Consumers and the market have changed a lot in the past couple decades, and with it, so have their expectations. That’s why SPARK was built to be different — in ease of use, in service, and especially in time-to-value. We simplify the loan origination process through automation, customer-centered design, and a single-source solution calling on deep SBA expertise and a hands-on approach to working with banks, LSPs, and mission-driven lenders.
This is our story.
Early Innovation
It all started at our parent company, Community Reinvestment Fund, USA (CRF). In 2008 when the Great Recession hit, a group of us “IT guys” began experimenting with a fundamentally different business model: lending software built specifically for SBA 7(a) that was not only easy to use, but completely digital.
Our vision involved connecting sales, credit, and fulfillment on one platform (instead of many) for different uses. We’d break the process into:
Inquiry —> Application —> Underwriting —> Packaging/Closing —> Funding
Until that point, the concept of connected systems via APIs had not reached the financial sphere. Even something as simple as gathering applicant information online instead of a paper form was uncommon. But innovation was on the horizon.
See, SPARK wasn’t the only company to come out of the recession with tenacity. A new category of business called “FinTech” was heating up, and early entrepreneurs were lining up to capitalize on the opportunity that post-recovery small businesses posed. Instead of paperwork, documentation, and customer calls that banks had grown accustomed to, these lenders relied on predictive algorithms, scoring models, and enhancements to grow. Plus, without brick-and-mortar branches, they also operated on a less capital-intensive model.
But while they could make strides in streamlining the loan origination process, they completely missed the point: to nurture the community by helping small businesses in need. Unlike banks, these lenders were unregulated. They’d borrow money from hedge funds and other VCs, promising a high return profile, only to turn around and lend that same money to small business owners at much higher rates. They were growing from business owners, not with business owners. Under these conditions, small businesses were forced to choose between the slow speed of banks or the high price of independent vendors.
It prompted an endless cycle for lenders of extracting all available cash flow from a business, keeping investors happy, and enjoying the spoils. And when cheating hard-working borrowers are the major motivation of business, everyone loses.
FinTech for Good
In order to compete in this new digital world, we believed community banks / non-profit lenders and technology would have to work together. These lenders had high-quality products and services at generous rates and returns. They just didn’t have the technology footprint, brand recognition, user-centered design, or customer acquisition budgets that new FinTech lenders had. Digital transformation was no longer an option — it was essential for survival of community banks and local businesses alike.
This is why we developed SPARK as a technology resource for small business lenders seeking a cloud-based platform to manage the loan origination process — with high efficiency and positive returns to boot. Sure, we had the opportunity to make a quick buck powering predatory FinTech lenders. But we said “no,” choosing instead to optimize community development financial institutions (CDFIs) because it was the right thing to do.
Is it harder to do the right thing? Yes. Is it more difficult to find a better way? Absolutely. But nothing worth doing is easy. And communities are worth it. When small businesses are enabled to grow, they hire (usually locally) — providing livable wages for their employees who are then able to purchase goods and services, invest in their communities, raise families, and lead happy lives.
Innovating SPARK Into the Future
Now eight years later, we’re no longer just a couple of IT guys. We’ve built a team and a rhythm. We’ve relentlessly refined the platform to build a foundation that we can now expand and use as a springboard. And as the customer base has grown, so has our ability to incorporate their feedback, serve their needs, and build engagement.
When the COVID-19 pandemic came around last spring, we were ready. It wasn’t easy, but we came out smarter, stronger, and more confident. Plus, it’s shown businesses what we’ve known all along — that investing in technology means nothing if you’re not investing in the right technology. Even some of the world’s largest banks struggled through the PPP process because of a lack of API connected systems that could streamline the borrowing process.
We know there’s much more to come for the FinTech industry. And we now have battle-tested, data-backed proof of our abilities and impact. But it’s our values and our people that will usher us into the next wave of the industry. People are still at the heart of tech innovation, and with our eyes unwaveringly focused on customers, we believe we can change the game for good.
