Starting a business can be exciting, but difficult — one of the major setbacks entrepreneurs face is funding. If an entrepreneur doesn’t qualify for a loan or have something to put up for collateral at a bank, that can seem like the end.
Which is where the alternative lending company Lendio steps in. Alternative lending, basically getting loans from somewhere besides a bank, has been on the rise. Forbes reported last year that “lending was among the earliest segments of finance to be disrupted by the technology revolution.”
Co-founders Brock Blake and Trent Miskin founded the company in 2011 after co-founding a different company, “Funding Universe.” The idea behind Funding Universe is similar to what Lendio does now — connecting entrepreneurs to investors, angel investors and venture capitalists. But Blake and Miskin realized the number of small businesses that actually raised money through an angel investor or venture capital was remarkably low.
“It’s usually the high-growth tech companies or something like that,” Blake said. “Most mainstream businesses, restaurant owners and landscapers and retail shops, they need a loan. So we pivoted in 2011 to Lendio where we were saying, OK, let’s help these small business owners get access, connect them to lenders and banks across the country and help them get a loan.”
And that’s what they’ve been doing ever since, matching up small business owners with companies willing to invest in their product or business. Most of the matching is done online or over the phone, Blake said, at no cost to the business owners who want to “shop around.” Then business owners are connected to funding managers, who continue to walk them through the process of applying for a loan and choosing the best lender.
“A lot of times, you can go online and you can comparison shop, but a lot of times a business owners, when it’s actually time to process the loan ... usually you kind of want to talk to someone,” Blake said. “We pride ourselves on this, we call (it) ‘high-tech, high-touch experience.’”
As part of creating the “high-touch” experience, just a few years ago, Lendio decided to add another unique aspect to their business: franchising.
When Blake and Miskin starting Funding Universe, Blake explained, they did a lot of networking with different chambers of commerce, attending events, meeting bankers and insurance agents and so on.
“A lot of business owners like to do business in their community. They want to talk to someone, they want to sit down face to face, they want to get a referral from their bank or from their accountant,” Blake said. “So we decided to marry those two worlds together and offer the ability for franchisees to leverage our whole system ... and go out and build a business in your community.”
Jason Kirkham owns the Lendio franchise for the Utah market. “My job is to be the face of the business here in the community, meet with business owners in person and give them that personal touch that they want,” he said.
A big part of being the “face” of the business, and the building up of relationships, is trust. Kirkham and other Lendio employees are committed to finding business owners the best option for them.
“I even tell people, come to me first, I’ll give you honest advice and I’ll even tell you if you qualify to go to your bank,” Kirkham said. “My clients, because of that trust factor, they know I’m not going to harm their business. I want them to get a loan now, but also in six months ... help them continue to grow their business and be successful in it.”
Lenders found that Lendio typically has higher rates on loans, and loans tend to be shorter-term, because they’re higher-risk. Business owners don’t have to pay to get help comparing offers; instead, lenders pay Lendio from fees and interest they charge to business owners.
Kirkham is one of 75 franchises across the country, although that number is still growing, according to Blake. The company headquarters themselves recently relocated to Lehi. In total, Blake estimates they have upwards of 300 employees, 220 of which are in Utah. As of this summer, Lendio has funded around $1.5 billion in loans, which Blake estimates has created nearly $5 billion of impact and created tens of thousands of jobs.
“At the end of the day, that’s what we get excited about in the morning when we come to work, is the individual stories of those business owners that we’re helping,” Blake said. “The impact it’s having on their ability to hire employees and pay for their kids’ college education and open up a second location, all those things that they hope and dream to accomplish, we love being a part of that story.”
Business owners interested in checking out lenders and loan options through Lendio can begin by visiting the company website, http://lendio.com.