There are many reasons borrowers or deals are handled through the shadow banking system, such as borrowers needing loans quickly or having substandard credit based on the criteria of traditional lenders. In the shadow banking sector, private lenders can base decisions primarily on the value of a borrower’s collateral, evaluating loans to borrowers with low credit scores. In a Q&A with GlobeSt.com, Harlan Peltz, the co-executive chairman of iBorrow, discusses why shadow banking has come under public scrutiny and how the sector is actually a benefit to the lending community.
Mr. Peltz expects to see the shadow banking trend continue to increase. With the changes to regulations and corporate decisions within the traditional banking system, enormous new opportunities for non-traditional finance have been created.