Small business owners may need funding to start, expand, or cover themselves through difficult times. Finding small business loans comes with its challenges. That’s where Lendio tries to help these small business owners and connect them with loans to meet their goals.
Lendio doesn’t offer its own business loans. It has its own small business loan marketplace that works with over 74 lenders to lend money to businesses across the U.S. If you looking for funding options for your small business, read this Lendio review to learn more about how its platform might help.
What is Lendio?
Lendio offers a business loan marketplace that helps small business owners find lenders that match their funding needs. Headquartered in Lehi, Utah, Lendio was founded in 2011.
The company has helped small business owners fund over 12 billion dollars through more than 300,000 loans. Financial products found through Lendio’s network of lenders include a business line of credit, SBA loans, short-term loans, and equipment financing.
Around 80% of small business loan applications are rejected by banks. Lendio’s goal is to create a new reality for these business owners so they can move forward with their ambition of running a successful business.
As a business loan aggregator, Lendio serves as the middle man and allows you to browse financing tools by other lenders. Using the Lendio small business loans platform is free.
Business financing from some lenders may require paying an origination fee. Lendio provides transparency so you can clearly understand the loan details from each lender.
What does Lendio offer Small Business Owners?
You’ll find a variety of different small business loan products on Lendio’s platform. Using its lender network, you can browse various loan options from multiple lenders. Here are the loan types you’ll find on Lendio’s platform below:
Accounts Receivable Financing
If you have cash flow problems because you’re waiting for your Net-30 receivables, using accounts receivable financing can help. AR financing options are based on actual debts owed to your business or tangible assets. Thus, they are typically easier to qualify for.
Your credit score is not relevant for these Lendio business loans. Get up to 90% of your receivables as a loan amount.
Loan terms for accounts receivable financing are for up to a year. Funding can occur as soon as 24 hours. Your interest rate could be as low as 3%.
Business Line of Credit
Business lines are a financing tool that provides access to cash as expenses come up. These loans are very flexible and can be used for a variety of purposes like paying invoices, opening a second location, or hiring staff.
A business line of credit is a revolving form of credit. It works similarly to a credit card. The minimum credit score requirement is 560.
You have a set credit limit that you can borrow against as needed. As you pay down the balance, you free up the credit available to you.
Lenders that offer a business line of credit through Lendio offer loan amounts between $1,000-$500,000. The loan term ranges from 1-2 years.
You can receive funding between 1-2 weeks from your approved application. The interest rate range is between 8-24%.
The U.S. Small Business Administration (SBA) helps small businesses receive funding, particularly during hard economic times. The loans are backed by this federal agency. That provides less risk to lenders who fund these loans.
Using Lendio’s platform, you can find the six types of SBA loans including:
- SBA 7(a) loan
- SBA 504 loan
- SBA Express Loan
Request up to a loan amount of $5,000,000, with loan terms between 10-30 years. After your business loan is approved, you can receive funds in about 1-2 months.
There is no minimum credit score required for these types of loans. However, SBA loans are generally considered harder to get because they require extensive documentation and strict eligibility requirements.
The interest rate on these loans is set based on prime.
Short Term Loan
A short-term loan is a fast and flexible financing option that can help you cover an unexpected expense, use it towards a new business opportunity, or even fund a short-term project.
Qualifying for this type of business loan will typically require a good credit score. The minimum credit score is at least 650.
Your business should also be established for at least two years.
The loan amount varies from $25,000 to $700,000. Your loan term is 3-10 years.
Funding from approval takes 3-7 business days. The interest rate on these short-term loans ranges from 8-36%
Business Term Loan
The business term loan is one of the most simple small business loan solutions out there. Your lender will provide you with an upfront sum of money.
Lenders will review your credit score in addition to the business finances to determine if you qualify.
You’ll repay the money at regular intervals that are set over an amount of time that’s known as the term loan. Term loans are classified into two types of loans: 1) Short-term loans; Repaid over a shorter period of time 2) Term loans; repaid over a longer term that can span years.
The loan amount is between $5,000-$2,000,000. Terms are between 1-5 years. Funding is as soon as 24 hours from approval. The interest rate could be as low as 6%.
Business Cash Advance
Cash advances are a type of funding that allows businesses to gain access to money by borrowing against the money they make in the future. Money borrowed with a cash advance is paid back through a fixed daily percentage.
Newer businesses have an easier time getting funding through this type of financing. A business cash advance may also be a good option if you need money fast and don’t have time to wait for other types of funding.
Lenders typically don’t pull your credit score to consider your business for this type of financing.
Loan amounts range from $5,000 to 1 million dollars. The loan term is for up to 2 years. Funding is received as soon as 24 hours. The interest rate is as low as 18%.
If your business needs funding to buy or lease equipment without touching your working capital, consider equipment financing. This asset-based lending option uses the equipment as collateral to secure funding.
Prospective borrowers are more likely to be approved since the loan is not as heavily based on credit. This financing solution can be used for technology systems, office furniture, vehicles, medical equipment, and much more.
There is no personal guarantee required on these types of loans in most cases.
Loan amounts vary from $5,000-$5,000,000. The loan terms are between 1-5 years. Funding can be as soon as 24 hours. The interest rates are as low as 7.5%.
Commercial Property Mortgage Loans
Sometimes called a business mortgage, these loans are geared toward helping small businesses with building-related costs. This includes building a building or securing a property to use for your business.
The type of commercial property can be anything from a restaurant space, retail location, factory, or office. Commercial mortgage loans can also be used for expanding your business to a new location.
Loan amounts are between $250,000-$5,000,000. The loan terms are longer, between 20-25 years.
A business owner can receive funding in about 45 days. Lendio interest rates are advertised as between 4.25-6%.
Startup Business Loans
Startup loans allow small businesses to invest in their own business to accelerate growth. These loans can be used for a variety of reasons including hiring employees, covering monthly expenses, purchasing equipment, and more.
Your individual credit history and credit score are reviewed with startup business loans. That makes these small business loans more accessible to new businesses.
Loan amounts are between $500-$750,000. You can receive a term for up to 25 years. Funding takes between 2-4 weeks. Interest rates are now between 0-17%.
Business Acquisition Loan
These business loans are used to help businesses purchase other businesses. Business acquisitions loans can be used to outright buy an existing business or purchase a franchise location.
Depending on the type of business loan you’re looking at, the qualifications will vary.
The loan amount is between $5,000-$5,000,000. Loan terms are revolving or 10-25 years.
Funding is as soon as 30 days. The interest rate could be as low as 5.5%.
Business Credit Card
Regardless of your business needs, a business credit card is a financing tool that helps you in many ways. Aside from providing funds, a business credit card allows you to build your business credit history and track expenses.
A business credit card is used for anything related to the business.
Your personal credit score is the main qualifier for a business credit card. As long as you have a score of 680 or higher, there is a good chance you’ll qualify. The time your business has been around being another factor that could help.
How to Qualify for a Business loan on Lendio
Lendio is not a lender. They connect you with its partnered lenders to make loan offers available to local businesses.
Individual lenders have their own set of qualifications to get approved for a loan. Here are some general guidelines to what criteria you will likely need to get approved for a Lendio business loan.
Lendio partners determine what minimum personal credit score is needed to get approved. There isn’t a lot of information about what the credit score requirement is for all the financing options found on Lendio. Here are a few that they do advertise:
- Business line – 560
- Equipment financing – 650
- Startup business loan – 680
To improve your chances of being approved for a Lendio business loan, you should aim to have at least a 670 credit score.
Length of Time in Business
Lendio small business loans have different requirements for the type of financing tool. Generally speaking, you must be in business for at least six months.
Other Lendio business loans such as SBA loans have longer requirements.
To receive financing, your business must earn at least the minimum annual revenue requirements. Business annual revenue requirements are in the range of $50,000 – $250,000.
Applying for a Lendio Loan
The application process at Lendio is fairly straightforward. You’ll create an account first to complete an application.
You’ll be asked for some basic information about yourself, the business, and your finances. Lendio will do a soft credit check to determine which lenders you have the greatest chance of approval. This type of check won’t affect your score.
Lenders who match up will provide loan offers. A representative from Lendio will contact you with the offers you receive.
You can then review each specific lender and determine which best suits your business needs and situation. At this part of the application process, you’ll simply need to choose your offer to move on to funding your loan.
Lendio Pros and Cons
Pro: Application process is streamlined
You won’t have to fill out multiple applications to find the right lender. There is one application that’s required to fill out.
It’s easy to fill out and can reasonably complete in 15 minutes. Funding can happen as fast as 24 hours from accepting an offer.
Pro: Multiple Lenders are part of its network
There are over 300 lenders that are part of Lendio’s platform. This increases the chances of finding the loan option that’s best for your business and a lender. You can rest assured that you’ll find a lender that’s a good match and offers a favorable rate.
Pro: Types of financing options
With its large network of lenders, you have a good chance of finding the right type of loan. Business term loans, business credit cards, equipment financing, short-term loans, and accounts receivable financing are among the types of loans you’ll find on its platform.
Pro: Availability of Loan Calculators
Before taking a loan offer, you should ensure that you’re working with accurate numbers. Depending on the type of business loan, you can find a calculator to help determine if a loan will meet your financial situation.
- Automated Clearing House (ACH) Loan calculator
- Business Term calculator
- Equipment Loan calculator
- Invoice Factoring calculator
- Startup Business Loan calculator
Pro: Live Chat Support
Lendio has live chat support on its website so you can receive a fast, convenient customer experience. Representatives can help borrowers with their questions about the various business loans offered on Lendio’s platform.
Pro: Easy to Qualify
Borrowers who have a hard time qualifying for loans with other lenders can find an option with Lendio. Its lender network is over 300 companies deep. Chances are good that you’ll find at least one specific lender that will work with you.
Pro: Customer Service is well received
According to Lendio reviews on websites such as Trustpilot, borrowers have found great service from its support team. Borrowers note that its customer service is responsive and helpful.
Pro: Reduces a lot of legwork
Working with a lender, it’s often quite the hurdle for borrowers. If you’re applying with multiple lenders, the work only magnifies. Lendio pulls a lot of weight here so you can find a matching lender with reasonable terms.
Con: Options are variable
Lendio has a vast lender network which is one of its strengths. But Lendio can’t make rate guarantees because there are so many lenders.
The interest rates and fees aren’t set in stone since Lendio isn’t a lender. Plus with so many lenders on its platform, some borrowers may feel overwhelmed by the options.
Con: Not a Lender
Lendio specializes in connecting business borrowers with a lender. Lendio doesn’t actually finance loans. That means that the loan details including repayment term, origination fee, interest rate, etc., are set by each lender. Lendio has no control over these loan details.
Con: Consultations are strictly virtual
There are no funding managers that you meet with to talk through your loan options. To talk to a representative, you’ll need to meet through virtual channels. For borrowers who like talking in person with a consultation, Lendio may not work.
Bottom Line: Lendio Review
Lendio’s reviews online are overall very good. They are a reputable, legit company. One thing to keep in mind when using Lendio is that they do provide your contact information to many of its lenders. Therefore you might get multiple calls, emails, and mailings. If you want to save time by getting several lenders at once or you’re not sure which financing option is best for your business, Lendio is a viable solution.