At Onyx IQ, our goal from the beginning has always been to provide alternative lenders with the technology and insights they need to thrive in any economic environment.
In the spirit of this goal, we’re kicking off our executive interview series. We will be speaking with subject matter experts across the MCA/alternative lending industry. These interviews will cover a wide range of topics, including, but not limited to, industry trends, challenges, and success stories.
For our very first interview, we are starting close to home with Onyx IQ’s VP of Sales, Elizabeth Schuerman.
Expect to discover how she began her alternative lending journey, what she expects for the industry in 2023, and the role of automation in driving lending success.
Let’s get started!
Background and Professional Experience
Q: Tell us about your journey. What path did you take to the alternative lending industry?
I went to school to be a teacher but pivoted away from that role fairly quickly. I’m supposed to be teaching sophomore government (laughs). Before joining Onyx IQ, I worked in various industries (debt collections, financial, and risk services) and in several different roles primarily geared toward sales and customer retention.
Q: How did this diverse experience help you as you transitioned to the world of alternative lending?
My professional experience gave me the financial industry foundation I needed to be successful in my role with Onyx IQ. I’ve spent a lot of time learning about how different financial institutions operate, what’s important to them, how they look at regulation and compliance, etc. It is this knowledge that allows me to deliver value to our customers today.
Q: What does a typical day look like for you at Onyx IQ?
I’m not sure there is such a thing as a typical day at a tech startup.
While my official role is revenue-focused, I wear many hats at Onyx IQ. When I’m not traveling all over the US for conferences or client meetings, I have my normal sales tasks across the entire sales funnel—lead generation, product demos, prospect follow-up, contracting, and kick-off. In addition, I spend a lot of time and energy on our marketing efforts, including brainstorming, collaborating, editing copy, doing interviews, etc.
The best and most exciting parts of my week are the moments spent with my teams and with Jay. I work with the most talented and humble people. We help each other, we work together, we strategize, and we drive real change within the company and product.
Industry Outlook: Alternative Lending
Q: What are the top challenges facing the alternative lending industry right now?
As the industry continues to evolve, we are likely to see new forms of regulation at both the State and Federal levels. Many times, regulation and technology go hand in hand.
We saw this on the collections side with Reg F and Reg E over the last few years. For example, the rise of SMS and email in collections resulted in new regulations governing collections communications, and these new laws meant more technology to better comply with the new regulations.
With respect to Merchant Cash Advance, we’re starting to see disclosure requirements in certain States. State regulations will continue to appear, whether it be related to disclosure or something else, and I think more Federal regulation is probably just around the corner as we see this industry grow.
Being competitive is also a big challenge. There are a lot of players in the industry. Whether they are veterans in MCA or they migrated over from Mortgage—there is no shortage of competition. So how do you stay competitive? How do you get your brand to stand out from the crowd?
Q: What are you excited about in 2023?
I think recent advances in technology are going to revolutionize the industry.
You can see the benefits firsthand with a platform like Onyx IQ: reducing clicks, reducing human error, and eliminating the need to jump in and out of multiple platforms and tools to manage lending portfolios (side note: with respect to our platform, these benefits should only multiply as we continue to implement our 2023 roadmap).
Outside of that, another 2023 lending prediction is that the value of data is going to come into play more and more in alternative lending, whether it’s consortium data or our own data over time. There are so many insights between those numbers that the human eye can’t see—things that machine learning can pick up on and find trends.
For example, the right data and algorithms can help lenders predict a downward economic climate and pivot accordingly. They can use data to reduce risk and minimize the impact that a recession might otherwise have.
Q: How are alternative lenders approaching risk in the current economic climate?
Again, it’s all about data.
Evaluating risk is always going to come down to data. How do you look at your data and extract insights to better understand who is a good borrower and who is a bad borrower, and why?
More and more, lenders are incorporating decision engines to help measure and evaluate borrower risk. These tools help you look at success across your loan amounts, industries, credit scores, etc., and set appropriate thresholds so you can say, “This is where our sweet spot is, and we want to be really quick to approve clients that hit this sweet spot.”
And maybe there are prospects who are outliers who aren’t necessarily traditionally bad clients. Are you able to incorporate alternative data sources to better understand the risk of doing business with this client?
So we’re separating good customers, bad customers, and unknowns, then using data to decipher which bucket someone falls in and how you want to handle that customer.
Thoughts on Lending Technology
Q: What features should funders look for in loan management software?
As cliche as it may sound, the ability to automate your processes is the most important feature for an alternative lender to look for. Automation is how you scale your business in uncertain times without adding additional costs.
The biggest way to highlight the value of automation is to think of the cost of a full-time employee: if you hire two junior-level employees to try and scale your business, it’s going to cost you $70,000+ per year.
As you grow and hire, your business will become increasingly expensive and increasingly error-prone. The more people you hire, the more likely they are to fat-finger a data entry or make mistakes or approve something that maybe shouldn’t have been approved.
Why take on additional recurring costs and risks when you can grow your business with technology?
Q: How important is stakeholder collaboration? What role does technology play?
Obviously, collaboration is immensely important—but what the industry really seems to be lacking is the ability to “self-serve.” Meaning whether you’re internal (underwriting, operations, etc.) or external (ISO, merchant, etc.), the ability to “log in” and complete tasks or check for updates is key.
In our post-pandemic world, this is no longer a “nice-to-have”; it’s a “must-have.”
Wrapping Up
Q: What advice would you give to somebody newly entering the alternative lending space?
In general, in alternative lending, or any industry you work in, the best thing you can do is network. Make relationships, connect on LinkedIn, shake hands, and give out business cards. It’s such a small world, and you never know where your next opportunity is going to come from.
If you’re new to a sales role, whether you’re on the tech side or broker side, I would say be aware of your own personal brand.
Make sure you’re authentically you. When you aren’t authentic, people realize it pretty quickly, and it’s going to throw up a red flag and make them potentially not want to do business with you. Being honest, being able to say, “I don’t know the answer to that, but I can get back to you,” is extremely important.
From a broker’s perspective, if you’re matching merchants with the appropriate lenders and doing a little bit of due diligence on their behalf, lenders are going to want to continue to work with you and grow their book of business with you. Do a quick Google search (reverse the address!), look at the documentation submitted, and do your best to match merchants with the right funder.
Q: Closing thoughts?
2023 is going to be a stellar year for Onyx IQ!
There is a slick new user interface that will be released in the coming weeks as well as a number of different portals – allowing tons of collaboration and self-service.
Book some time with me and I’ll walk you through the whole roadmap in detail.
To learn more about the Onyx IQ platform, reach out for a demo here.
