Access to Growth Capital Expands for Small Businesses in Western New York
July 12, 2018Rochester, New York – July 12, 2018 – Lendio, the nation’s leading marketplace for small business loans, today announced an expansion of the Lendio franchise in Rochester, New York. Lendio Rochester will provide financing solutions to businesses from Syracuse to Buffalo and Niagara Falls to the Canadian border. Lendio franchise owner RJ Muto hopes to ease the financial hurdles for local business owners by helping them apply for loans, review their options and secure funding through Lendio’s network of over 75 lenders.
An online service that helps business owners find the working capital they need to grow their businesses, Lendio’s funding options include SBA loans, startup loans, equipment loans, commercial real estate loans and more. Through franchisees that understand the needs of local business owners, the Lendio franchise program reduces the legwork of looking for a small business loan while bridging the gap between online lenders and the small business community.
Since 2008, accessing financial capital has been difficult for small business owners in upstate New York. In addition to feeling the burden of high taxes in the state, business owners view themselves as outvoted and misrepresented in state government by the massive population of New York City, according to Muto. While residents migrated away from Rochester and Buffalo in record numbers as jobs became scarce, the area is mounting a steady comeback, says Muto, and he hopes to play a role in its rebirth.
“We take a consultant approach to each business we fund,” said Muto. “The goal is to figure out how we can help the business owner thrive and grow. We’ve seen a fantastic response in Rochester. There is a lot of opportunity for small business in this area, and I’m excited to be a part of it.”
“RJ and Lendio did a great job for me and my business. He assessed our needs and found several good matches for us—having multiple options speaks volumes,” said Eric Schladebeck, owner of Spencerport Family Apothecary in Spencerport, New York. “We had our funds in such an expedited time frame that I felt as though I was his top priority.”
Between 2015 and 2017, online lenders, including Lendio, funded over $758 million to 11,490 small businesses in the state of New York. These online loans directly generated $1.8 billion in sales for small businesses in New York State and created 20,154 jobs and $795 million in wages. Nearly one-third of these loans went to small businesses in lower-income communities (those below the national median income).
For more information on how to join the Lendio franchise program, visit: https://www.lendio.com/franchise.
About Lendio
Lendio is a free online service that helps business owners find the right small business loans within minutes. With a network of over 75 lenders offering multiple loan products, Lendio’s marketplace is the center of small business lending. Bringing all options together in one place, from short-term specialty financing to long-term, low-interest traditional loans, our technology makes small business lending simple and decreases the amount of time and effort it takes to secure funding. For every loan facilitated on Lendio’s marketplace platform, Lendio Gives, an employee contribution and employer matching program, donates a percentage of funds to low-income entrepreneurs around the world through Kiva.org. More information about Lendio is available at www.lendio.com. Information about Lendio franchising opportunities can be found at www.lendiofranchise.com.
Contact:
Melanie King
Lendio
801.748.4782
melanie.king@lendio.com
Lendistry Becomes a Member of the Federal Home Loan Bank of San Francisco
July 11, 2018
Lendistry announced yesterday that it has been approved for membership by the Federal Home Loan Bank of San Francisco. This will allow the lender to expand its commercial real estate loan business, which Lendistry launched in January.
“It’s an honor to be a member of the Federal Home Loan Bank of San Francisco, an organization committed to community development by expanding availability of credit,” said Lendistry CEO Everett K. Sands. “We look forward to leveraging our unique business model of being a hybrid of a community bank and a fintech company to expand access to capital to all.”
Lendistry offers SBA loans (up to $250,000), traditional small business, or term, loans (up to $1 million), bridge and short-term loans (up to $500,000), and most recently, commercial real estate loans (up to $2 million). Sands told AltFinanceDaily that about 65 percent of its business is derived from SBA loans, about 30 percent comes from term loans, and the remainder is a mix from the other loan types. Of the term loans, Sands said that the average is a four year loan with a 12 percent interest rate.
About 70 percent of Lendistry’s business comes from a combination of bank referrals and commercial loan brokers, or ISOs. Otherwise, Lendistry obtains customers from affiliate partners, like Lending Tree, and from its own direct efforts. Out of a 22 person team, Lendistry employs eight salespeople. And Sands said that about 70 percent of the team has a banking background.
Lendistry customers come from a variety of industries including healthcare, restaurants and home improvement. Sands said that the bulk of its business comes from merchants in the medical and manufacturing industries because these are the types of companies that their bank partners have been sending them lately. The lender also makes a fair amount of loans to restaurants, Sands said.
Lendistry has a partnership with The Center, a nonprofit that provides small business owners with educational resources, such as workshops, training videos, coaching sessions, and networking opportunities. Founded in 2015, Lendistry is based in Brea, California, outside of Los Angeles.
What Will Happen to HomeZen After the Breakout Capital Deal?
July 3, 2018
With today’s announcement of Breakout Capital Finance’s acquisition of HomeZen’s technology, AltFinanceDaily wondered what will happen to HomeZen after the acquisition of its technology.
HomeZen’s co-founder and Head of Technology Mike Spainhower will work with Breakout Capital to help integrate the HomeZen technology into Breakout Capital’s system, Breakout Capital Chief Operating Officer Mendelsohn told AltFinanceDaily. But Spainhower will not be joining Breakout Capital as an employee, nor will any other former HomeZen employees. HomeZen will still service its existing clients, but will no longer seek additional clients or operate under the HomeZen name. HomeZen, which provided software tools for home sellers to more efficiently sell their homes, was founded in 2016 in the Washington D.C. area.
Mendelsohn said that prior to this acquisition, BreakOut Capital founder and CEO Carl Fairbank and HomeZen co-founder and CEO Kevin Bennett knew each other as part of the Washington D.C.-area tech community.
The HomeZen website is currently down, which is not an error. Mendelsohn said that the transaction between the two companies meant that HomeZen would cease offering its technology, and website, to new customers.
While Mendelsohn acknowledged the real estate technology company Zillow as a potential competitor of HomeZen, he said that HomeZen’s offering was quite uncommon.
“They were pretty unique in offering sellers a suite of [real estate] tools to do it themselves really be empowered to direct the sales process yourself.”
Breakout Capital has grown its loan originations throughout the year and also obtained a $15 million facility at the end of May that has allowed it to build out a factoring product, called FactorAdvantage.
Of the acquisition, Mendelsohn said:
“You have to take the long view with this and say ‘They’re serving real estate sellers, we’re serving small business owners.’ This may seem a little discontinuous, but what they’re doing is the same thing we’re doing. They’re providing great tools, calculators and other ways to evaluate offers. And that’s exactly what we do. This will allow us to give our applicants and borrowers access to that high quality experience.”
Founded in 2015 by CEO Carl Fairbank, Breakout Capital is based in McLean, Virginia.
Breakout Capital Finance Acquires HomeZen, Inc. Technology
July 3, 2018McLean, Va. (July 3, 2018) – Breakout Capital Finance (“Breakout Capital”), a leading technology innovator and small business lending company, announced today that it has acquired HomeZen’s technology. HomeZen is a real estate technology company providing powerful software tools for home sellers using technology to more efficiently and effectively sell their homes.
HomeZen’s innovative core technology enables users to source and evaluate offers in order to achieve the best possible outcome. This technology, which includes calculators and other user tools, will be used by Breakout Capital to empower small businesses searching for working capital solutions. The company plans to unveil a new website incorporating these features later this year.
“Since its inception, Breakout Capital has prioritized being a customer-focused disruptor, seeking out ways to better serve our customers,” said Carl Fairbank, Founder and Chief Executive Officer of Breakout Capital. “HomeZen’s technology is incredibly innovative, and it will not only help us improve the way small businesses search and evaluate their options to access working capital, but will also help to empower entrepreneurs to do more with their already limited time.”
“At HomeZen we use technology to empower home sellers with the information and tools they need to easily and cheaply sell their homes,” added Kevin Bennett, Co-Founder and Chief Executive Officer of HomeZen. “I’m excited that Breakout Capital will be able to use our technology to simplify what can be a stressful, complicated process for small business owners.”
This is another milestone in the fast growth of Breakout Capital. Throughout 2018, Breakout Capital has rapidly grown loan originations, repeatedly breaking records for new funding volume. In parallel, it has continued to innovate its technology platforms, with notable advances in machine learning, artificial intelligence, and the use of blockchain to support lending operations.
Breakout Capital also recently closed on a substantial new credit facility with Medalist Partners and expanded its headquarters in McLean, Virginia.
About Breakout Capital Finance
Breakout Capital Finance is a leading financial technology company that uses best-in-class technology to provide a wide range of credit solutions to small businesses across the country. Built on the three pillars of transparency, education and advocacy for small business, the company is one of the fastest-growing direct lenders in the space and leads a world-class technology innovation effort. Breakout Capital Finance is a Principal Member of the Innovative Lending Platform Association and is an original advocate for the SmartBoxTM standard for transparency and cost disclosure.
To learn more about Breakout Capital Finance, please visit www.breakoutfinance.com.
An ISO Brokers Main Street Deals – on Main Street
June 25, 2018
Envision a giant office filled with rows of commercial finance brokers on the phone, aggressively selling deals to faceless small town merchants. Then step into the office of Horizon Financial Group and meet brothers and business partners James and John Celifarco. The contrast could not be more striking.
The most dramatic difference between their office and that of almost every other broker, or ISO, is that you enter the office from the sidewalk. There’s no lobby and no elevator. It’s just the two brothers (plus one salesperson and one assistant) working on the other side of a glass storefront window.
The store isn’t on Madison Avenue or Rodeo Drive. It’s on a modest, roughly three-block commercial strip on Avenue S in a working class section of Brooklyn called Marine Park. There’s a deli, a pizzeria, a barbershop, a pet grooming store and a bunch of other stores that you’re likely to find on Main Street, U.S.A. In other words, Horizon Financial Group’s neighbors are the exact kind of small business owners they seek as customers. And since they opened up shop on this quaint stretch at the end of October, many of their store owner neighbors have already become customers.
“It’s a different relationship with the customer,” James said of their neighborhood clients. “You’re not on the phone. You’re face to face with these people. You’re meeting them, you’re shaking their hands, you’re getting to know them personally, which helps with the longevity of the relationship itself.”
Sitting at the glass conference table by their storefront window, James, 34, and John, 37, counted up to six clients by simply pointing out the window at other small stores across the street. Horizon Financial Group is an ISO that brokers working capital deals and does credit card processing, equipment leasing, ATM machines and commercial mortgages. (James has his New York real estate license, so he can also help local store owners buy or sell a house.) The brothers said that about 40 percent of their business is facilitating deals brought to them by other ISOs, another 40 percent comes from merchants that they find directly, and about 20 percent comes from these local customers they’ve developed from having a physical presence in the neighborhood.
“Obviously you can’t build an entire business on just these two streets,” John said, “but it’s extra business that we wouldn’t have had if we weren’t here. And when we came here, we stopped thinking ‘Who are we going to buy leads from?’ and started thinking more outside of the box.”
An example of this was their decision to approach the Brooklyn Chamber of Commerce where they are now one of the chamber’s preferred vendors, which brings them business from the entire borough.
James said they’ve made contributions to the local little league and kids football, and whenever a new store opens in the area, they introduce themselves and explain what they do. It also doesn’t hurt that they grew up in Marine Park, so they already know the town pretty well. James recognized someone on the sidewalk and ran outside to say hi. It was someone who used to be a next door neighbor. There is a truly old-fashion sense of community on Avenue S.
“I buy my pizza from [the pizza store owner] and he does his credit card processing with us,” James said. “When the dry cleaner needed equipment, we got them capital, and I actually got to see the piece of equipment I helped finance. That almost never happens.”
Because there is no building guard or front desk person, customers can stop by whenever they like. As if in a sitcom, a man walked into the store saying to the brothers, “Don’t be mad at me.” It was a customer, the owner of a local paint store. “It’s not completely my fault, but I broke the phone swiper on the job.”
Reassuringly, John told him to come to his desk and he helped the customer with a replacement for a piece of credit card processing equipment.
The brothers have each been working in the small business financing industry independently for more than a decade. James established Horizon Financial Group by himself in 2009 while John was working for a different company in the credit card processing and MCA space. John joined James at Horizon Financial Group in September 2017.
John said he prefers co-leading Horizon Financial Group, itself a small business, to running a larger operation in Manhattan.
“Compared to somebody in the city with a huge rent and a huge payroll, I don’t need to do the same numbers he’s doing to end up making the same amount of money.”
John also noted that he doesn’t have to sit on a train for an hour and a half because he lives just six blocks away from the storefront office.
“A lot of people don’t like to say they’re a small company,” John said. “I couldn’t be happier that we’re a small company.”
Running a small business is familiar to the Celifarcos. Horizon Financial Group gets its name from Horizons Dance Center, a successful Brooklyn dance school founded by James and John’s mother. It has been in business for 46 years and is still going strong.
“The name is good luck,” James said.
James lives a short drive away in Rockaway with his wife and daughter. On running a small business like Horizon Financial Group, James said: “It’s also about quality of life. You don’t need to work 7 to 7. I can be on the beach with my daughter. It’s really a different approach.”
World Business Lenders Secures Credit Facility
May 16, 2018
World Business Lenders announced yesterday that it obtained a $30 million credit facility from a Cayman Islands fund created by a group of Asian banks and investors.
“The terms [of the facility] are very attractive,” said World Business Lenders CFO Tom Wills. “Single digit fixed interest rate and high advance rates.”
The new facility will be used to continue funding a loan product that is a hybrid of a business loan and a mortgage, Wills told AltFinanceDaily. He said that World Business Lenders invented this product three years ago.
“Three years ago, we saw some credit weakness coming into the market and we decided to develop this real estate collateralized product,” Wills said.
World Business Lenders provides business loans that range from $5,000 to $2 million and are paid back between six and 36 months. Their average loan size is $150,000.
Wills said that the hybrid product is becoming more institutionally accepted and that they have been seeing more demand for it. Created in 2011, the company employs over 100 people at its office in Jersey City, NJ.
FinMkt Launches ISO Business
May 10, 2018
FinMkt has launched a broad ISO, working with referral partners from brokers to accountants to small business advisors. With two years of experience facilitating consumer lending, the company has just entered the small business lending market.
“We took the same engine that we used on the consumer side and we rolled it over to the small business side,” said FinMkt’s VP of Business Development who is overseeing this new division, called Bizloans.
The Bizloans brand within FinMkt started at the end of last year, but has been in stealth mode for the last three to six months, Sklar told AltFinanceDaily. So far, Bizloans has facilitated $15 million in loan application requests over the last 60 days. Of this, roughly $5 million has been funded.
The new division can present small businesses with a variety of financing, from merchant cash advance to factoring and lines of credit. In the few months that FinMkt’s Bizloans has been in operation, Sklar said that real estate asset-backed loans, equipment leasing and merchant cash advance has made up the bulk of the funding products facilitated.
For MCA products, $35,000 has been the average request and $150,000 has been the average for equipment leasing. According to Sklar, some of the funding companies that Bizloans has already worked with include OnDeck, Gibraltar, SOS Capital, 6th Avenue Capital and the San Diego-based bank holding company, BofI.
For successfully funded deals, Sklar said that they will get paid a commission and then pay the broker, depending on how involved they were in the deal.
“The commission splits vary depending on the amount of legwork and the amount of sophistication [the broker has] in the industry,” Sklar said.
For deals where the broker did most all of the work and simply used Bizloans as a platform, those brokers will generally get 80% of the commission, Sklar said. If the broker only supplied the lead, then they may only get 40%. Bizloans offers training to brokers less familiar with the industry.
Founded in 2011 by CEO Luan Cox and CTO Sri Goteti, FinMkt initially operated in the crowdfunded securities space. The company of 15 people is headquartered in New York City and has an office in Hyderabad, India.
SBA 504 Loans Decline YoY 2017-2018
May 8, 2018
Funding of SBA 504 loans decreased by 26 percent from January through March 2017 compared to January through March of 2018, according to SBA (Small Business Administration) data. In the first three months of 2017, $1,326,601,000 of SBA 504 loans were funded compared to $987,896,000 of SBA 504 loans in the first three months of 2018. The number of companies that received SBA 504 loans also fell January through March year over year. There were 1,574 companies that took SBA 504 loans from January through March of 2017, compared to 1,290 companies over the same period this year, a decrease of 18 percent.
The SBA 504 loan is a government-backed loan that can only be used for commercial real estate or long-term machinery purchases. It differs from the more common SBA 7(a) loan, which is a general purpose loan that can be used for anything from working capital to business acquisition.
When contacted regarding the decline in the dollar amount volume of loans issued this year compared to last, the SBA submitted the following response from Bill Manger, Associate Administrator for the SBA’s Office of Capital Access:
“After a very strong FY17 of 504 SBA Lending, this year the program has performed on par with longer-term trends. We have also seen banks making more conventional loans without the SBA guarantee due to the strength of the U.S. economy and increased small business optimism brought about by the regulatory reforms and tax cuts championed by the Trump Administration. The SBA continues to work with our Certified Development Companies and Lending Partners to further strengthen the 504 Program and ensure it is helping create and grow U.S. small businesses. In addition to our 10 Year and 20 Year Debentures, last month the SBA implemented a 25 Year Debenture for 504 loans, offering fixed-rate financing for an additional 60 months to our small business owners. We believe this new product will be looked upon favorably by our stakeholders and borrowers by offering a longer term loan that will improve the cash flow of entrepreneurs utilizing the program.”
