AmEx launching online lending platform
(6 July 2016 – United States) American Express (AmEx) has announced plans to launch an online loan platform for small-business clients in the US later this year.
In a direct move to compete with fintech startups such as OnDeck and Square, AmEx’s venture, Working Capital Terms, will approve loans in minutes for existing small-business cardholders.
Loans may range from US$1,000 to US$750,000 with fees of 0.5 percent for a 30-day loan to 1.5 percent for a 90-day loan.
“We’ve combined the convenience of the online lender with the competitive pricing of a bank loan,” Susan Sobbott, AmEx’s president of global commercial payments said.
“It’s a big opportunity for us to go into an area where businesses want to pay vendors that don’t accept any credit cards.”
The credit card provider has been looking for new streams of revenue to rejuvenate earnings after deciding last year to part ways with its biggest co-brand partner, Costco Wholesale Corp.
Sobbott highlighted that recent downturn in the online lending space “does not worry us.”
“We have much more background in understanding how businesses perform, how they can repay their loans. We think that’s really going to help us perform better in this space,” she said
In March, AmEx told investors that it will increase lending in the US to bolster revenue while contending with aggressive bidding on card partnerships with retailers, airlines and other companies that bring in customers.
“With the customers that already do business with American Express, we can continue to help them grow their business,” Sobbott said.
“And, in so doing, we will grow as well.”
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