Edge Capital Lending: Understanding The Shadow Banking Subset For Subprime Borrowers

Edge capital lending, a subset of shadow banking, encompasses financial institutions and non-bank entities providing loans to borrowers often overlooked by traditional banks. It includes peer-to-peer and marketplace lending, where borrowers obtain funds directly from investors via online platforms. Its unique features, such as relaxed credit criteria, make it accessible to subprime and Alt-A borrowers, exposing lenders to higher risks. FinTech companies play a significant role in facilitating edge capital lending by providing innovative lending models and data analytics.

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