What is Lendio?
“We bring together lenders and borrowers,” said Lendio CEO Brock Blake. Unlike peer lending and crowdfunding sites that have cropped up in recent years, Lendio’s platform connects lenders like banks and small business owners, helping the latter not only seek out loans, but also better their chances at getting funded.
Lendio’s purpose, said Blake, is “helping businesses get access to the financing they need to start and grow their businesses.”
In general, small business owners have a strange relationship with money. While adept in generating revenues and experts in running a business, Blake told Small Business Computing, “these businesses have so much on their plate they don’t have time to study and research all of their options.”
As a result, they default to their local banks when it comes to seeking out funding sources. “Nine times out of ten they get declined,” added Blake. Lendio, a free service for borrowers, helps small business owners cast a wider net, dramatically improving their odds.
Last year, according to the company’s estimates, it matched 85 percent of borrowers to business loans. In terms of helping borrowers get the loan or financing they need, Lendio’s success rate hovers in the 60-70 percent range.
The disparity — a 60-70 percent success rate versus 10 percent — underscores how Lendio’s technology can be a handy tool for companies that need capital. Going from bank to bank can add up to a colossal waste of time — with little to show in the way of funding — for busy small business owners.
“They don’t know all the different options that are out there,” said Blake. It’s a state of affairs that can “prevent them from growing,” he added.
Working With Lendio
Lendio works like many online marketplaces. You go to Lendio.com and fill out a profile. Based on that data, Lendio suggests matches depending on the amount and purpose of the loan. Last year, Lendio was responsible for $1.38 billion in loan approvals.
It’s a big number that can have an equally big impact in the lives of small business owners and their employees. By the company’s estimates, 65,000 jobs were created as a result.
Based on last year’s data, most borrowers seek funding for working capital (35 percent) and to purchase new equipment (22 percent). The average loan is for $45,000 – $50,000. The vast majority of loans (90 percent) are for less than $1 million, informed Blake.
Experian and Lendio
Lendio’s knack for connecting banks and small businesses has attracted the attention of a big credit agency. Experian, a credit reporting and marketing services company, recently teamed with the company to point borrowers that want to establish business credit to participating lenders.
When visitors reach Experian to check their credit scores, one of the options is to search for lenders and lending products that will help them get started on the road to good business credit — and help their businesses grow, too. That capability is powered by Lendio’s platform.
Not only does Lendio help startups achieve creditworthiness, Blake added, “it puts the business owner in the driver’s seat.”
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