Industry Profile – Brett Baris & Mark Rambler
Brett Baris (President) & Mark Rambler (COO), Credibility Capital
Brett Baris and Mark Rambler, founders of Credibility Capital, have known each other since growing up in northern New Jersey. Therefore, it is not surprising that much like the motto of their home state, the pair’s mission is to bring “liberty and prosperity” to small business lending in the way that entrepreneurs access capital. By employing an innovative business model that leverages partnerships on both sides of the platform and best in class underwriting, Credibility is not shy about its ambitions to become the leading prime marketplace lender.
Baris and Rambler arrived at this new venture via distinct but complementary career paths in financial services. Baris spent 17 years as a venture capitalist with IA Capital, focusing exclusively on FinTech, while Rambler, who holds a law degree from Duke University, worked in the Credit Funds group at Fortress Investment Group. Since launching in May 2015, Credibility has enjoyed steady month over month growth and is currently raising capital under forward flow agreements to give them capacity to originate in excess of $100M in 2016.
Having followed marketplace lending since its inception, Baris and Rambler identified an opportunity to help small business owners access much-needed capital to grow their businesses while offering investors an attractive way to gain exposure to the emerging asset class. They observed that while the near prime lending space was becoming increasingly crowded, there were no platforms lending to the prime small business segment in any meaningful way, leaving those businesses underserved. “Here was an untapped opportunity to access high quality underserved businesses through a powerful partnership model,” says Baris. The businesses that Credibility funds aren’t necessarily being turned down by banks but rather traditional processes are taking too long or the businesses are getting pushed into higher rate products.
From a boatshare company in Seattle to a high-end wine bar in Manhattan, Credibility provides affordable capital to a wide variety of small business owners – each with their own unique story and set of circumstances. Credibility takes the time to get to know their borrowers, which both facilitates superior underwriting and minimizes fraud risk. But beyond those critical business factors, this hands on approach allows Baris and Rambler to fulfill their passion of truly helping small business owners like themselves by solving funding problems and providing an accessible engine for growth.
Credibility recognized early on that strategic partnerships would be a key ingredient for success and established strong relationships on both sides of the equation. On the borrower side, Credibility developed an exclusive partnership with Dun & Bradstreet, a leading provider of credit services to small businesses in the U.S. D&B interacts with thousands of small businesses each day and is uniquely suited to evaluate credit needs and to seamlessly refer qualified prospects in need of funding to Credibility through a simple API integration. The D&B partnership affords Credibility a competitive advantage in the form of a steady supply of high-quality small businesses, significantly lowering acquisition costs. This savings is effectively paid forward to borrowers through a lower interest rate – everybody wins.
On the other side of the platform, Credibility has secured a partnership with FIS Global to source banks that are interested in providing lender capital to fund loans originated on the platform. “It’s a good fit because a lot of these banks that are dipping their toe in the water for the first time are interested primarily in prime loans. They’re not looking for higher rate products but favor instead a steady and consistent low volatility return,” says Baris. As a fully vetted third party provider to FIS, Credibility enjoys an additional layer of trust that facilitates a steady flow of capital. Beyond FIS and its bank partners, Credibility has a diverse base of funding sources that includes hedges funds and family offices.
The other key foundational component of the Credibility business model is the best in class risk management model that powers the platform. Small business underwriting is notoriously difficult, a challenge that is compounded when trying to do so effectively while scaling quickly. That’s why Credibility tapped John Birge as Chief Credit Officer. Birge, a seasoned risk and analytics executive who learned the business at American Express and went on to build the credit framework at CommonBond and Bread Finance, has been integral in creating Credibility’s risk management processes. While many originators these days are focusing on automation, Credibility prides itself on being more thorough and deliberate than the average platform. “We use technology for quicker access to data and insights, but ultimately we want to be the ones making the decision,” says Baris.
Credibility’s platform is built on strong fundamentals with a nod to the past and an eye towards the future. “We’re in a benign credit environment and none of these platforms have really been tested yet,” says Rambler. Paraphrasing Warren Buffet, he concludes, “When the tide goes out, you’re going to see who’s wearing their swimming trunks.” I think it’s safe to say that if and when that time comes, Credibility Capital won’t be caught naked.