The Small Business Administration recently released a report that shows it’s still difficult for small businesses to get the financing they need. However, alternative solutions like Lendio fill the void. Over the past 18 months, this online franchise program with a face-to-face community element has placed $16 million in loans with more than 500 small businesses.
Small Business Trends spoke with Mark Cottle, Executive Vice President of Franchising at Lendio, to learn more.
The company was founded in 2011 with the goal of giving small business owners a faster way to get financing. They have a three-pronged strategy that includes direct marketing, partnerships with companies like American Express, and franchises aimed specifically at underserved segments of the small business population.
“This in-market lending franchise program aims to reach Main Street businesses in smaller areas and local communities,” says Cottle. “Lendio franchisees network with accountants, lawyers and chambers of commerce in their areas to provide loan options to their small business clients.”
Here’s how it works for small businesses
Small business owners fill out a simple 15-minute application. After that, you get a personal finance manager who walks you through the process and offers. These franchisees connect you to a nationwide network of over 75 lenders that include names like Can Capital and Quick Bridge. These managers are small business owners with well-established relationships in their communities.
Small businesses receive multiple offers for everything from equipment financing and business lines of credit to a merchant cash advance. According to Cottle, Lendio works well because it leverages the old and the new.
“This union of online technology and local community gives business owners the best of both worlds when it comes to financing: the high-tech experience of an online lender and the high-touch experience of a community bank,” he says.
Lendio claims on its website that while banks turn down 80% of their applicants, they find funding for more than 65% of small businesses that apply to them.
Here’s what makes it different from other lending platforms
According to Cottle, about half of small business owners are hesitant to conduct financial transactions online. Lendio franchisees meet these people in person and also create local partnerships with community lending institutions.
This way, a Lendio franchisee is alerted when the bank cannot proceed with the small business loan.
“This often happens when a business needs less than $100,000 in financing or hasn’t built a credit profile thick enough to meet a bank’s specifications. In turn, Lendio franchise owners refer their customers, who are eligible for bank financing, to local banks,” says Cottle.
Here’s how to get a Lendio franchise
Regional franchisees have networks of small business owners in their areas. They attend events to market Lendio’s platform and work with those companies, according to Cottle.
“Franchisees are typically small business owners in their own right; they have well-established connections in the community and can leverage their understanding of local economic challenges to help business owners overcome financial barriers”
Lendio is approaching the billion dollar mark in loans that have passed through its platform. They plan to introduce new territories for franchisees.
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