Academic journal article ABA Banking Journal

Commercial Loan Site Links Lenders and Borrowers-In Real Time

Academic journal article ABA Banking Journal

Commercial Loan Site Links Lenders and Borrowers-In Real Time

Article excerpt

With its comical name and cut-to-the chase business model, Oinke--an auction website for securing real estate and commercial loans--is streamlining the business lending process.

Less than six months out of the gate, Oinke (pronounced "oinky"), already has its fans. "We've had a major bank approach us to buy part of our technology to let them sort out the deals that would be most interesting to their loan officers," says Tom Markel, Oinke's chairman and CEO.

"We're also selling a co-branded version of the technology to four major retailers who sell real estate or commercial products that typically require financing." Before the co-branded or application service provider (ASP) versions even existed, though, the basic technology live to cinch complex deals in cyberspace. (See www.oinke.com.) Referred to by Markel as financial auction relationship management software (FARMS), the Oinke system is subdivided into 1. a vault, which houses digitized forms for all potential borrowers in a series of deal files in one area, and five-page "dossiers" on lenders and their loan criteria in another; and 2. an engine that matches the terms of borrower to the appropriate lender or lender(s).

Getting past the secretary

The goal of the site is to streamline the loan process by simplifying bidding, due diligence, and periodic reporting, Markel explains. "In the real world, both lenders and borrowers share the difficulty of finding each other." Markel points out that much of the traditional loan shopping process is heart-breakingly manual. "Both lending officers and business people are trying to get past the secretary and shop their deal," he jokes. "Our engine essentially matches the deal to the lender with the most appropriate terms," says Markel. "It gives the [potential] borrower lots of options to review lenders that may be suited to finance their project."

Indeed, the website's chief selling point is the sheer volume of buyers and sellers that can be brought together in a relatively short amount of time.

Deal files held in the vault include: a project description, financial data, and a three-part risk assessment of the deal and company completed by the Oinke site. The risk assessment includes 1. a Moody's risk profile; 2. an Integra Information business comparability profile (which rates how the business compares to others in its SIC code); and 3. a Fair Isaac/Trans Union profile of senior management. …

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