10/30/2023
Despite recent gloom, we believe a renewed "golden era" of Alternative Lending is on the horizon.
Watch for these 5 catalysts that will fuel the eventual revival:
1️⃣ The Inevitable Return of Affordable Capital: Interest rates are cyclical. When rates decline again, as they always do, abundant low-cost capital will flow back, attracted to alternative lending's yields.
2️⃣ Strong Value Prop to Consumers: Alternative lenders can retake the edge with lower rates and creative offerings as incumbents lag.
3️⃣ Leaner, Meaner Operations: More efficient operations and emerging tech enable responsible growth for disciplined lenders.
4️⃣ Battle-Tested Risk Models: Survivors' solid performance through turbulence will build crucial investor confidence.
5️⃣ Market Share Gains: Reduced competition lets proven alternative lenders gain share in the upcycle.
For seasoned lenders, the data signals ample rewards coming once rates peak and then start to drop.
Markets fluctuate, but opportunity returns for those who skillfully adapt. The next wave of strategic expansion nears as tailwinds start to realign.
We're bullish on lending tech's future - the best is yet to come.
