US lending platform Lendio has facilitated over $1.5 billion in loans to small businesses

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In total, lending platform Lendio has facilitated $1.5 billion in loans via its platform, per the company's press release. The company was founded in 2011 and is the largest small business loan marketplace in the US, having facilitated over 75,000 loans according to Lendio.

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It acts as a bridge between small businesses and lenders and currently connects 75 lenders in the country, including OnDeck, Kabbage, and Bank of America. Users can apply for various kinds of loans, including short-term loans, business-term loans, and SBA loans.

Here's what it means: Platforms like Lendio are likely attractive to small businesses due to their easy to use and efficient interfaces, and we expect interest in alt lenders to increase in the near future.

  • Lendio's platform enables small businesses to access loans quickly — a major advantage platforms have over conventional bank loans. The application process takes as little as 15 minutes — compared with the 29 hours businesses spend applying for a bank loan — and gives businesses access to multiple lenders that have loan offers suited to their needs, according to research from Lendio. Additionally, just 20% of loan applicants are approved by conventional lenders, while 60% of applicants are approved with lending marketplaces like Lendio, per the same research. Faster loan approval is a key advantage for all digital platforms over conventional, and a major reason small businesses have started using the services to begin with, which will likely help Lendio to remain successful in the future.
  • And in general, businesses are increasingly interested in applying with online lenders. In 2018, 32% of small businesses applied for credit with an online lender, up from 24% in 2017, according to research from Federal Reserve Banks in the US. With conventional lenders still struggling to meet the demands of small businesses, interest in applying via alternative methods should only grow stronger, especially since businesses get access to a range of lenders that they can choose from.

The bigger picture: Lendio's model of connecting borrowers with lenders rather than lending itself might prove a better business route as the alt lending space crowds.

There are various alt lenders competing in the US, and operating as a bridge between borrowers and lenders might help Lendio to remain relevant. Alt lenders including Kabbage, OnDeck, and Lending Club are all competing to attract the most businesses to their platforms. By not competing with those companies but rather helping them gain further visibility and access to more clients, Lendio has likely set itself up for a sustainable business model.

Lendio has some direct competitors, like Become (formerly Lending Express), but the platform's recent moves to add features for small businesses beyond lending could help it maintain its edge. Lendio recently acquired bookkeeping startup Billy to diversify its offerings.

With the acquisition, Lendio launched its own bookkeeping software under the name Sunrise, which offers users access to accounting, cash flow management, loan and credit information in one platform. While Sunrise currently operates on a separate website, integrating it directly into its lending marketplace, Lendio could further differentiate from competitors and move toward an end-to-end solution.

Ultimately, that could help it grow its loan volume and maintain its lead as the largest small business loan marketplace in the US.

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