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Nonbank institutions seem to have knocked traditional banks out of the running when it comes to lending.
In 1974, banks controlled the lending industry, holding 62% of total loans. Almost five decades later, nonbanks issued 68% of all mortgages in the
The rise of nonbank lending has given people alternative options, putting the power into consumers’ hands
What Is A Nonbank?
The
However, NBFIs facilitate alternative financial services, such as investment, risk pooling, financial consulting, brokering, money transmission, and check cashing.
Because of their enormous offerings and benefits, consumers have been drawn to loans provided by nonbank institutions.
With a nonbank loan, people sometimes bypass long bureaucratic processes to more straightforward procedures like completing loan applications and payments digitally with no initial fees and at low-interest rates.
Experts believe that nonbank financial institutions have been able to cater to these demands and satisfy customers by adapting to the digital age and remaining open to company growth.
Threat To Traditional Banks?
Players like
Carving A Niche In The Financial Space
Mill City as an example seems to be gradually carving a niche for itself in the nonbank financial space.
Founded in
Mill City says it primarily focuses on investing and lending to privately held and publicly traded companies.
Operating History
In 2013, Mill City elected to become a business development company (BDC) under the Investment Company Act of 1940, raising approximately
The company operated as a BDC until
Over the years, Mill City notes that it has provided nonbank lending and specialty finance to companies and individuals on both a secured and unsecured basis. The primary specialty finance solutions the company provides are high-interest, short-term loans, which occasionally involve the company obtaining collateral as security for the borrower’s repayment of funds.
The loans typically have maturities ranging from nine to 12 months and may involve a pledge of collateral or, in the case of loans made to companies, personal guarantees by the business’s principals.
Principal Sources Of Revenue
Mill City’ssources of revenue include origination fees, closing fees, exit fees, interest, extension fees, and revenue participation. The company targets individuals, business owners, real estate owners, housing redevelopers, and small-business owners.
Nature Of Lending Operations
Nonbank lending and specialty finance
Asset-backed loans
Settled claim purchases
Tax anticipation loans
Real estate bridge loans
Litigation finance
Public market companies
Title loans
Opportunistic acquisitions
Mortgages
Since starting nonbank lending operations in
Key Investment Considerations
Management has experience in entrepreneurial ventures and finance.
The company is not subject to many of the regulatory limitations that govern traditional lenders or institutional competitors.
The company’s lean operating costs allow for greater income statement leverage.
Management continues to focus on moving the blended portfolio returns “up and to the right” in the context of proper risk mitigation.
The company takes advantage of inorganic growth opportunities in the market through complementary and accretive acquisitions.
Read more about
Founded in 2007, Mill City is a short-term non-bank lending and specialty finance company. Additional information can be found at www.sec.gov.
This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.
Contact Details
TraDigital IR-
+1 917-658-2602
john@tradigitalir.com
Company Website
https://www.millcityventures3.com/
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