BankLabs, a Little Rock-based innovation lab for banking technology, has launched a new spin-out company, a loan participation platform called Participate. At the same time, it has secured significant investments from FINTOP Capital and JAM FINTOP Banktech, two of the nation’s foremost fintech investment firms, to continue its mission to democratize loan trading across financial institutions of all sizes.
Participate is designed to reduce friction in the loan participation process through cloud-native technology and curated buy-side clubs, and automates the process of selling a portion of a new or existing loan. Once the loan is finalized, the platform also automates processes such as principal and interest splitting, collaboration on balances, notifications to the buy-side and more.
“We are delighted to partner with FINTOP & JAM FINTOP,” said Matt Johnner, President of BankLabs and Participate. “This is more than an investment, it is the creation of a new organization focused on helping America’s lenders improve and manage liquidity, reduce concentration risk and boost net income. JAM FINTOP’s involvement goes well beyond financial resources; they are essentially an R&D unit for the approximately 100 banks in their network. The FINTOP Capital team also brings impressive relationships beyond traditional banks, as well. The infusion of their resources and strategic insights will vault Participate to new heights.”
“We intend to create an environment where increasing the amount of participation loans creates a form of ‘backup liquidity’ that strengthens a bank’s ability to make necessary or strategic balance sheet adjustments more quickly and efficiently,” Mike Montgomery, CEO of BankLabs and Participate, said.
“We see first-hand the struggles of community banks to balance liquidity and easily manage their loan portfolios, and the timing could not be better for a tool like Participate,” said John Philpott, Partner at FINTOP Capital. “It is a privilege to be able to work with professionals like Mike, Matt and the entire BankLabs Participate team, and we are grateful to be partnering with them.”
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