Page 18 - gs250902

Insights and Expertise S Spotlight Innovators
I
r
o
ov
at
s
p
ht
n
n
ot
li
g
On the rise: Tailored Beyond sales cycles, the lender will understand operating
costs unique to fine dining. These include premium in-
funding solutions for gredients with volatile prices, high labor expenses due to Spotlighting companies that promote
skilled chefs and front-of-house staff, the cost of maintain-
ing a prime location with upscale décor, and investments
niche markets in wine programs or sommeliers. innovation in the payments industry
They’ll also be familiar with regulatory and reputational
risks, from strict health and safety standards to the impact
of reviews on platforms like Michelin, Yelp or OpenTable.
With this depth of knowledge, a verticalized lender is bet-
ter equipped to assess whether a fine dining restaurant is
a sound borrower and then provide terms aligned with
By Chad Otar the realities of the industry.
Lending Valley
By contrast, a general lender may treat all restaurants
hile more general lending services are gen- alike, applying rigid credit criteria without accounting for
erating the vast majority of business for seasonality, high fixed costs or reputation-driven revenue
lenders, verticalized lending is on the rise. swings. This lack of nuance often leads to denials for fine
W Industry-specific funding options are avail- dining establishments that, while operationally sound,
able to businesses that are often underserved by tradition- simply don’t fit the “one-size-fits-all” model.
al lenders, and they provide funding tailored to unique
needs. This article discusses how verticalized lending The verticalized lender will have a thoroughly informed
works, as well as the benefits it brings to businesses in the view of how a business operates and be able to ascertain
industries it serves. with more confidence whether it is worth lending them
cash. This may mean businesses unable to work with gen-
What is verticalized lending? eral lenders will be able to work with verticalized lend-
ers. Small businesses within the areas of the verticalized

Verticalized lending is a form of lending aimed at a specif- lender's focus may meet their criteria. Custom pages on our high-tra c website showcasing

ic market segment. For example, a lender with operations
designed specifically for ecommerce sellers, restaurants, Because the verticalized lender understands the market, your company’s unique message
or salons and hairdressers is offering those niches verti- they can also offer more customized advice and lending
calized lending. solutions to truly benefit the businesses they work with,
guidance these borrowers wouldn’t get from traditional • Your own, customized News from the Wire that highlights
By targeting specific market segments, verticalized lend- banks.
ing caters to their needs better than general lending may. stories about your company
This means verticalized lenders often understand the Of course, like other types of lenders, verticalized lenders
niches they operate in and thus offer better service. This want a decent chance of getting a return from the busi- • Featured content: updated monthly, either by your in-house
also benefits the businesses that borrow from them. nesses they support. And they realize the success of those
How verticalized lending benefits businesses businesses leads to their own success, as well. In short, writers or by one of ours
verticalized lending means more custom lending solu-
Traditional lenders often have generic criteria that busi- tions, better approval rates for underserved companies • Custom infographics and videos
nesses must meet when they borrow cash. The problem is and tailored advice that can lead to better business suc-

that businesses operating in numerous niches may strug- cess. • Premier content placement in each issue of e Green Sheet
gle to fit this criteria, whether due to seasonal sales (which
lenders may not like) or slim profit margins. Is verticalized lending for every business? • And so much more...
Multiple verticalized lending fintech companies are in
By catering to specific niches, verticalized lending fills a business now. In fact, it is the largest growth area of the
need other types of lending do not. Consider, for example, lending market. However, verticalized lending is not yet
the fine dining vertical. A professional, diligent vertical- a solution for every business, not because there is some-
ized lender that works closely with fine dining establish- thing wrong with verticalized lending, but because not
ments will understand the business inside out. every niche is serviced at the moment.

They will know that peak sales often occur around week- This will change in the future, though. When that hap- Rick@greensheet.com
ends, holidays, and special event seasons like Valentine’s pens, verticalized lending, or even verticalized banking,
Day and New Year’s Eve, while slower periods, such as may indeed be for every business. After all, who doesn’t
January or late summer, can create cash-flow challenges. want a banking option catered to their specific needs?
They’ll also recognize that fine dining restaurants rely
heavily on reservations and wine sales, which affect both Chad Otar is CEO of Lending Valley Inc. For information about the 707-284-1693
revenue predictability and profit margins. company, please visit www.lendingvalley.com. To reach Chad, send an
email to chad@lendingvalley.com.
18