The opportunity to innovate revolves around customer experience, Todd Nelson, business development officer at LightStream, told Powersports Finance.
LightStream, headquartered in San Diego, is the online lending division of Atlanta-based SunTrust Bank. The company offers unsecured loans within the prime market for any powersport vehicle — regardless of brand, mileage, or age.
Customer experience is one of LightStream’s strongest features, Nelson said. “Because the loan is unsecured, it allows the consumer to buy anything. If you think about it from a shopping perspective, if [the consumer] wants to buy an ATV, the traditional way of lending around that is you make a decision based on the collateral, but for us, the innovative piece is we will underwrite you as a consumer. If we think you are good for a $15,000 loan, we will give you that, and you can buy whatever you want to. I think it’s a better experience,” he said.
Many unsecured lenders in the space offer “one-size-fits-all-pricing” regardless of what the consumer will use their loan to purchase. Lightstream tends to price based on the consumer’s need and intent. “It’s innovating around the customer experience, and I think that’s an opportunity for other lenders as well,” Nelson said. “There is a better way to lend.”
Taking the paperwork completely out of the process is another way powersports lenders can invest in innovation, Nelson added. “I think for most consumers today, and certainly all in the future, they will not want to go through an arduous process,” he said. By allowing customers to fund and pay for their loan from their phone is a big “opportunity around innovation.”
For many traditional lenders, it is difficult for them to do their own technology because they have older systems, Nelson added. “If you have been lending in the powersports category for 20 years and you have technology that was developed in the ‘80s or ‘90s, it just doesn’t have the ability to do some of the things you want it to do today. In order to get over that hump, you’ve got to abandon what you have and invest in something that is more flexible. And that’s expensive and really hard to do as an incumbent lender.”