Ask HN: How to start a lending fintech company in the US?

I have been trying to find an answer for this question, but for some reason a straight forward answer seems elusive.

Can anyone here provide a blueprint of the main things you need to get figured out.

I'm not talking about the tech. I think nowadays there's a lot of fintech infra services that make this easier. I'm mainly talking about the incorporation, regulatory and legal process to move from an idea to launch a service that can capture and lend money.

Where do people start? Do they go to a lawyer and how do you find the right one?

I would really appreciate any information that can shed some light on this topic.

5 comments

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PaulHoule 4y ago ↗

I think you want to partner with a bank.

whoisjuan 4y ago ↗

Yeah. I have seen that fintechs always disclose that their banking service are provided by another existing bank, but how do you exactly find a bank to partner with?

PaulHoule 4y ago ↗

It's like any problem in business development.

(1) Have a good pitch

(2) Reach out. Calm down the butterflies in your stomach and make some cold calls. Connect to a banking executive you find on LinkedIn. Look at trade publications such as American Banker and if you are interested in somebody who gets interviewed give them a call. I own stock in a local bank I respect and I'd try finding an executive or board member at a shareholder meeting, ribbon cutting ceremony, rotary club or some event that they sponsor.

You're unlikely to get a deal out of the first meeting but if you ask a lot of questions you can test the water, refine your pitch (1), get more confident at (2), get more contacts and repeat.

Business development is not easy but I'm certain that there are bankers right now who would be excited to expand their business by finding the right partners.

neximo64 4y ago ↗

You get a special account from a bank called a warehouse that you pull your loans from. It's not an easy account to get. But you basically find a bank that can offer one (e.g https://www.usmetrobank.com/warehouse-lending/ - specifically for lenders offering mortgages). You agree to the terms you will lend the loans out, have collateral, etc.

Then you lend it out from there to customers based on the terms you agreed with the bank.

whoisjuan 4y ago ↗

Thanks for the reply. This makes sense. Is there an specific way to shop for a warehouse account? It’s this something that is offered in some productized way? For example, the bank you shared above doesn’t seem to have inbound sales, so it’s not clear to me how would your shop for this type of account.