Denise Thomas, CEO of ApplePie Capital, first met with Tradestreaming earlier this year. We sat down with Denise to catch up on the state of her business, drill down on what’s working for the marketplace lender to get a view on where she’s taking the business in 2016 and beyond.

interview with Denise Thomas, CEO of Apple Pie Capital

What is ApplePie Capital?

ApplePie Capita is a marketplace lender that focuses exclusively on the franchise market.  We follow in the footsteps of other marketplace lenders such as Lending Club, Prosper, and SoFi, who have transformed the way consumers access loans online.  We are bringing this efficiency, speed, and flexibility to franchises businesses across the US. And for investors, we are opening up a new asset class of franchise debt, which has never really been accessible in a scalable way before.

Denise Thomas, CEO of ApplePie Capital

What’s your background — why did you start Apple Pie?

Throughout my career, I have been passionate about increasing access to capital and creating new asset classes for investors, something I achieved as an executive at multiple companies prior to ApplePie. While researching needs in the small business loan market, I found out how difficult it can be for franchise owners to obtain the capital necessary to buy or improve a franchise unit — even though franchises are far more likely to be successful than your average small business.

There are nearly 800,000 franchises operating in the US, and it’s estimated that 1 in 20 working Americans–over 8 million people–are employed through the industry.  I founded ApplePie Capital because I believe in the potential of the franchise industry, and I want to fundamentally democratize access to the capital markets so that individual entrepreneurs can gain access to the capital they need to be successful. And, I believe this is an excellent fixed income offering for investors.

How do franchisees normally get funding? Is there an inefficiency in the market?

Many people don’t realize just how big of a market franchises represent. There’s an annual capital demand of over $45B. To date, that financing has been mostly through traditional banks and SBA loans and 401k rollovers.  Since 2008, the banks have moved upstream with their lending activities, and have been doing less and less originations of under $1M.  For them, the cost of originating a loan of $200k is the same as $2M and their processes are slow and inefficient, so there is little incentive for them to focus on smaller loans.

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