expand its reach. Its foundation is to be a fee-based company. It wants to follow an asset light model with no inventory or loans on its books.
Blinker’s Selling Process
The car prices and terms of sale are displayed in the mobile app for full transparency. Car shoppers can set a filter for distance/location, and more, as they search for the perfect vehicle. The average price of cars available on the app is $14,000, but it is not restricted to any particular segment and has even sold a $105,000 Ferrari. Blinker has also partnered with Manheim Auctions, the largest car auctions company in the world, to sell its inventory directly to individuals. The company is extending into selling rental cars and partnering with OEMs to sell cars not picked by dealers.
On average, a Blinker seller gets $2,500 more on a trade than they do through a dealership. Buyers save an average of $2,000 as compared to buying from a dealer. Refinancing from Blinker helps the average customer save $130/ month.
The app has been able to garner a lot of support in a short time since launch. There have been over 175,000 downloads, and Blinker has been successful in generating $44 million in sales. That includes about 3,500 vehicles, 8,000 listings, and the funding of about 650 to 700 loans.
The Changing Auto Industry
Although there are a lot of companies in the market like Shift, Carmax, and Carvana, they are hampered by a model that charges 8%-10% of the sale price, serves only metros and/or focuses only on one part of the trade. There are no players in the market, like Blinker, that facilitate the entire transaction from listing and pricing to car finance. Blinker is able to execute transactions anywhere and anytime. All that is required is access to an internet connection and Blinker will be able to complete a car trade.
Currently, the company is completely operational in Colorado, Texas, Florida, and California. Six more states are ramping up for service. It is looking to expand across the U.S. soon and, by the end of 2018, Blinker hopes to be in all 50 states. The platform will ensure that it is free for buyer and seller. Its model is to generate fees via loans originated.
Target Customers and the Blinker Roadmap
When Blinker entered the marketplace, it had expected that the majority of its clients would be millennials. However, it realized that clients are of all ages and are buying and selling all types of cars. But to ensure optimum portfolio for its loan partners, Blinker does not finance cars below $8,000 in value or over 10 years old.
Blinker is on a mission to empower dealers and customers to transact through their smartphones. It is getting a lot of attention from national strategic partners that love the technology. Its main focus is on acquiring customers as its technology is completely built out. It will tie up with strategic partners to provide complete end-to-end transactions for members and provide revenue share opportunities to make it a win-win proposition. The aim is to become the pre-eminent platform for buying and selling used cars in the U.S.
Rod Buscher founded the company in 2013. He was into the brick-and-mortar auto space, operating in the industry since 1973. As cofounder of the John Elway dealership, partnering the legendary quarterback until selling the dealership in 2013 to launch Blinker, he has inside knowledge of how dealerships operate and cars are sold.
With deep domain expertise in the space, Buscher realized that people usually do not like what they get for their car trades through the dealer and are not satisfied with the financing experience. Using Craigslist for selling cars is not secure, and selling cars with liens is another headache. Blinker was born to solve this gap in service and provide an app which would “put people in control of buying, selling and financing cars.”
Buscher is out to revolutionize the car selling industry. He’s off to a good start.
News Comments Today’s main news: Enter the bear market in bonds? D+H launches cloud-based small biz lending platform for banks. Over 50K investors register with RateSetter. Revolut partners with Lending Works to offer cut-price instant credit. Blender procures Electric Money Institution license. Blackmoon partners with ID Finance. Today’s main analysis: Fundbox study reveals impact of late SMB payments. The British Business Bank […]
Carvana hires banks for IPO. AT: “What will make used car buying in an MPL world truly innovative is a platform that connects individual buyers with individual sellers and the added value of a financing option. While this has been tried, so far there hasn’t been a success story. Carvana is upping the game, however.”
Stocks and bonds struggled while the dollar climbed Tuesday.
The yield on the 10-year Treasury note on Monday rose to 2.609%, the highest since September 2014. That’s up from 1.867% on Election Day, and nearly double the all-time low of 1.366% hit last July.
Bill Gross, the famed bond investor, underlined the 2.6% yield in January as the pivot point that will usher in the long-anticipated bear market in bonds. Mr. Gross warned that, should yields march above that threshold, it would indicate a “secular bear market has begun.” A break above 2.6%, he observed in chartist vernacular, would break a downward trend line that has been in place for the past three decades.
Fundbox Study Reveals Impact of Late SMB Payments (Fundbox Email), Rated: AAA
Late and unpaid payments cripple small businesses (SMBs) and it’s something they have to deal with on a daily basis. In fact, 64% of SMBs are affected by late payments on open invoices. I would like to give you an early look at a new Fundbox study, which dug deeper to understand the microeconomic impact that takes place when a business is paid late.
Key findings include:
Hiring freeze – 23% can’t hire new employees
Owner pay cuts – 79% of SMB owners said they can’t pay themselves
New equipment gets the squeeze – 23% can’t invest in new equipment
Can’t advertise – 20% can’t spend on marketing efforts
Reduced Payroll – 18% hold back on pay increases or bonuses for employees
Inventory freeze – 17% can’t build up inventory
If paid on time, Fundbox estimates that these SMBs across the U.S. could hire an additional 2.1 million employees, which would reduce unemployment by 27%.
Fundbox helps SMBs overcome cash flow gaps by funding outstanding invoices. Attached please find the infographic. Would you like to also see the release? I can also connect you with Prashant Fuloria, Chief Product Officer at Fundbox who can discuss the critical need for services that solve cash flow gaps.
D+H Launches Cloud-Based Small Business Lending Technology (D+H Email), Rated: AAA
DH Corporation (TSX: DH) (“D+H”), a leading provider of technology solutions to financial institutions globally, today launched Total Lending™ Small Business, a new digital, mobile-first lending solution designed to boost profitability of financial institutions and improve the lending experience for small business owners across the United States. Now, banks and credit unions can deploy an intuitive, online loan application for small businesses, enabling more application throughput than the traditional paper-based branch model.
Total Lending™ Small Business is designed to empower financial institutions to build a more profitable small business loan portfolio. By bringing the loan process online, banks will benefit from reduced overhead and greater scale. An improved application process will also attract more loan requests from new and existing customers who prefer the convenience of the online or mobile experience.
New Data Shows C&I Lending Can Bring Higher Profitability to Community Banks in 2017 (PayNet Email), Rated: AAA
At $4.4 trillion in trade payables, term loans, and working capital loans, private-company credit represents one of the largest credit markets in the U.S. Today, C&I lending represents about 25% of all loans, down from over 40% in 1950. According to a new study by PayNet, Inc. banks can look to higher profitability in 2017 in their core franchise credit C&I business.
PayNet’s study shows that between 2008 and 2016, banks could have achieved $2.6 billion in additional net income, at a higher risk-adjusted return, had they maintained their share of C&I lending.
Banks can find financial technology useful to reduce the time to underwrite a loan from 50 hours to just over 2 hours. In addition, banks can further utilize technology to lower the cost of loan review by 40% while at the same time increasing the frequency of the loan review cycle from once per year to four times per year for the highest risk accounts.
U.S. used-auto retailer Carvana LLC, which allows customers to pick up cars they buy on the internet from vending machine-like towers, has tapped investment banks for an initial public offering, according to people familiar with the matter.
Carvana has hired Wells Fargo & Co (WFC.N) and Bank of America Corp (BAC.N) to lead its IPO, the people said this week.
Carvana sells cars through its website and operates automated towers that store cars in U.S. cities such as Austin and Dallas in Texas, and Nashville, Tennessee.
Now an auto insurance startup called Root is taking that conclusion to the bank, so to speak. It believes that the investigation, as well as its own studies on the matter, make a strong case that Teslas with Autopilot are safer than just plain humans. So confident is Root about this that, starting today, it is charging Tesla drivers lower fees if they turn on and use the controversial Autopilot feature.
The Tesla discount is a natural outgrowth of Root’s business model, which is based on using technology to identify safe drivers and offer them low rates. If you suck at driving, you don’t get a policy. Before getting coverage, customers must submit to a two-to-three-week testing period, downloading the Root app to their phones, which will use the sensors in the device to track location, speed, acceleration, and whether they are weaving recklessly between lanes at 2 a.m. after leaving a taproom. Or whether they are using the actual phone measuring their driving skills to text while in motion. This actually happens, says Timm, because after a few days drivers forget that they are being monitored and revert to bad habits.
According to Timm, about 70 percent of those who undergo this process will be deemed safe drivers, whereupon the company will offer them a low rate, with the entire transaction done on the phone. (Even your proof-of-insurance card will be stored on the device.) The other 30 percent have to get insurance from Root’s competitors.
One might think this will be a boon for insurers, who will see claims drop dramatically. Timm argues otherwise: The paucity of accidents and claims will drop the real cost of insurance so low that the established companies, stuck with high overheads, won’t be able to cut their prices enough. They will thus be subject to Uber-level disruption from newcomers who will be able to charge fees as low as $30 every six months.
Root has not contacted Tesla directly, but says that even without the car manufacturer’s help, the Root app can figure out when a Tesla owner is using Autopilot. Timm hopes that in the future, the company can work directly with Tesla to get better data.
SmartBiz Loans Adds Former SBA Head of Capital Access to Board of Directors (SmartBiz Loans Email), Rated: B
SmartBiz Loans, the first SBA marketplace and bank-enabling technology platform, today announced the addition of Ann Marie Mehlum to the company’s board of directors, a former Small Business Association (SBA) associate administrator and seasoned banking industry veteran, with more than 30 years’ experience.
As former associate administrator for the SBA’s Office of Capital Access, Mehlum directed the government agency’s flagship credit programs including the 7(a) general business loan guarantee program, the 504 program for real estate and long term asset financing, and the microloan programs, with a combined portfolio of more than $100 billion. The SBA is a federal agency that encourages lenders, typically banks, to originate loans to small businesses by providing a guarantee for these loans.
SmartBiz Loans’ SBA marketplace automatically connects small business owners with the right bank which helps to increase loan application approval rates and speed. SmartBiz®bank partners utilize the SmartBiz software platform to increase their efficiency in processing SBA loans by up to 70 percent. SBA loans are widely considered the best type of loan for many small businesses because of their low rates and long repayment terms.
Financial tech firm Finexio is moving its hub from Silicon Valley to Orlando – a move that will open up 10 high-wage jobs, the Orlando Business Journals reported. The startup, which offers a business-to-business commercial payment network, recently decided that the relocation is necessary in order to support its growth.
The company chose Orlando because of its growing reputation as an innovative city, drawing in professionals particularly in the financial technology industry. This move echoes that of other industry giants such as Deloitte and KPMG, which have ramped hiring in Central Florida.
At its new Orlando-based location, Finexio will be looking to hire professionals to work in its corporate headquarters and engineering department.
According to the Orlando Economic Partnership, another reason Finexio chose Orlando is because of the resources available in the area for hiring software engineers. For example, the University of Central Florida is located nearby, which offers a top-tier engineering school.
Peer-to-peer lending platform RateSetter has announced it now has over 50,000 investors.
This was just one of a number of milestones that RateSetter has recently reached, including collecting £1bn of repayments, investors having now earned more than £60m in total interest and more than £1.75bn of loans being delivered to borrowers across the UK.
Revolut has today announced a partnership with peer-to-peer (P2P) loan firm Lending Works to provide instant credit at half the cost of UK banks.
In just two minutes, Revolut customers can now apply for credit from anywhere in the world via their smartphone and receive funds instantly to their Revolut account.
This process cuts out the banks entirely, meaning that Revolut customers are charged just £52 on average to borrow £1,000 over a 12 month period, with a representative APR of 9.9%. In contrast, a recent survey of five major UK banks, whose personal loans are notoriously expensive with time-consuming application processes, showed that consumers are charged £120 on average to borrow the same amount over a 12 month period, with a representative APR of 23.8%*. Credit card rates are also sky-high, reaching a record average purchasing rate of 21.6 per cent APR in March 2016 (Source: moneyfacts).
The new credit features mean Revolut is the first company to approve and pay out P2P loans instantly.
The Revolut app currently offers UK users credit from as little as £500 to a maximum of £5,000, and users can adjust their repayment period between 12 and 60 months. In contrast to many banks, there are no fees to repay the loan early.
Since it was established in November 2014, the British Business Bank has invested Â£135m in peer-to-peer platforms.
Following a freedom of information request submitted by Bridging & Commercial, it was also discovered that in the calendar year 2016, £11.5m was drawn down for participation in loans generated by peer-to-peer lending platforms.
CapitalRise, a London-based property investment platform, announced on Monday it is launching an Innovative Finance ISA (IFISA) wrapper for residential property. According to the platform, the new IFISA allows savers to invest a minimum of £1,000 and up to £15,240 in the current tax year (rising to £20,000 in the 2017-2018 tax year) in residential property, targeting tax-free returns between 10-14% per annum.
We used five full years of historical loan performance data to simulate how the returns in a typical investor’s portfolio can change over time. In our example, an investor lent £10,000 across all the loans originated through Funding Circle in 2012. Each month, the loan repayments and interest received were lent to new borrowers.
The below chart shows the annualised return, after fees and bad debt but before tax, earned by the example investor over a five year investment period.
For the first few months the investor’s annualised return is at its highest, at approximately 7.8% after the 1% annual servicing fee is deducted. This is because the investor has typically yet to experience any borrowers being unable to repay their loans.
Bad debts generally start to occur approximately six months after the loans are made. This is reflected in the chart above, where our example investor’s return starts to dip after six months. This trend then naturally decreases over time as the rate at which businesses run into difficulties tends to decrease.
After 18 months the example investor’s return stabilises, then generally increases as recovery payments start to arrive. As of 1st February 2017, 44% of the value of loans defaulted between 2010 and 2014 has been recovered. This trend typically continues for the rest of the investment period, with the example investor ending the five year investment period having earned an annualised return of 6.5% after fees and bad debt.
A London-based financial advisor has launched a robo advice like service for its clients. FOL Wealth, began offering its automated service at the end of February to give customers access to low-cost advice.
The wealth manager charges an annual fee of 0.90 per cent with a minimum investment of £1,000.
Events abroad meanwhile are dominated by what is happening in the US, where the volatility of change and the frequency of significant news events – what journalists call ‘story burn’ – are increasingly alarming.
In the case of Money&Co, the company I founded and of which I am CEO, we bring individuals looking for a good return on capital together with carefully vetted, well-established and profitable small and medium-sized enterprises (SMEs) seeking funds for growth. We have also recently introduced property lending.
As a P2P business lender, Money&Co does what the banks cannot or will not do – we fund SMEs and we provide a gross yield of nearly 9% a year to the lenders, who extend credit via our platform.
To be fair, banks have baggage we do not – for example, headcount, bonus culture and general institutional sclerosis.
The IFISA was launched almost a year ago, but most P2P lending platforms are still unable to offer it, as they require full Financial Conduct Authority (FCA) approval in order to do so. Money&Co has full FCA approval and so we can now offer the IFISA.
Money&Co’s loan book is currently generating an average gross yield of 8.95%. Investors can choose to either roll up the interest in their ISA account or pay the interest out monthly. We take a fee of 1% a year and so the net yield is 7.95%.
We will also be offering asset-backed loans for inclusion in the IFISA. They will yield slightly less – at around 7% a year net of fees – but I would expect them to be particularly popular with ISA investors.
Yet while the average rate on an easy-access account stands at just 0.37 per cent, the rates on so-called peer-to-peer lending range from 2.6 per cent to 7.2 per cent.
Zopa was the first UK firm to set up in 2005 and now has 75,000 investors on its books.
It was swiftly followed by RateSetter and Funding Circle, which together with Zopa now account for two-thirds of the UK’s peer-to-peer market.
RateSetter alone lent £668 million to individuals and businesses across the UK last year.
It offers three accounts. There is a rolling account — which means your money is not tied in for any length of time — paying 2.6 per cent, a one-year fix at 3 per cent and a five-year deal at 4.8 per cent.
Zopa has three deals on offer, paying 2.9 per cent, 3.7 per cent or 6.1 per cent.
Blender, an international consumer e-lending platform, has garnered a new license to operate as a financial institution in the European Union – the license recognizes Blender as an E-Money Institution, which includes a range of banking activities for the group, per a company statement.
In particular, Blender can now grant loans, transfer funds between customers and service the platform to other companies. Moreover, the licensing agreement also allows for the execution of most banking activities, except leveraging deposits.
ID Finance has integrated with Blackmoon and is now executing investment transactions via the Russian online lending platform. ID Finance is a data science, credit scoring and “nonbank digital lending as an application” provider. ID Finance has is currently operating in Russia, Kazakhstan, Georgia, Poland, Spain and Brazil.
Under the arrangement, loans are screened and scored by ID Finance’s advanced risk assessment system. Blackmoon investors may benefit from interest rates higher than traditional investment tools. If the issued loans meet the strategies of investors that deal with Blackmoon, the system registers the fact of sale, the investor’s funds are transferred to the creditor and the transaction is deemed closed. ID Finance registers the profit by the securitised portfolio and continues servicing borrowers who are redeeming the loans now to the benefit of Blackmoon investors. In this case, Blackmoon ensures execution of transactions, analysis, accounting and investment process management for the investor and lender.
These include AimBrain, which has developed a multi-modal mobile biometric authentication platform.
Another two on the watch list are EZMCOM, a developer of a technology that identifies users with their passphrase, voice modulations and facial authentication, with advanced liveness detection features such as movement of lips and blinking of eye, and Crowd Valley, a technology platform that can create, operate and manage online investing or a lending marketplace.
Qumram made their regional debut at Meftech 2017 when showcasing technology that ensures compliance, aids fraud detection and improves customer experience by recording, analysing and replaying every digital interaction – on web, social and mobile.
The Personal Financial Management innovation of Strands is also on display, while White Label Crowdfunding won the delegates over with their online marketplace lending solution that connects credit demand and supply in a transparent and efficient way.
Software company Leveris was also a highlight with their solution that promises to bypass the ‘spaghetti junction’ of IT legacy architecture with a modular banking-as-a-platform (BaaP) solution.
The BlinkID real-time ID scanner by MicroBlink was another star of the show. And making up the impressive list is a platform developed by Agreement Express that allows financial institutions to on-board new clients without requiring paper or ink signatures; and a dynamic Enterprise Planning Platform for Financial Institutions by Inplenion.