RateGenius in the Austin Business Journal

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by RateGenius

An Austin-based loan processing company more than doubled its revenue last year after unexpectedly licensing some software and expanding its network of credit unions.

RateGenius Inc. added 100 new lenders to its auto refinance program, which is the core business of the 14-year-old company. Last year, RateGenius facilitated more than $250 million in loan originations. But the stouter revenue is also the result of the company licensing new loan origination software called FinanceGenius.

The software was initially developed by RateGenius for its internal use. But its lenders — community banks and credit unions — began asking for a similar tool that could process huge numbers of applications. The automation is designed to enable lenders to process more applications with fewer workers to make it profitable, CEO Chris Brown said.

Thousands of credit unions and community banks are processing such applications without the assistance of such automation. The cost of the software varies on the size of the lender. In addition to an annual subscription, lenders pay a fee per application that’s processed, Brown said. The company does not disclose annual revenue.

RateGenius began selling software subscriptions to its clients last year. Nine of them are now beta testing FinanceGenius and providing the feedback needed to work out any kinks, Brown said.

“When we roll this thing out we think it’s going to dominate,” he said. “All consumer lending can be managed by licensing our software. I never thought I’d be CEO of a software company.”

RateGenius, founded in 1999, employs 81 workers. It teams with credit unions and banks, as well as national lending institutions, to help consumers refinance new car loans. In 2001, the company completed a $3 million funding round from board members and angel investors. Former Texas Banking Commissioner Cathy Ghiglieri was the company’s founding CEO. Brown took the company’s helm in 2003.

The in-house software development strategy taken by RateGenius mirrors another Austin-based company.

Last month, the Austin Business Journal reported that SiteGoals LLC spent $100,000 developing software that it plans to sell through a separate company called Evenflow LLC. The software is designed to enable businesses to more efficiently generate quotes and proposals for prospective clients.

Loan origination software is common. But only 50 percent of the nation’s credit unions are using third-party loan origination software, said Pierre Cardenas, a senior consultant for Euless-based CU Lending Advice LLC.

Large banks typically use installed software that can cost $80,000 to $180,000. Smaller institutions usually employ Web-based software that costs $20,000 to $40,000 to deploy, plus $8 to $12 for each application that’s processed, he said.

RateGenius’s history in vehicle refinancing has given the company the experience needed for developing remote applications. California-based MeridianLink Inc. is one of its chief competitors, Cardenas said.

Brown said 2011 was a pivotal year for RateGenius, citing growth in all three segments of the business: the refinance business; an insurance business, and the software. He expects the revenue generated by FinanceGenius to eventually eclipse its refinancing revenue.

Montana-based Sky Federal Credit Union began using the RateGenius software in June 2011, when it employed seven loan officers who could take up to three days processing applications. Today, it employs two loan officers who process about 200 loans a month — usually in less than 24 hours per application, said Sky Federal Vice President Ben Kuss.

“We’re doing more with less employees,” he said

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A better way to refinance your auto loan. RateGenius works with 150+ lenders nationwide to help you save money on your car payments. Since 1999, we've helped customers find the most competitive interest rate to refinance their loans on cars, trucks, and SUVs. www.rategenius.com

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