Lendio And The American Dream

At Lendio, we say, ‘Fuel the American Dream’ — help business owners in the US get the financing they need.

What do you dream of? Now, before getting too carried away, realize this is a family-friendly site that isn’t going to be polluted by your darkest thoughts and desires — keep those locked deep, throw away the key, and we’ll agree to never acknowledge them again. So, I’ll ask you again. What do you dream of?

There is one dream that many people have shared since the dawn of this country, forged through blood and sweat and tears with the hope that one person, no matter race, sex, or social standing, could aspire to become something more. A belief that one individual could start with nothing, work hard, and come out the other side with everything — simply put, the “American Dream.”

Sadly, through one form or another, many people can’t fully realize this dream. Starting a small business, then doing what’s necessary to see it flourish, can be tough as hell. Many have tried, many have failed, and many more have been stonewalled before their dream could even take flight. Such is life, but things are changing.

For most people, starting a business requires pursuing a loan, the painstaking, elongated process that sends chills down the spine of every potential founder. Maintaining a business is hard, but acquiring the funds to start that business can be just as hard.

Lendio was spun out of the belief that acquiring a small business loan shouldn’t be a roadblock preventing the realization of a dream. They imagined a world where small businesses could be connected seamlessly with lenders, then made it so. This is their story.

First, before we can understand Lendio, we must understand FundingUniverse. Co-founded in 2005 by Brock Blake, FundingUniverse was conceived as an online marketplace connecting entrepreneurs with angel investors. Over the course of five years, Blake helped build this marketplace into a fully-formed business generating substantial revenue and employing roughly 80 people. But the business model wasn’t without faults.

“What we realized, most business owners are not going to be able to raise money from angel investors or venture capitalists, only 1–2% of business owners are going to raise money from venture capitalists,” Blake said. “Most businesses, the main street businesses, don’t need a million dollars to run their business. What they need is a loan or line of credit.”

This realization created two options. Option number one was the status quo — continue running FundingUniverse, ignore other market possibilities, and attempt to build the best business possible within that chosen area. Nothing wrong with this option, but opportunity was also limited.

Option number two was upheaval, plain and simple — scrap FundingUniverse, then create a newer, tightly-focused business concentrating on a much larger consumer base, the ever-growing world of small business loans.

I don’t need to tell you which option was chosen.

“We knew there was a huge demand of business owners needing financing,” Blake said. “We knew that we could acquire customers because we’d done it for a long time….and with all the learning we had from FundingUniverse, we had a good opportunity to pivot and launch Lendio.”

On one hand, the Lendio launch in February of 2011 wasn’t as hard as it could have been, softened by the knowledge and skills developed during the grind of FundingUniverse.

On the other hand, it takes a decent amount of faith and confidence to essentially burn a profitable business to the ground, then remake it based upon a different vision. That part isn’t as easy.

“It was painful,” Blake said. “We had a lot of data around the market, the business model, stuff like that. So that wasn’t painful. But we were running FundingUniverse that at the time was driving just under $10 million in revenue, with 75–80 people. When you rip the bandaid and go from $10 million in revenue to zero overnight, really having to start over and go from 75 employees down to 15, it’s difficult. It was a painful experience but we knew FundingUniverse wasn’t the right business model, it wasn’t going to scale to what we wanted, so we knew it was the right move. It was painful, but I’m so happy we did it.”

You know the early-stage startup story — from pain comes progress, from failure, success. Lendio opened up an enormous avenue that hadn’t been available with FundingUniverse, a pathway into the vast, underserved marketplace of small businesses seeking loans. From an opportunity standpoint, this was like going from sailing a tugboat in your bathtub to braving the Pacific Ocean. While very few businesses will ever raise venture capital money, the overwhelming majority of businesses will pursue a business loan. Lendio was created to concentrate on that market.

“Anything less than $250,000, the bank doesn’t want to spend any time on, yet 70% of business owners need $250,000 or less,” Blake said. “There’s a big disconnect. With Lendio, we’ve provided a platform where we’ve aggregated all of the lenders, the best lenders across the United States, onto one platform. Our goal is to make small business lending simple. You come to us, give us some information, we match your profile and loan application to the best lenders for you. Those lenders underwrite the application, then send to Lendio an offer or a decline. We take those offers, present them to the borrower, here’s the rate, here’s the term, here’s the loan amount, now you choose what is the best fit for you.”

If it sounds easy, that’s the point. A normal business owner doesn’t have time to move from bank-to-bank, filling out applications and praying for money. Lendio is the super-condensed version of this process, taking a 30–45 day ordeal and compressing it into a fraction of that. A small business loan that once took a month to obtain, now takes a day.

“At Lendio, we say, ‘Fuel the American Dream’ — help business owners in the US get the financing they need,” Blake said. “Most of the time, the problem for business owners is access to capital. How do I get capital to grow, expand, hire employees, buy equipment? Because they’re so busy, they don’t have time to become an expert on the different loan options that are out there.”

Lendio is the expert so you don’t have to be, a reasonable stance because who really wants to be an expert on loans? (Apologies to all those with a deep, abiding love for loans that I just offended.) Multiple rounds of financing, including a $20.5 million Series C earlier this year, have been used to bolster this vision, expanding Lendio into an organization of 100+ employees and offices in Utah and New York.

When the decision was made to abandon FundingUniverse and start anew with Lendio, the idea was simple — by pursuing their own American Dream, Lendio could enable others to pursue versions of their own.

So maybe that dream you have dancing on the edge of your periphery, of owning your very own business, fighting and bleeding for it, then watching it grow and blossom, isn’t as far away as you think.

“Being an entrepreneur is very rewarding, but very challenging,” Blake said “There’s so many ups and downs, you have to enjoy the ride. You can’t get too high or too low. But the times when it’s really high, when we have a summer company party and invite all the employees and their spouses and children, I try and take a moment during those times, step back, and look how this business is affecting the lives of our employees and families. To see that grow is very, very rewarding.”

Published 11/19/2015

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