Name
Global FinTech Guide
Country _ Name
United States
SectionTitle
Loan services/factoring/loan broking/finetrading
Body
FinTechs belonging to this category act as a loan creditor (even short and very short-term loans), are broking loans or receivables or conduct factoring of loans, which were given to private or business customers. In this business area you also find “peer-to-peer” (P2P) services, in which FinTechs enable a multitude of users to give loans (and brokered by the FinTech-platform) to other users or companies.

Finetrading is hereby a financial service of FinTechs, where they buy due receivables and grant the debtor an extension of payment time. 

As an ancillary service some FinTechs offer alternative credit assessment services to check the solvency of a borrower.

Introduction

Attitude of the country towards loan-giving-, factoring-, brokerage-, finetrading- and ancillary services

In the United States, the regulatory framework for loan-giving, factoring, brokerage, and related financial services is complex and varies significantly depending on the nature of the services and the entities involved.In general, the level of regulation depends primarily on whether the activity involves consumers, securities, or deposit-taking, as these factors determine the applicable federal and state regimes.

Factoring and Loans: Generally, factoring and commercial loans are not subject to extensive federal regulation, except when they involve securities or conducted by banks. The distinction is made between debt instruments that are securities, which are regulated by the Securities and Exchange Commission ( SEC) and require registration or an exemption for sale, and other financial instruments, such as loans, which are not classified as securities unless they meet specific criteria. Banks are regulated under numerous federal and state laws, including truth-in-lending regulations overseen by the Office of the Comptroller of the Currency ( OCC) . Non-bank entities engaged in factoring, invoice trading, or commercial loan services typically face limited federal oversight, though several states—such as California, New York, Utah, Virginia, and Connecticut—have enacted commercial finance disclosure or loan broker licensing laws applicable to small-business lending FinTechs.

Fractionalization of Assets: The fractionalization of assets, where ownership is divided into smaller shares, has gained a little bit of traction in various financial services, but is difficult from a regulatory perspective. This practice can involve both physical assets and digital representations of assets, such as tokenized securities or fractional ownership of real estate. In the U.S., fractionalized interests in assets are generally classified as securities if they convey an ownership stake or profit-sharing rights. SEC enforcement actions commenced over the last few years involving tokenized and fractionalized offerings have reaffirmed this approach . FinTech platforms dealing in such assets must ensure compliance with securities laws , including registration or reliance on exemptions such as Regulation D, Regulation A+, or Regulation CF .

Brokerage Services
: FinTech platforms that facilitate the trading or brokerage of securities must comply with the rules of the SEC and the Financial Industry Regulatory Authority (FINRA), which is the self-regulatory organization responsible for supervising broker-dealers and enforcing industry conduct and investor-protection standards. Platforms engaging in securities brokerage are generally required to register as broker-dealers and adhere to applicable requirements governing trading practices, supervision , and financial reporting. ( See ' also “ Financial Advisory and Brokerage Services.”).

Peer-to-Peer Loans: Platforms offering P2P loans are generally viewed as dealing in debt securities and are subject to regulation under the Securities Act, which may require registration and ongoing compliance. While early platforms such as LendingClub and Prosper popularized this model, most have since transitioned to institutional funding rather than purely retail peer-to-peer lending.

Online and Consumer Lending: Onlinemortgage, consumer loan brokerage, and auto loan platforms have expanded rapidly in recent years. These platforms assist consumers in identifying and securing loans and are regulated depending on whether they are classified as lenders or brokers. The Consumer Financial Protection Bureau (CFPB) oversees consumer-facingfinancial services, enforcing the Truth in Lending Act (TILA), Equal Credit Opportunity Act (ECOA), and related regulations. The Federal Trade Commission (FTC) also plays a role in regulating advertising and consumer protection for non-bank lenders. While the CFPB continues to supervise consumer credit markets, its enforcement activity has slowed under the current federal administration, as several investigations and pending actions have been paused or withdrawn. The agency’s priorities, scope of oversight, and even its continued existence are currently being reassessed amid ongoing political and judicial challenges to its authority and funding structure.

Receivables Trading: The regulation of receivables trading depends on the structure of the transactions and the nature of the underlying assets. Certain structures, such as, repurchase agreements (repos) may be subject to specific regulatory oversight depending on the counterparties involved.

Overall, while many areas of lending , factoring, and brokerage remainrelatively unregulated, participants must navigate a patchwork of federal and state regulations depending on their specific products and counterparties. The growth of asset fractionalization and tokenization adds further complexity, as these interests often fall under securities regulation.



Legal affairs

Obligations and requirements to provide loan-giving-, factoring-, brokerage-, finetrading, and ancillary services described above

As outlined above, the regulatory landscape for non-consumer-facing financial services, such as loan-giving, factoring, brokerage, and finetrading, is relatively unregulated at the federal level.. Nevertheless, there are several important compliance considerations:

Industry Standards and Memberships:
Many market participants voluntarily adhere to industry standards and best practices, including membership in trade organizations that provide model documentation and transparency guidelines. These frameworks help maintain market consistency even in the absence of comprehensive regulation. At the state level, some jurisdictions require registration or licensing for loan brokers or commercial finance providers, particularly where services are extended to small businesses..

Consumer-Facing Products and Services: Consumer-facing businesses, including online mortgage and consumer loan brokers, are subject to a broad range of regulatory requirements emphasizing disclosure, fairness, and consumer protection. The CFPB and FTC oversee these obligations, including requirements for transparent disclosures, fair lending practices, and advertising accuracy.



Additional comments regarding the legal situation for loan-giving-, factoring-, brokerage, finetrading-, and ancillary services or what FinTech’s must be aware of in this business area

For fractionalized or tokenized assets categorized as securities, the obligations are significantly more stringent. Offerings generally rely on exemptions under Regulation D, Regulation A+, or Regulation Crowdfunding, each carrying distinct disclosure, reporting, and investor-eligibility conditions.

While non-consumer-facing financial services face limited direct regulation, adherence to recognized industry standards and trade association membership can enhance credibility and risk management. In contrast, consumer-facing services are more heavily regulated, emphasizing transparency and fair treatment of borrowers.



Economic conditions

Market size for loan-giving-, factoring-, brokerage-, finetrading- and ancillary services and biggest companies in this business area

The U.S. financial services market including loan origination, factoring, brokerage, finetrading, and ancillary services, has evolved rapidly alongside FinTech innovation.

Online Loan Brokerage: The online loan -brokerage and origination sector has seen substantial activity, particularly through FinTechs that securitize or distribute originated loans. The U.S. online-lending market is estimated to exceed USD 300 billion in 2025, reflecting strong growth driven by consumer demand for technology-enabled credit access and institutional adoption of automated underwriting. In the online mortgage space, major lenders such as Rocket Mortgage and LoanDepot remain among the largest originators. Prominent online consumer-finance platforms include SoFi and Upstart, both reporting significant year-over-year loan-origination growth. In the auto -financing segment, companies such as Autotrader, and LightStream operate alongside FinTech entrants and traditional banks that have developed integrated digital platforms. Many established financial institutions now partner with FinTech firms to leverage artificial-intelligence-based underwriting, embedded-lending technology, and end-to-end online origination systems to enhance efficiency and competitiveness..

Factoring:
The U.S. factoring industry handles more than USD 120 billion annually in receivables. FinTech participation is growing, particularly in supply-chain and invoice-trading models led by companies such as BlueVine, Fundbox, and C2FO. These platforms provide digital tools for working-capital optimization and short-term credit. In parallel, several FinTech and blockchain infrastructure firms are exploring the tokenization of receivables and trade-finance assets to enhance liquidity, enable fractional ownership, and facilitate secondary-market trading. While the market for such tokenized receivables remains nascent, pilot programs and regulatory sandboxes are under development to assess their viability within existing securities and commercial-finance frameworks..

Finetrading: Finetrading, typically referred to in the U.S. as supply-chain finance or trade-credit extension, remains a relatively niche segment but continues to attract interest from B2B FinTechs seeking to streamline payment terms for small and mid-sized enterprises..


Peer-to-Peer Lending:The peer-to-peer lending model has largely transitioned to institutional or balance-sheet funding structures, as compliance costs and securities regulations have made retail investor participation less viable. Platforms such as Prosper and Upstart continue to originate significant loan volumes but now rely primarily on institutional capital, while LendingClub operates as a regulated digital bank. Kiva remains active as a nonprofit micro-lending platform distinct from commercial P2P models. As a result, true retail P2P lending has become a marginal segment in the United States, with marketplace and embedded-finance platforms now dominating alternative consumer credit distribution..

Crypto Lending: The crypto-lending market has entered a renewed growth phase following the disruptions of 2022–2023. Institutional participation has expanded significantly, with both traditional banks and FinTech platforms beginning to offer or prepare for loans collateralized by crypto-assets such as bitcoin and ether. Decentralized lending protocols, led by Aave and comparable platforms, now account for a major share of on-chain credit activity, with the overall crypto-collateralized lending market estimated to exceed USD 50 billion in Q2 2025 alone. Crypto-backed lending has also become increasingly popular among investors seeking to access liquidity or finance new investments without selling their holdings. While regulatory oversight and market volatility remain relevant considerations, the segment’s growth trajectory indicates a steady institutionalization and deeper integration into mainstream financial markets. Further, many things that are called crypto loans, such as “borrowing” from non-custodial liquidity pools, likely are not loans at all under U.S. law.



Additional comments regarding the economic situation for loan-giving-, factoring-, brokerage-, finetrading- and ancillary services or what FinTech’s must be aware of in this business area
The U.S. market for loan origination, factoring, and related financial services continues to evolve rapidly, driven by technological innovation and shifting investor appetite. While traditional banks retain a dominant share of commercial and consumer lending, FinTechs have become central to digital origination, credit analytics, and alternative-financing infrastructure. The boundaries between online, institutional, and decentralized lending are increasingly blurred, with tokenization and crypto-collateralization emerging as credible extensions of structured-finance activity rather than isolated experiments.

Factoring and receivables platforms are expanding through digital and blockchain-based models that enable faster settlement and liquidity for small and mid-sized enterprises. Similarly, crypto-backed lending has grown into a significant sub-segment, now exceeding USD 50 billion in quarterly activity, reflecting renewed institutional confidence and borrower demand for asset-based liquidity solutions.

The U.S. market is also moving toward deeper partnerships between FinTechs and established financial institutions, with technology providers increasingly serving as embedded infrastructure within regulated entities rather than standalone lenders. This structural integration underscores the sector’s maturation and signals a longer-term alignment between innovation and compliance-driven financial intermediation.

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