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Lendio is a platform that matches business owners with lenders and has provided over $750 million in loans to over 30,000 borrowers. Onto our Lendio Review! Lendio claims to be “America’s largest small business loan marketplace” and is very similar in structure to Fundera by providing a matchmaking service for business owners and lenders.
Lendio itself doesn’t offer any type of loan service or product, instead, it matches businesses with lenders who provide a range of services which is best described as a marketplace. Lendio has over 300 lenders on the platform including some very prominent industry names such as Kabbage, OnDeck, and BlueVine. They also work with prominent banks including Bank of America, Chase, and American Express, with payment services including PayPal.
These are well-established lending platforms that Lendio simply connects eligible borrowers to and borrowers then compare lenders to determine which offer is best for their business.
Borrowers upload their personal and business information to be matched with lenders according to their eligibility criteria, making Lendio’s service fast, simple, and convenient.
Let’s take a closer look with our Lendio review.
- Lendio is a business funding matchmaker.
What is Business to Business Matchmaking?
Business-to-business matchmaking is a business model that identifies target groups that might benefit from each other and brings them together. Using this model, businesses such as Lendio have been created to offer this model as a service. In the case of Lendio, they determined the two target audiences being business owners in need of funding and banking systems that can provide loans and other financial opportunities to business owners. This makes Lendio a loan marketplace, not a lender.
Since Lendio is a business funding matchmaker service it doesn’t have any eligibility requirements of its own, instead, it takes the data of applicants and matches them with lenders based on the lenders’ eligibility requirements.
Lendio is open to all types of businesses, so whatever your eligibility, you can sign up for the Lendio service and see who you are matched with.
However, having good business financials and creditworthiness will match you with better lenders and better rates. Lendio recommends the following as a minimum criterion for getting a good deal.
- Time In Business: 6 months
- Credit Score: 550 (slightly below average)
- Revenue: $10,000 per month
Some of the services that borrowers can get access to through Lendio include:
Eligible borrowers can gain access to installment loans offered by the lenders. With an installment loan, the loan amount is transferred to the borrower, then the borrower pays the loan back in installments. Repayments are generally made monthly.
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Lendio works with business owners of all types, including those who need help kickstarting their business. Through Lendio, you can also match with lenders who can offer financing for startups through startup loans.
The time for this type of loan to be funded takes longer, on average between two and four weeks, with terms that can last up to 25 years. This may sound daunting and tedious, but in startups, it’s crucial to be patient and Lendio offers you quick access to those who are most willing to work with you.
The average amount you will receive through a startup loan is between $500 and $750,000, with rates that vary between zero percent and 17%. Requirements for a startup loan include having a credit score of 680 or higher, with at least six months of proof of your business being in operation.
Borrowers can also access short-term loans. Short-term loans are usually more expensive than installment loans and do not carry interest, instead, they have a flat fee added on, depending on the loan. Through a short-term loan, you can receive between $2,500 and $500,000 in as fast as 24 hours, with rates as low as 8%. The average short-term loan term is between one and three years, and the loan does not need to be restricted to any one use; this is a flexible financing option for businesses.
For instance, if the fee rate is 1.5x and you borrow $10,000, then the total cost to you will be $15,000. Payments on short-term loans are usually made on a weekly basis and most lenders will directly deduct the payments from the borrower’s business account.
Lines of Credit
Borrowers can also get access to lines of credit. Lines of credit are suitable for businesses that require working capital from time to time.
With lines of credit, the amount is not paid to the borrowers in a lump sum, instead, an amount is approved and allocated to the borrower to be used when needed.
Interest doesn’t accrue on the line of credit if it isn’t used. Lines of credit are usually revolving lines which means they are replenished when they are paid back.
As apparent from their name, equipment loans are given to businesses so they can buy specific equipment. The equipment serves as collateral for the lender, which turns equipment loans into secured loans. Secured loans usually carry lower rates than unsecured loans.
In order to qualify for equipment loans, you will want to have proof of business operations for the last 12 months, annual revenue of at least $50,000, and a credit score of at least 650.
Through an equipment loan, you can be funded between $5,000 and $5,000,000 typically within 24 hours. The loan term for equipment loans ranges between one and five years, with rates starting at 7.5%. A few examples of what would qualify for purchase through this loan includes:
- Forklifts, delivery vehicles, trailers
- Company cars and food trucks
- Solar panels
- HVAC units
- Processing software and hardware
- Office furniture
- Commercial kitchen equipment
Certain lenders that are approved by the Small Business Administration (SBA) can receive loans on easy terms that are backed by the SBA. SBA loans are granted to eligible borrowers. The downside to SBA loans is the long application waiting list and extensive paperwork requirements.
The loan amount can be up to $5,000,000, and the loan term can be set between 10 and 30 years. There are different types of SBA loans:
- SBA 7(a): The most flexible type of SBA loan available, as it can be used for a variety of reasons, including the purchase of land, construction costs, refinancing existing debt, the purchase or expansion of a business, and the purchase of supplies and materials for a business.
- SBA 504: This type of SBA loan is used to fund projects, so in order to qualify, a detailed plan of the project’s financial costs will play a role in your qualification. The loan must be used to finance fixed assets, and you will be responsible for 10% immediately; your business must have a net worth of $15 million, with an average of $5 million in net income. Qualifying projects for this loan include buying or building new facilities, buying or making land and land improvements, and refinancing debt affiliated with renovations.
- SBA Express: This loan is the fastest of the trio, with applications that are reviewed within 36 hours. However, it can still take up to 30 days for the money to be funded, but you can finance up to $350,000 through this loan option.
This doesn’t look like a particularly bad downside if you consider the advantage of receiving loans on easy terms and below-market rates. The SBA also has a paycheck protection program that is currently available to help businesses during the COVID-19 pandemic.
Lendio Application Process
Lendio’s application is simple taking borrowers 15 minutes to complete. Applicants simply need to establish an account on Lendio and then go through an application process.
During the application process, borrowers must submit specific details about themselves such as personal identification, bank statements, the business’ registered office, and other documentation.
Lendio will use this information to match the applicant with lenders whose eligibility criteria the applicant meets.
Lendio may take up to 72 hours to match an applicant with lenders and once this is done, a Lendio representative will contact the applicant to explain the options, helping the applicant choose the best matching offer.
According to Lendio, over 65% of applicants find lenders and receive financing using Lendio’s matchmaking service. After the applicant chooses the lender they want to work with, Lendio will finalize the application, and once completed, the funds will be made available to the borrower.
Lendio Customer Service
Customer service reviews for Lendio have been exceedingly favorable stating the service is helpful, friendly, and protective of Lendio users.
You can contact Lendio by:
- Social media
The information on the Lendio website is transparent and does not promise what it cannot deliver. There are no rates published on the site as Lendio itself does not charge any rates or fees to use the platform. Lenders are responsible for setting any rates and fees for each borrower.
Some Lendio alternatives are:
- US Business Funding: There is no currently stated requirement for credit scores or annual revenue, but to qualify you must have been in operation for at least six months. This option offers equipment financing, working capital loans, and SBA loans.
- StreetShares: Loan amounts through StreetShares vary between $2,000 and $250,000, with APR varying between 8% and 39.9%. You must have a credit score of 540 or higher, have been in business for at least one year, and have earned at least $75,000 annually.
- Accion: Accion offers installment loans, specializing in specific business groups, including veteran, women, startups, minority-owned, and green businesses. To quality, you must have been in operation for at least 12 months and have earned at least $50,000 annually. Low credit scores are accepted, and you must own at least 20% of the business.
- Biz2Credit: This marketplace scores 9.7 out of 10 in customer satisfaction on Trustpilot. Biz2Credit has APR rates that are lower than Lendio, ranging from 4% to 36%, and loan amounts ranging from $25,000 to $6,000,000. The minimum credit score you need to qualify is 500.
- National Business Capital: To qualify with this provider, you need to have been in business for at least six months, and make an average revenue of $180,000 a year. The minimum credit score you need is 300. National Business Capital offers qualifying borrowers loan amounts between $10,000 to $5,000,000.
Lendio Reviews & Complaints
User reviews on sites like the Better Business Bureau generally praise the site for its convenience and ease of service, however, some of the most common complaints about Lendio are financing delays and long waiting times, and some users have also complained of being left without any contact at all, even after they have supplied information. This may have something to do with the increasing demand for lending service matchmaking.
Another common complaint is that users feel Lendio asks for a lot of documentation before they receive any information about the lenders. These are the problems that Lendio will have to review, and that potential users and borrowers should keep in mind going forward with using Lendio’s service.
Lendio Pros and Cons
- Fast and convenient Service: Using Lendio does cut down significantly on the time it normally takes to research every available lender and submit applications to see if you qualify. Lendio helps you avoid the rejection process and the frustration of starting the process over again.
- A Lot of Lenders to Choose From: With the number of lenders that Lendio works with, again, it can save you a lot of time compared to preparing and submitting an individual application for every lender.
- High Borrowing Limits: Lendio provides access to more capital than many of its competitors, allowing businesses to secure up to $5 million in SBA loans, or high amounts of cash tied to receivables.
- No Fees to Use The Site: Lendio is completely free to use by potential borrowers, which saves not only time but money as well.
- Won’t Affect Your Credit Score: Choosing to use Lendio to find the right lender for you doesn’t impact your credit score, but some users have said that some lenders made hard pulls on their credit without their knowledge once they received their information.
- Long Waiting Time: The time it has been said it takes for Lendio to get back in touch with you, it is possible that searching for the right lender on your own could have been faster.
- A Lot of Documentation is Needed: After filling in the application and providing plenty of details about yourself and the business you run, this information is then provided to every lender Lendio works through, which doesn’t guarantee your privacy once the information is in the lender’s hands.
Lendio Review: Final Thoughts
Lendio is an ideal solution for businesses wanting to find a variety of suitable lending options. Lendio can help businesses narrow down their choices by matching them with lenders they are eligible to receive loans from. The best thing about Lendio is that it is completely free to use and can be used regardless of what type of business owner you are. The Lendio matchmaking service saves you time and money by taking all the work out of sorting through the many lenders and financing options available.
Overall, Lendio is one of the best options for business owners who do not have the time to search for the perfect lender and instead needs to find the lender quickly, to get financed quickly. Marketplaces like Lendio make finding the right lender easier and can help business owners expand their list of potential lenders.
Enjoy our Lendio review?