"I Know People"

Jeremy weaver needed credit. He runs a Chattanooga-based startup, Wind River Tiny Homes, which builds small but elegantly crafted houses, and wanted to expand. In order to afford it, he needed lumberyards and other vendors to give him an advance. They’d provide him with materials, and he’d pay them back when a house was sold. He’d come to vendors prepared to talk numbers, but oneWeaver had stumbled onto something called social finance (or, groan, so-fi for short). Some lenders, in evaluating whether a person is a good loan candidate, would scour their social media networks. The more upstanding people were in there—family, gainfully employed friends, and so on—the more a lender felt at ease. And that philosophy is now expanding to small businesses—a big deal for startups whose lack of credit or business history keeps them locked out of traditional loans.