Plousio Steps Out Into SMB Lending

It has been a wild year for marketplace lenders.  Well, in fairness, it has been a wild couple of years for marketplace lenders — but the first few years of that wild ride were the fun kind, like a roller coaster. The last six months or so, on the other hand, have been the less fun type of wild ride more comparable to being on a roller coaster with questionably functioning breaks.  What was hailed a year ago as the future of financial services has of late been demoted to a possible future of financial services, but far from a foregone conclusion.  Marketplace lenders have a lot of potential — but also a lot of ground to cover when it comes to growing up and getting to scale.

But every market hiccup has an upside — for some players, anyway.  And while the future of the marketplace is looking much less settled than it was a year ago, the upside  is that it means the future of the market can still be influenced and written by up-and-coming firms.

Firms, perhaps, like Plousio — a Framingham, Massachusetts-based SMB marketplace lender that is just getting into the market now.  Because even this far into the recovery, small businesses increasingly run into the financing wall.  They need capital — and the lending environment doesn’t favor small businesses looking for loans unless they have a very long track record of profitability and they aren’t in a particularly big hurry.  Underwriting processes at banks have picked up in speed some in recent years — but complaints about SMB lending being paperwork-heavy and time-consuming persist.

“Running a business is never easy, but it’s especially tough for small business owners,” noted CEO Alex Chang. “Finding the capital to support the business is even harder. Plousio is a lending marketplace that connects small business owners with 70+ direct lenders that are ready to provide them with the capital their businesses need.”

Plousio is very new — and still pretty small. Right now they are advertising a network of around 70 direct lenders for the businesses applying to borrow on the platform.

But Plousio brings some unique elements to the table. The first is its “fancy algorithm” called “MatchMeWhen.”  MMW ensures applicants are connected only to lenders that meet their needs by customer matching business profiles (created on Plousio’s site).  The Plousio team likens their algorithm to that of a dating website that tries to cut down on the clutter in users’ lives by narrowing their list of potential suitors to those who actually are a match.  Lending, insofar as it is like dating (but more legally enforceable and longer term in many cases) can do some similar matchmaking to ensure that all involved get the best result.

And Plousio charges no fees to users — at least, for the time being.

And, of course, the question remains — can they, or any new marketplace lender, compete in a world where suddenly marketplace lending looks a bit suspect to a lot of investors?

But the reality remains — the small businesses need to borrow money for their own survival and for that of the U.S. economy in general, since SMBs employ the majority of American workers.  As long as that need persists, some entity or other will lend to those businesses.

Which one it will be — and if it will be a banked-based or marketplace lending model going forward — that remains a jump ball.

But the team at Plousio clearly has decided which side they think it will drop to. Now the trick will just be getting into position to catch it.