Becca Grider had a problem: Business was, well, too good.
Grider, and her sister-in-law, Lindie Royall, were sitting atop a great idea: a monthly subscription delivery of bows that little girls can wear. Why a subscription? Well, as Royall found out, sometimes kids can lose a bow quickly. Monthly deliveries mean there’s always a backup, or three, around.
Thus was born Little Poppy Co., a mail order business in Draper, Utah. Moms (and dads and other relatives) found the bows a great idea, and orders for the now-2-year-old venture were pouring in.
But how to finance the inventory? “We couldn’t get enough money from the bank” to cover the large purchase order the pair wanted to place, Grider recalled.
An online firm called Lendio, in South Jordan, Utah, came to the rescue. Like each of the firm’s thousands of customers, Grider and Royall went online, completed a form, and were guided by a Lendio staffer toward the business loan they needed. “They came back to us with several options,” Grider said.
The result? “We were able to place the purchase order for more inventory, to be able to continue to grow our business and not to slow things down,” Grider said.
Finding money to grow a small business, especially one that’s taking off, can be a challenge for a new entrepreneur. Beddy’s CEO Betsy Mikesell, for example, told Crain’s Utah last year about a royalty-financed deal that nearly sank her young company, and many other business owners could probably offer similar tales.
Brock Blake, Lendio’s affable CEO, wants to change that. Very much in the mold of consumer-oriented firms such as LendingTree.com, Blake’s company reaches out to the small business owner — whether a hair salon or a direct-mail marketer — and offers guidance in finding the right lender.
It’s been a longtime interest, begun when the 35-year-old Blake was an undergrad at Brigham Young University in Provo.
“When I was at BYU I studied a class called ‘Financing New Ventures.’ It was all about these different ways to build, to finance a business, and I just loved it and I was just fascinated by it. I knew that I had other brothers and family members and friends that were business owners, and their biggest challenge was always, ‘How am I going to get financing to grow this thing?’ So I just knew there was a big opportunity to be able to take that problem and find ways to solve it, make it more efficient,” he said.
Blake explained how Lendio works with its customers: “So what we do is, we say, ‘Well, you don’t have to be an expert. We’ll take care of all that stuff. We will bring together all the different loan options, from working capital loans, lines of credit, SBA loans, equipment loans, accounts receivable financing, and tell you which ones are the best fit for you and help you get approved for those loans.’”
So far, it’s working. Not only did Lendio help Little Poppy Co., but in 2016 it helped fund “between $250 million and $275 million” in loan volume, up from $130 million the year before. That kind of work keeps the 125 employees at Lendio hopping.
Some customers, however, may not initially know it’s Lendio doing the loan arranging: Blake said Staples, the nationwide office supply chain, puts its own branding on the Lendio service.
“Staples is a big partner of ours, so if you go to staples.com and click on business loans, you’ll see Staples business loans. That’s really powered by Lendio,” Blake explained. “So we offer lending to all the Staples customers. So as you can imagine, you go through a partner, a public company like Staples, they put you through quite the vetting process on your brand, your customer experience, your systems, your processes.”
Other partners include GoDaddy.com, and Town Square Media, which Blake said owns 66 radio stations across the country. “LendingTree is [also] a partner,” he added.
How does Lendio monetize all the connecting work? “We get paid by the loan funders, by the lender. So the lender will pay us an origination fee,” Blake said.
Speed helps, Blake added, since most loans are funded “within a few business days.” In some cases, he added, if the borrower has all the paperwork in order, the loan can be funded the same day.
And speaking of funding, last fall Lendio made some news of its own: The firm secured $20 million in funding from Comcast Ventures and Stereo Capital with participation from existing investors Napier Park, Blumberg Capital, Tribeca Venture Partners and North Hill Ventures. Blake said the money would be used to accelerate Lendio’s growth through marketing, sales and brand awareness.
But, I asked, what about firms that seemingly bypass the need for commercial funding? In recent years, SnapPower in Vineyard, Utah, raised over $500,000 on Kickstarter for its products, while Salt Lake City-based Nomatic pulled in a whopping $1.7 million for its all-in-one travel bag.
Will Kickstarter put Lendio in a museum?
“Kickstarter, that type of thing, usually it’s a product that’s a tangible, touch-and-feel product that people will want to buy. And for that scenario, that’s a great place for financing,” Blake said. “But very few business in the mainstream of America really have that hot of a product that’s going to, you know, get on Kickstarter and really fly. I mean, we’re talking, like I said, all the service-based businesses aren’t going to go well on Kickstarter: gas stations, restaurants, manufacturing companies.”
And since there are plenty of those businesses around, it would appear that Lendio still has a lot of work to do.