We understand that people looking for a small-dollar loan are often coming to us because they’ve exhausted other resources, so we really, really go out of our way to be that friendly lending partner.
If you’ve traveled the winding path of financial destitution and reached its end with literally nothing left in your pockets, then you’ve probably applied for a short-term loan (known within the industry as installment loans).
Everybody’s reasons for seeking installment loans are different. Maybe you need some money to buy groceries for your family, maybe you just want to go spend $20 on candy bars. I don’t know, I don’t care, I’m not here to judge.
The point is, if you’ve sought an installment loan through traditional methods (see: banks), the process can be inefficient and time-consuming, a problem when you need a short-term loan. This is why the online lending marketplace, a much faster and efficient alternative to the banking route, is beginning to explode.
Among the companies taking advantage of this online explosion is Logan-based ExtraFunds. Founded in early 2010 and owned by Ottawa Capital, ExtraFunds specializes as a servicing and marketing company within the online lending marketplace.
“Our current niche has been with lenders who do online installment loans,” CEO Aaron Bishop said. “For many people, it’s going to be a last resort loan. Some people have damaged credit, no credit, or they don’t have a good banking relationship. They will look online for one of our lending partners, we will actually service the loan and solicit those customers to try to connect them to the lender.”
ExtraFunds doesn’t supply the money required for a loan, but connects the borrower with the best possible lender via the online marketplace. Bishop gave the best comparison — ExtraFunds is to installment loans as Netflix is to movies. They don’t give you the money, Netflix doesn’t make the movies, but both provide customers a way to access each particular service.
So just like can’t get mad at Netflix when you watch another Spiderman and want to bash your head against the nearest table, don’t drag ExtraFunds under the bus for failing to get the money you desire.
“We understand that people looking for a small-dollar loan are often coming to us because they’ve exhausted other resources, so we really, really go out of our way to be that friendly lending partner,” Bishop said. “The biggest advantage we have is that we do everything we can to work with our customers. They like our friendly service. If they ever need a small dollar loan again, rather than kind of going back through the funnel, they come straight to us.”
Before it was cool to seek loans through the online marketplace, ExtraFunds has worked with customers to provide unique online opportunities, the business equivalent of an ugly girl without a prom date, forced to juggle her way through a variety of questionable suitors.
As the installment loan world has shifted into a more modernized and online space, ExtraFunds now welcomes droves of people with open arms, the business equivalent of a formerly ugly, now stunning model who posts all of her pictures to Instagram and then basks in the glow of the comment section.
“It seemed like things were going online, including all different kinds of loan opportunities — short-term credit or installment loans, mortgage loans, consolidation credit, education financing,” Bishop said. “So early on, we saw the opportunity of potentially taking advantage of a trend in that direction. One of the main reasons someone would go online, they don’t have time to go through the process of going to a bank and presenting their case. And they really don’t need that much money, maybe just $500 to help them get back on track. So why deal with ExtraFunds? Convenience, security, privacy.”
With the marketplace growing exponentially, ExtraFunds plans to grow along with it. Already home to roughly 25 call center employees, Bishop is looking to increase operations. To do this, ExtraFunds is raising money through Crowdfunder — $765,000 has already been committed, with the round closing in July.
“Traditionally, we have gone the VC route and raised capital very successfully that way,” Bishop said. “We’ve been able to offer great returns to investors. So we’re really excited about the opportunity to do so with crowdfunding and take advantage of a lot of investors, rather than just a dozen or so. Because we think that as we grow, the volume lead will be there.”
If you think that ExtraFund’s growth stops with this raise, you’re wrong. When opportunity knocks, you listen. Because as Eminem taught us, opportunity comes once in a lifetime.
“I anticipate us doing this probably 3–4 times at that same range,” Bishop said. “We certainly could have need for 5–10 million dollars over the next 24 months for growth capital and growing the loan portfolios that we manage.”