United States, Co... Preferred Partner "Executive Summary The Company LenderBase Corporation has developed an Internet-based database of sub-prime mortgage loan programs which gives mortgage brokers unlimited real-time access to tens of thousand of programs offered by wholesale lenders. Lenderbase.com’s mission is to become the leading provider of business-to-business solutions to the non-conventional mortgage industry. This new use of E-commerce will drastically reduce the amount of time mortgage brokers spend searching for loan programs for their clients, and allow them more time to concentrate on developing new business. LenderBase.com will allow wholesale lenders to market their sub-prime programs to brokers anywhere in the country, and will enhance existing traditional and Internet marketing strategies, thereby lowering overall marketing costs while increasing their national exposure. The Concept The founder and CEO of the company, Charles Cartwright, conceived the idea for LenderBase in 1996 when he was an assistant branch manager for a sub-prime wholesale mortgage lender. During his visits to the offices of mortgage brokers, he heard them voice their frustrations over the amount of time they were spending trying to place loans with lenders. The process of finding a lender that offered a loan program matching their borrowers criteria could take a broker anywhere from several hours to several days. It was not unusual for a broker to lose a loan to a competitor who had contacted the client during the time it took to place the loan. Therefore, time is of the essence for mortgage brokers and LenderBase.com will significantly reduce this process down to a few minutes. The frustrations Mr. Cartwright faced as a lender included the fact that it was impossible for the account executives to visit every broker’s office for the purposes of distributing and explaining their loan programs. Lenderbase.com allows for the lender to have their programs accessible to brokers 24 hours a day, 7 days a week. Also, any lender with loan programs in LenderBase.com will be searched each time a broker inputs a loan scenario and conducts a search of the database. The Market The market for this type of product consists of an estimated 65,000 mortgage brokers and 3,000 wholesale lenders dealing in sub-prime loans nationwide. LenderBase.com has differentiated itself from its competition by not forcing the mortgage broker to submit the loan through the web site and have lenders bid on the submission. LoanTrader, LION Inc., and LoanCity are websites which all operate under that principle. From our previous experiences and feedback from other end users of these sites, the response time after submitting a loan is often very lengthy or non-existent. We wanted to allow the broker the ability to still control the loan process, by giving them the choice of which lenders look at the loan submission. Executive Summary The Marketing Strategy LenderBase.com has two distinct marketing strategies, due to our need to attract both lenders and brokers. We have found that our best success in attracting the lenders is by direct contact. We have a working knowledge of sub-prime wholesale lenders, and have also used other means such as the Internet, professional associations and organizations, and trade publications to locate our potential suppliers. Also, with appropriate funding in place, we will be able to attend national and large metropolitan-area trade shows which will give LenderBase.com national exposure to both of our target markets. We will institute direct and electronic mail campaigns to brokers, and have also explored the viability of offering a referral incentive program to our subscribing brokers. Start Up Costs LenderBase Corporation is seeking a strategic partner to provide $200,000 in capital to finance further development and enhancements to our hardware and software, and initial capitalization of our national marketing strategy with the goal of attracting lenders and brokers to subscribe to LenderBase.com. We will then require an additional $50,000 to fund ongoing marketing efforts, technical support and enhancements. Based on current assumptions, after the company has 12 lenders and 340 brokers subscribing on a monthly basis, it should achieve positive operating cash flows, which are estimated to occur by the end of the first quarter of 2001. Revenues and Profitability The company’s financial projections are based on conservative assumptions of Internet usage, growth of financial transactions on the Internet, and the number of billable users subscribing to LenderBase.com. Based on these assumptions, LenderBase Corporation will achieve revenues of $16.2 million a year by 2004. See the projections attached. Company Description Employees Currently, the four founding members are completely overseeing the operation LenderBase Corporation. In addition to their formal roles, the founders are leading all initial sales efforts in the first six to twelve months. Upon funding of LenderBase Corporation, initial hiring will focus on sales professionals with industry experience, and then technical developers for further site enhancement and functionality. As the client base increases and we have a steady revenue stream, customer service and support staff will be added. Facilities LenderBase Corporation currently leases office space in Denver, CO until the end 2001, with an option to occupy a larger space when the situation deems necessary. The company anticipates the hiring of sales professionals in satellite locations by the first quarter of 2001. Most likely, the company will maintain a corporate headquarters location in the Denver, CO area. Operations Plan LenderBase Corporation’s post funding plan will focus mainly on enhancing the operatio...
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