Goldman Sachs has been vocal about the lapse in small business funding availability, with president Gary Cohn telling reporters last year that regulations have caused an SME lending squeeze. Alternative lenders gained traction thanks to that gap, and now, Goldman Sachs is making its own move in the alt-fin space.
Reports on Tuesday (Aug. 23) said Goldman has provided alternative lender Fundation with a $100 million credit facility to accelerate the firm’s small business lending operations.
“We are excited to have garnered Goldman Sachs’ support,” said Fundation CEO Sam Graziano in a statement. “This transaction further strengthens our balance sheet and reinforces our unique position in the small business lending marketplace.”
Fundation uses strategic partnerships with traditional lenders, like Goldman, to help SME borrowers access financing via an online platform. The company has struck previous deals with Regions Bank, the Minority Business Development Agency and other groups to promote SME funding.
Goldman’s support of Fundation follows an earnings report last month that some analysts said wasn’t enough to jumpstart the bank back into high gear. The firm is seen as a competitor against marketplace lenders, though, and while analysts eye the slowdown in alternative lending’s popularity, some have considered Goldman as being positioned to strengthen its position in the context of struggling competitors.
Goldman’s credit facility for Fundation, however, could signal a different approach that Goldman will take to give its financial figures a boost.
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