There are over 28 million small business in America — a diverse group of offerings that, taken collectively, are often referred to as the “backbone of the American economy.” And, given that SMBs of various stripe employ 48 percent of the American workforce, that seems to be a fairly reasonable description.
And while those small business are a very diverse group, in the years since the Great Recession (and the less-than-great recovery that followed), those SMBs have been united by a common problem — lack of easy access to capital.
“If you put yourself in the shoes of an owner running a small business, they have a lot to manage with sales, marketing, payroll, inventory — and what they don’t have time to do is become an expert on small business lending. So what most business owners do when they need a loan is go to their bank, fill out a lot of long forms of paperwork and then wait a long time on a bank loan that 80 to 90 percent of the time they then get turned down for,” Lendio CEO and co-founder Brock Blake told PYMNTS about the somewhat troubled state of SMB lending today.
The obvious problem in this situation, Blake noted, is that businesses aren’t getting the access to capital they need to expand. The less obvious issue is that business are going without funding when they don’t have to.
“There are so many different type so loan products out there — it is not like mortgage lending, which is pretty straight forward. In business lending there are lines of credit, term loans, SBA loans, account receivable loans, equipment loans, credit cards — loan after loan after loan — and it gets overwhelming.”
And that, Blake says, is where Lendio steps into the equation with a loan marketplace that offers businesses the option to fill out one fairly simple application and gain access to the 75 lenders Lendio offers via its platform. The goal is to make the experience simple for the small businesses in Lendio’s segment — what Blake referred to as “the classic Main Street small business with 5 to 20 employees.”
“We help restaurant owners, landscapers, dry cleaners, gas stations and small manufacturers — really the firms that are literally the backbone of the economy. Our average loan size is between $30 thousand and $50 thousand, though we do loans up to a few million. But the majority of our customers are looking for an infusion of capital because they are trying to expand, buy equipment, hire and expand their worker base, or go more digital and launch a new website.
And this week, Blake noted, Lendio is announcing a partnership that will allow them to bring the more customized loan access to a much larger audience of SMBs. Going forward, Lendio will be working with Comcast Business to provide streamlined and enhanced access to the Lendio marketplace for Comcast Business customers.
What The Deal Will Mean
Blake noted that for their part, the team at Lendio is both “stoked” and “thrilled” with the new relationship his firm is forging with Comcast going forward — since the partnership will give them nearly instant access to a much larger pool of the exact type of merchant that Lendio was built to serve.
“Comcast provides internet, phone and cable services for an enormous population of Main Street business in the United States,” Blake said.
And more than provide those digital services, Blake noted, Comcast Business, in recent years, has also become increasingly interested in building additional value-added services into their offerings for SMBs. That, after research, led them to lending, because what they heard from their customers overwhelmingly was that they needed efficient and easy access to capital to grow.
That sent Comcast looking for a partner.
“Comcast consistently explores new ways to provide greater value to our business customers through technology that helps boost performance,” said Denice Hasty, chief marketing officer, Comcast Business. “Many of the small businesses we serve are seeking access to capital, and Lendio’s solution provides a curated set of qualified lenders that our customers can quickly access to get the funding they need to grow their business.”
And, Turner noted, because they are working with Comcast directly, they can even further streamline and perfect their product-matching work for SMBs because of all the data Comcast has on offer.
“Comcast has this amazing rich customer base of SMB owners, and with that, they have a lot of information on them. How long have they been in business, how long have they been a subscriber, how many employees do they have — we can leverage all of that at Lendio, and based on that information say, “we think this segment of your customer base can be pre-approved or qualified for a loan.”
The work Comcast and Lendio are doing together now, Blake noted, is taking their respective data sets and combining them — and then turning data scientists loose on that information to begin dividing Comcast’s massive customer base into segments so that better outreach can begin.
“What is fun and what has been great about the new relationship we’ve been building with Comcast is they are really committed to testing out different marketing strategies to see what will work best and what customers will most appreciate in the message. The are excited to test that our through a variety of means — so that we can figure out what really works for the customers.”
The partnership is still in early days, Blake noted, and they are still very much in test mode with Comcast as they work to fold in all those Main Street businesses and their data. But so far, he says, so good, and hopefully the best is yet to come.
“If early results are an indicator of what this will look like over time, we are very excited.”