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This Millennial CEO Thinks the Loan System for Small Businesses Is Broken

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This post originally appeared on brunchwork.

David Haber is the cofounder and CEO of Bond Street, a two-year old FinTech startup that raised over $110 million dollars to revolutionize the loan process for small businesses.

At only 28, David has established relationships with more high profile individuals and closed more deals than almost anyone else his age. He has also put Wall Street on notice.

At a recent brunchwork, David spoke about Bond Street’s early days, future plans, and how he accomplished so much so young.

Life before Bond Street.

Although the San Diego native says that he’s always had an entrepreneurial spirit━ admitting to selling tacos and gel candles in high school━ David started out on the premed track at Harvard.

It wasn’t until his sophomore year of college, when his current wife introduced him to New York investor and serial entrepreneur Rory Riggs, that he began to think seriously about entrepreneurship and finance.

David worked for Rory during college. Although unusual at the time, the internship helped open doors for David in the startup world. After graduation, he accepted a position at leading investment firm Spark Capital, focusing his attention on FinTech.

 

Identifying a market opportunity.

Noticing the difficulty that startups experience while trying to raise capital, the idea behind Bond Street began to form.

“I’d run into fast growing physical product or service businesses that were trying to raise financing,” he said. “They were making real revenue and were growing, but were struggling to raise bank financing or could raise bank financing, but kept telling me how painful & antiquated the system was.”

At the time, businesses couldn’t apply for a bank loan online anywhere in the country. “Could we use technology, data and design to make a much better customer experience and make capital available to a wider community of small businesses?,” David wondered.

The concept was still in the very early stages. “It’s easy to come up with a business idea. It’s hard to know which one to pursue. My litmus has always been, ‘Would I raise money from people that I care about?”

Making the leap.

When it came to Bond Street, David was willing. He identified two market trends that created the right opportunity for a lender like Bond Street:

  1. Traditional lending to small businesses has been declining precipitously over the last quarter century, due to bank consolidation and, more recently, regulatory pressure (after the Financial Crisis)
  2. Financial software companies, like Intuit, have been opening up valuable data via APIs

In 2013, he and co-founder Peyton Sherwood quit their jobs to build their FinTech startup.

Related: What Business Owners Should Know About Nepotism, Smelly Employees

Today, Bond Street loans range between $50 and $500K with an average loan of $150,000. Using technology, the company simplifies and accelerates the loan process for small businesses. The company can make a $500,000 loan available in 48 hours, not the 48 weeks that a bank would take. David believes he can bring the time down to as low as 48 seconds in the future.

The big opportunity.

Bond Street now operates in all but five of the US states: North and South Dakota, Nevada, Vermont and Tennessee. David sees a big opportunity to create more than just a lending platform.

“It’s about capital on-demand and building a long-term relationship with the business through technology.”

To apply for financing, businesses sync up their Quickbooks, Intuit and other financial data to the Bond Street platform. Their financial data can be harnessed not only to assess the loan investment, but provide company owners with valuable insights that they can use to develop business strategies and improve performance.

While Bond Street is a lending company, its goal is to reimagine what that even means.