Recently, Barry Moltz of Business Insanity Talk Radio sat down with Lendio’s CEO Brock Blake to talk about alternative financing. You can listen above or read the transcript below.
Now back to Business Insanity Talk Radio. It’s time to get your small business unstuck on AM560, The Answer. Once again, here’s Barry Moltz.
BARRY: After the great recession, let’s face it. Banks were just not lending. Well, there has been an uptick in recent years. There still is not enough capital for small business to grow; and a new industry, as a result, really stepped in to fill this gap. Here to give us a road map is Brock Blake who is the CEO and founder of Lendio. His company has helped over 500,000 small business owners save time and money in a search for the right business loan. Lendio is positioned as the center of small business lending by placing over 20 and more small business loan products in one place; working with 50 plus, the best in class, small business lenders; and partnering with key small business brands. Brock, welcome to the show.
BROCK BLAKE: Thanks Barry. Thanks for having me. We’re excited to be here today.
BARRY: So, what are the typical challenges that small businesses face when they try to go out and fine a loan capital for their business?
BROCK BLAKE: Well, the thing about small business owners, they are managing all kinds of things. They are customers, and sales, and marketing, and inventory. And you know, they don’t have the time to go out and be an expert at all the various loan options that are out there. So what happens usually is that business owner, you know, thinks “Okay, I’ve been banking with my local bank for 10 years or whatever it might be. If anyone’s going to give a loan, it’s going to be my bank.” They go there. They fill out a bunch of long form applications, get their credit fold, and about 90%-95% of the time, they’re declined for the loan that they’re looking for. And a lot of times they think, well that’s because I’m a bad creditor, you know, or whatever. Many times that bank only has one loan product, and when there’s about 25 or 30 different loan products – that business owners could get. And so you know, that’s a pain and you’re going bank to bank to bank trying to figure out which is the best option for you. So what we’ve done at Lendio, is consolidated all that and made it simple for that business owner. All the loan options in one place and help them get access to loans that are may be non-traditional in nature. Not just your traditional bank or credit union loan that you’d get there so…
BARRY: So Blake, give us an idea because I really call this year really BB, you know. It’s really ‘beyond bank’. So what other kinds of alternative financing and capitals really accessible to small businesses now?
BROCK BLAKE: Well you know, for a long time there’s been from your non-traditional, like equipment loans, or cash receivable, or factory purchase order financing, some of those types of loan options that have been around a long time. For the last 4 or 5 years, there’s has been some really innovation with what’s called working capital loans, purchase cash advance loans, term loans and what’s happening is – So as you’ve mentioned, it’s kind of in your intro, things are moving up stream. You know, the recession hit and they said it’s going to cost me as much money to underwrite a $1,000,000 loan as it does to underwrite a $50,000 loan. A million dollar loan is much more profitable for me. So what they’ve done is they’re said, I’m going to move up stream. I’m going to only focus on loan side of half a million or a million dollars and so it left a huge gap. All these mainstream business owners, restaurant owners, landscapers, dry cleaners that don’t need half a million or a million dollars. They need, you know, $30,000, or $10,000, or $75,000. So because of that gap, what’s happened is that these new innovative alternative lenders that said, Is there a way to offer a loan to that type of customer, that smaller in nature and can use technology to be a little bit more innovative? And that’s what happened over, you know, since the recession in 2008 is you’ve got innovative lenders creating new products to help these small business owners and that’s why they’re in a form of purchase cash advances, term loans, working capital loans. And you know, it’s really opened up the whole new world for business owners. That’s, you know, what we’re excited about.
BARRY: So Brock, in the minute we have left. Give us a very simple checklist about what a small business owner really needs to secure that first loan?
BROCK BLAKE: Well really, there’s two points that they’re going to look at. One is your credit score. As a business owner, you want to really manage and understand what your credit score is. Is it good? Is it bad? How can you improve it? And then the second thing is, they’re going to want to look at the operations of your business. And usually that data comes from your bank account transactions. They want to see your inflows and then your outflows of your bank account. Are you generating any cash? And most of the underwriting is based on your inflows and outflows of your bank account, inflows of your merchant account, or you know, your personal credit score.
BARRY: And so that’s really where you start? So you have to really make sure that those things are really something that the bank really wants to lend against or sorry, the ultimate source once they’re lending against?
BROCK BLAKE: Right.
BARRY: And when people on your site – really quick. When on your site, just really want to give them the idea. How much time does it take to apply and what can I recently expect the type of loan and how much money can I get?
BROCK BLAKE: You know the how much money really depends on the type of business you’re in. How long have you been in business, your revenue, that kind and such so it’s kind of hard to answer that quickly but its free at Lendio. You come on in about five minutes, or not even that, may be three minutes. You give us a few piece of information. We’re going to tell you the types of loan options that you’re going to qualify for.
BARRY: Excellent. Brock, I’ve got to leave it there. The website is called Lendio, L- E- N- D- I- O.com. If you want to get your business unstuck in 2015, stay tuned. Don’t go anywhere. I’m going to show you exactly how to do it. This is AM560, The Answer.
To see your loan options in one minute or less for free, click here to get started with Lendio.
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