- Pablo Sanchez/ Reuters
We’ve all heard about how fintech companies are threatening to disrupt traditional finance.
Now the tables have turned.
Wells Fargo announced on Tuesday that it will start providing online loans for small businesses through FastFlex, a program that’s been in testing since August.
Borrowers need to pay weekly into the program, which offers one-year loans ranging from $10,000 to $35,000, according to Wells Fargo’s press release. They can also draw funds as soon as the next business day.
Lisa Stevens, Wells Fargo’s head of small business, said in the statement:
With a $100 billion lending goal, we want to make every responsible small business loan we can. FastFlex Small Business Loan will help by offering short-term credit through an easy, fast-decision application process that includes competitive interest rates, clear terms and as-soon-as next day funding.
Wells Fargo’s not the first to try and compete with the online-lending startups. JPMorgan Chase partnered with OnDeck Capital to offer up to $250,000 in loans for its 4 million small-business customers. Big banks are also backing online-lending startups that are supposed to be disrupting them.
They’re also competing for depositors with online banks. Goldman Sachs recently began offering a digital savings account, available to anyone with as little as a $1 deposit.
The lending startups aim to bypass traditional banks and make it cheaper and faster to get loans online, and investors once loved them. Now they are getting more skeptical as Lending Club – the largest lender by volume – is under fire for its faulty loans, which sent its stock tanking. Investors are also worried about the valuation of online-lending firms and how they will handle tougher regulatory standards.
While their tech rivals are taking a beating, there’s no better time for the Wall Street establishment to up its game.