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Profiles: meet small business leaders Friday, February 27, 2009
Small Business SnapshotCash code - Lending Cycle focuses on banking, = but its=20 culture is more like a software startupBusiness First of Louisville - by Terry=20 Boyd Staff Writer
Lending=20 Cycle Inc. has a product =E2=80=94 browser-based = work-flow software=20 that lenders use to track deals =E2=80=94 aimed at the rather = staid banking=20 industry. And its founder, John Jackson, once worked as a banker at First = Bank of=20 Kentucky Corp. in Louisville. But Jackson, Lending Cycle=E2=80=99s president and CEO, calls = his creation=20 =E2=80=9Cmore of a research company than anything = else.=E2=80=9D It is, he said, an 18-month-old company with a go-for-it, = high-tech=20 culture, focused far more on the next technological advance than = on the=20 next acquisition. Lending Cycle=E2=80=99s story is right out of circa-1996 = Silicon Valley startup=20 lore. Jackson, frustrated with paper spreadsheets and unconnected = data=20 streams, dropped out of banking three years ago and started = teaching=20 himself to program. His goal was to create software that allows lending officers = and bank=20 executives to track all loans =E2=80=94 commercial, real estate = and consumer =E2=80=94 in=20 all stages of the approval process, along with the performance of = the=20 people making them. And he did. For Jackson, 2007 was the beta year when he worked = out the=20 glitches in the LendingCycle brand software. But he didn=E2=80=99t = have a company,=20 only his software. Controlling overheadAt that point, the challenge was to get senior executives on = board=20 without paying six-digit annual salaries, Jackson said. So, he went looking for people willing to take a chance, = =E2=80=9Cand I talked=20 them into being investors.=E2=80=9D Now he has 19 people who work as volunteers, or for deferred = pay, at=20 the company=E2=80=99s headquarters off Blankenbaker Parkway. Three of the 20, including former First Tennessee Bank = executive Bruce=20 Schratz, invested between $25,000 and $100,000 in Lending Cycle = and have=20 an equity stake, Jackson said. Plans call for Schratz to lead the=20 company=E2=80=99s sales staff later this year, he said. Some will have a transition to the company as Lending Cycle = builds its=20 client base, Jackson said. Finally, some = =E2=80=9Cemployees=E2=80=9D just volunteer=20 because they=E2=80=99re interested in working with a new = technology. Jackson launched Lending Cycle in January 2008. After one year, = it has=20 13 bank clients, including 11 signed in the third quarter. All are = small=20 banks with assets of less than $1 billion. They include Financial Federal Savings Bank, based in Memphis, = and=20 Landmark Community Bank, based in Colliersville, Tenn. Lending = Cycle is in=20 what Jackson termed =E2=80=9Cadvanced negotiations=E2=80=9D with = one large regional bank=20 he declined to identify and in early negotiations with three other = banks. Customized dataLendingCycle subscribers pay $799 to $1,499 per month for = unlimited use=20 of the software, which operates through =E2=80=9Ccomputer = clouds,=E2=80=9D or clusters of=20 remote servers, and is not installed on clients=E2=80=99 = systems. Jackson declined to disclose the company=E2=80=99s first-year = revenue but said=20 that it =E2=80=9Cdramatically exceeded=E2=80=9D projections. There are larger competitors, such as Baker Hill, part of = Dublin,=20 Ireland-based Experian Group Ltd., and less expensive companies, = such as=20 Quest Credit Group, based in Fort Worth, Texas. But Jackson claims Lending Cycle has several advantages. Some bank software costs as much as $100,000 and is rigid in = that it=20 makes users conform to methods that call for a certain number of=20 processing stages or employee categorization, he = said.
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