Overview
Lendio is a free online service that helps business owners to get loans to support their professional goals. The company was founded in 2011 as a way to offer small business owners a quicker way to get funded. With a network of over 75 lenders offering multiple loan products, Lendio’s online search tool provides offers from a wide variety of lenders and matches them with what a small business owner is seeking.
Lendio’s marketplace is what sets the company apart from other small business lenders. The marketplace brings all options together in one place to address every business need including lines of credit, short-term specialty financing, long-term, low-interest traditional loans and merchant cash advances. Lendio can support your business activity and growth, whether you need to pay for equipment or commercial real estate, fund a business acquisition or pursue other business goals.
Lendio’s technology makes small business lending simple and decreases the amount of time and effort it takes to secure funding. Lendio claims on their website that while banks turn down 80% of their applicants, they find funding for more than 65% of the small business that apply with them. Lendio does not originate business loans. Rather, this service operates more like a “business funding matchmaker”. You tell Lendio who you are and what your needs are and they will provide you with the best solution.
One thing that really struck me during the course of this Lendio review is how deeply the company wants every small business to succeed. I was very impressed that for every loan facilitated on Lendio’s marketplace platform, Lendio contributes a percentage of funds to low-income entrepreneurs around the world through Kiva.org.
- 10 different loan types
- Relaxed credit score requirements
- 1-7 day time to funding
- Complicated terms and fees
- Some loans require extra documentation
- Prepayment penalties
Services Offered & Types of Funding
| Types of Loans | Loan Amount | Loan Term | Time to Funds | Interest Rate |
|---|---|---|---|---|
| Business Line of Credit | $1,000 – $500,000 | 1-2 Year Maturity | 1-2 Weeks | 8-24% |
| SBA Loan | $50,000-5,000,000 | 10-25 Years | 30-90 Days | Prime+ |
| Short Term Loan | $2,500-500,000 | 1-3 Years | As Soon as 24 Hours | As Low as 8% |
| Business Term Loan | $5,000-2,000,000 | 1-5 Years | As Soon as 24 Hours | As Low as 6% |
| Merchant Cash Advance | $5,000-200,000 | Up to 2 Years | As Soon as 24 Hours | As Low as 18% |
| Business Credit Card | $1,000 – 500,000 | 1 – 2 Year Maturity | 1 – 2 Weeks | 8 – 24% |
| Equipment Financing | $5,000-5,000,000 | 1-5 Years | As Soon As 24 Hours | As Low as 7.5% |
| Commercial Mortgage | $250,000-$5,000,000 | 20-25 Year | As Soon as 45 Days | 4.25-6% |
| Accounts Receivable Financing | Up to 80% of Receivables | Up to 1 Year | As Soon as 24 Hours | As Low as 5% |
| Startup Loan | $500-$750,000 | Up to 25 Years | 2-4 Weeks | 0-17% |
| Business Acquisition Loan | $5,000-5,000,000 | Revolving or 10-25 Years | As Soon As 30 Days | As Low As 5.5% |
Business Line of Credit
A business line of credit is one of the most flexible forms of financing. You can use it for just about any small business need: buying equipment, hiring staff, increasing inventory, adding a second location, paying invoices, installing a cappuccino machine, and more.
If you are interested in business line of credit offered by Lendio’s lenders, you’ll typically need to be in business at least 6 months and have $50,000 or more in annual revenue. You’ll also need a credit score of 560 or higher. The interest rate offered by Lendio’s lenders may be as low as 6%. If for example In this sense, Lendio’s interest rates are definitely competitive.
SBA Loan
For many small business owners, an SBA loan can be the perfect loan to cover just about every need of your small business. These loans are partly guaranteed by the U.S. Small Business Administration. Because lenders have much less risk in the case of a default, they’re more likely to provide funds to entrepreneurs like you.
SBA loans are known for being more paperwork intensive, with a much longer time to funds and a higher percentage of rejection than direct online lenders.
Lendio offers helps small businesses get one of three SBA loan offerings. You can opt for a standard SBA 7(a) Loan ($25,000 to $350,000) to buy land/cover construction costs/buy or extend existing business/buy machinery or refinance your existing debt, with a term length of up to 10 years. Lendio can also help you get an SBA 504 Loan to finance fixed assets such as land, building and even long-term machinery. If you need immediate cash, Lendio can help you with an SBA Express Loan if you meet the necessary requirements.
Positive customer reviews often mention the helpful customer support IOU Financial provides. The company’s representatives are said to be competent, friendly, and easily reached. Many reviewers also point out the seamless application process which, many borrowers say is more transparent than with other comparable small business loan providers.
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Lendio’s experts know that no matter how much planning you do, small business ownership is full of surprises and this why Lendio ‘s marketplace include lenders who can provide financing in as little as 24 hours. You can use it to cover unexpected costs, survive a slump, finance a short-term project, or even capitalize on a new business opportunity. If you have solid credit and you’ve been in business for two years or more, you have a good chance of qualifying for a short-term loan.
Business Term Loan
A business term loan is the most stable, flexible way to get more working capital to grow your business. Business term loans are set up to meet almost any unique business need. You can leverage your loan for everything from capital improvements to financing new equipment to hiring more staff.
Lendio’s experts understand your need to determine how much finance you can afford and will match you with a loan that bares a fixed interest rate or fixed flat fee, which means your payments will stay the same over the lifetime of your 1-5 year term.
Merchant Cash Advance
When you need cash quickly, this type of financing enables you to borrow against future earnings and get the cash you need when you need it. One of the best things we found during our Lendio review is that you can often get a merchant cash advance funded in just 24 hours. In most cases, you won’t need to submit a mountain of financial documents, your lender will simply want to review your past 4-6 months of bank statements or receivables.
Business Credit Card
If you don’t qualify for a small business loan or you’re just not ready for one, a business credit card from a Lendio lender may be the way to go. A credit card enables you to increase your working capital and get fast access to cash when you need it. You’ll typically need a credit score of 680 or higher to qualify for a business credit card.
Equipment Financing
There are small business equipment financing options for nearly every industry. Big or small, basic or complicated – whatever you need, Lendio can help you cover the costs. To get equipment financing, you’ll typically need to be in business at least 12 months, have $50,000 or more in annual revenue, and have a credit score of 650 or higher.
When you apply for an equipment financing loan on Lendio’s platform, you can expect an interest rate as low as 7.50%. As an example: if you borrow $30,000, your monthly payment will be $380 with an interest rate of 9.00% and an overall APR of 10.34% for a loan term period of 10 years.
Commercial Mortgage
A commercial mortgage can help you buy, build, expand or remodel your business. You can also use Lendio’s commercial mortgage offering to refinance your existing mortgage. Because a commercial mortgage is an asset-based loan, the loan amount and rate of your commercial mortgage will usually be based on your credit and the value of the property you’re using as collateral.
Accounts Receivable Financing
If you own a business, you probably know what it’s like to have people owe you money. That’s where accounts receivable financing (also sometimes referring to as invoice factoring) comes in. You can gain quick access to cash by selling your purchase orders or receivables, so you can get back to business as usual. For this type of funding, your credit rating isn’t very relevant. The factoring company will be more focused on the credit of the company that owes you money, as it’s the crucial factor that determines how likely the factoring company is to get paid.
Startup Loan
If you’re just starting out, getting access to the capital you need will enable you to hire staff, lease office space, increase inventory, buy equipment, or simply cover monthly expenses while you’re growing. To qualify for a startup loan with one of Lendio’s lenders, you typically need to be in business for at least 6 months and have a credit score of 680 or higher.
Business Acquisition Loan
Buying an existing business or franchise should help you accelerate your business growth, but you may need funding to make this possible. A business acquisition loan is the loan that will help you buy an existing business or franchise. Be prepared to show records of the business’s financial performance and valuation, as well as a business plan and financial projections. When you apply for business acquisition loan on Lendio’s platform, you can get an interest rate as low as 5.5% – which means you’ll save a bundle of cash over the lifetime of your loan.
*ForwardLine has a maximum amount of $150,000 that they are able to loan to borrowers who meet their criteria. For amounts greater than $150,000 (and up to $2,000,000), the approved loan will be funded by a third-party lender which will be disclosed in the ForwardLine loan agreement.
Though ForwardLine can provide loans in all 50 states, certain states have their own requirements which may limit the term of your loan. When you apply, a ForwardLine consultant will discuss your options with you.
Rates and Fees
Lendio receives commission from their lenders and doesn’t charge the borrowers directly. Still, there are fees associated with all loans, and Lendio is no different. The terms and rates for Lendio small business loans vary depending on the type of loan and the applicant’s company circumstances.
Borrower Qualifications
Any business owner can apply for funding with Lendio. For most small business loans, your lender will look at factors like your credit history, time in business, and revenue to determine whether you qualify.
Because Lendio works with over 75 different lenders, the specific documentation required to get a business loan may vary.
Basic requirements to get a business loan through Lendio include:
- Gross revenue averaging at least $10,000 for a minimum of 6 months
- Minimum of 6 months in business (less for certain loan programs), but generally at least 2 years in order to qualify for the best loans and pricing
- No minimum credit score (for certain loans)
- No bankruptcies in the past three years
- A business bank account
- You must be current on your mortgage or rent payment
- The business must be U.S. based
Even after you fill out the application form and submit the necessary documents, you are not guaranteed funding; according to Lendio, only six out of 10 businesses are approved for a business loan through their service. If you want to boost your chances of qualifying, there are a few steps you can take. Start by keeping tabs on your personal and business credit and take meaningful steps to build both. Small things like paying your bills on time and correcting errors on your credit reports really do help. It’s also smart to create a compelling business plan, have the required financial documents organized and on hand, and to identify any possible collateral that could help you secure the loan.
Lendio states on their website that that certain business types are considered “restricted industries” that may have difficulty getting a loan through the platform. Those businesses activities include auto dealers, gambling, hunting, fishing & forestry, legal services, non-profits, mining, commercial real estate and insurance businesses. If your business is one of these industries, it doesn’t mean that you shouldn’t apply, but you should know that you may not be approved simply because of your business focus.
Application Process
While the average bank loan application takes many hours to complete , Lendio’s small business loan applications take only 15 minutes to complete. You’ll need business account bank statements for the past few months. Other basic information needed for the application includes your approximate credit score, the amount of sales your company does on a monthly basis, the industry your business is in, company debt, and the reason for the loan. None of that information requires any documentation if you know your company well.
Lendio will shop your information around to get offers from lenders you may be eligible for. This process should take no longer than 72 hours.
Once your information has been processed, you’ll be paired with one of Lendio’s personal funding managers and will have a general idea of the kinds of loans and rates you qualify for. You can compare offers and choose the one best suited for your business and specific preferences. When you’ve made your decision you will be able to continue the funding process with your chosen lender.
Help & Support
Lendio operates a multi-channel contact center and its customer support is available by phone and email and can be also reached via Facebook, Twitter, Instagram, and LinkedIn.
Lendio will help you through the whole loan process. When you apply through Lendio, a personal funding manager is assigned to you and will ask about your needs, walk you through different loan options, and help you choose the perfect small business loan.
You won’t have to deal with brokers, banks, or confusing financial jargon. This part of the process is extremely helpful and will make you feel comfortable that you’re choosing the right thing for your company.
Lendio also has a comprehensive FAQ page that will answer most of your questions about its loan process. Lastly, the company has a blog that provides real world examples of how Lendio loans have benefited small businesses.
User Reviews
We reviewed hundreds of Lendio reviews on the website Trustpilot, which Lendio links to its homepage. There are, in fact, over 1,400 customer Lendio reviews there, with 88% of them giving Lendio an “excellent” 5-star rating. Of the 5-star reviews, the claim was primarily due to super easy credit application process and that working with Lendio advisors made the process easy and comfortable. We further analyzed the 27 (out of 1,400) bad (one star) Lendio reviews and it seems that the main concern is the fact that Lendio is in fact a gateway – they are not lenders and that Lendio makes its money by inflating the costs of the loans because consumers went through their gateway to their network of lenders implying that if you do the search by yourself, you might reduce the overall cost of the loan.
We also looked at the Lendio reviews that were posted at BBB (with total of 26 reviews at the time of this Lendio review). The BBB gives Lendio an A+ ranking, a very positive sign for anyone looking to apply for a loan with Lendio.
Final Thoughts
In the past when business owners wanted to get capital to fund their business, the owner would have to go to the bank and fill out long, confusing applications. The request would then be sent for review, underwriting and through other processes, and it could take over a month to get a reply. Business owners that wanted to apply with multiple banks would have to repeat the long, time-consuming process over and over before finding the right loan terms.
Lendio was built with the goal of streamlining the process and making the application process quick and easy. Lendio’s dynamic application gathers all the information needed and submits it to any of 75 different lenders. Every question a business owner answers narrows down the options in order to find the perfect fit. In doing so, Lendio cuts the application process in half.
Lendio has facilitated $1 billion in business financing and has helped more than 51,000 small businesses get loans.
If it’s your first time looking for alternative funding and you’re confused about where to start your search or don’t have the time to fill out multiple applications, Lendio may be an excellent resource for your business.
