Business financing is a complex process, and securing a loan from a financial institution normally requires a lot of work and research. Business loan marketplaces, like Lendio, have sought to make this process simpler by connecting business owners with financial institutions that provide the services they need. But how reliable are they? Lendio review will discuss the Lendio platform, including its services, terms, and overall pros and cons.
- Terms, Services, and Requirements for Lendio
- The Benefits and Drawbacks of Lendio
- Cons of Using Lendio
- Lendio’s Public Perception
- Should You Go with Lendio?
- Final Thoughts
Lendio is a platform for business financing that connects businesses with lenders. While Lendio does not actively originate loans, its network of over 300 business lenders, including large names like Kabbage, OnDeck, Amex, Fundbox, and many others, is intended to be a one-stop shop for funding.
However, Lendio does not offer commercial loans. Instead, this firm acts as a matchmaker between lenders and business owners. In principle, you tell Lendio who you are and what you’re looking for, and they do the rest.
Using an aggregator like Lendio can be beneficial for a variety of reasons, including the fact that the company does the majority of the work of finding financing for you (saving you time), you are presented with multiple offers (ensuring you aren’t missing out on a better offer), and the service is completely free to use.
Lendio is undoubtedly worth a go for those in need of business capital. Customers have praised Lendio’s customer service for being attentive and helpful and the application procedure for being quick and simple. If this is your first time dabbling in the alternative loan sector, Lendio is an excellent place to begin.
Terms, Services, and Requirements for Lendio
Lendio is a marketplace for business loans. Provide information about yourself and your business, and Lendio will assist you in locating lenders who will accept you for their wide range of financial items. The availability of specific products is determined by various factors, including your credit score, the industry you work in, the length of time you’ve been in business, and the amount of money you generate. Loan terms will also differ between Lendio’s partner lenders.
Loan Types and Terms
Lendio offers short-term, business-term, merchant cash advances, commercial credit lines, SBA loans, and equipment finance loans. Remember that the lender will choose the fees, terms, and collateral.
Let’s review each of the available options:
An installment loan has less than a year in which debtors are charged a flat fee rather than the standard interest rate. Repayments are made on a daily or weekly basis.
- Loan amount: $2,500 to $500,000
- Term length: one to three years
- Starting interest rate: 8%
Business Term Loans
Borrowers are given the loan amount in the form of a lump sum in exchange for promising to repay the amount borrowed plus accumulated interest. Payments can be paid on a monthly, weekly, or daily basis. The terms of these loans vary.
- Amount borrowed: $5,000 to $2,000,000
- Term length: one to five years.
- Starting interest rate: 6%
Merchant Cash Advances
The funder buys a portion of your future card-based sales in exchange for a flat sum. The funder is paid by deducting a percentage of your daily card-based sales.
- Loan amount: $5,000 to $200,000
- Term length is up to two years.
- Interest rates begin at 18%.
Rather than a flat sum, the lender provides a credit limit against which you can borrow. You can draw on your line of credit as often as possible if the total amount drawn does not exceed your credit limit.
- Loan amount: $2,500 to $500,000
- Term length: one to three years
- Interest rates begin at 8%.
SBA Loans from Lendio are term loans and other products that the Small Business Administration partially guarantees. These Lendio SBA loans provide several advantages over most other loans in terms of term duration, interest rates, and allowable loan amounts.
- Amount borrowed: $50,000 to $5,000,000
- Duration: 10 to 30 years.
- SBA 7(a) variable and fixed rate: 7% to 9.5% and 9.75% to 12.75%, respectively.
- SBA Express: 9.25% to 12.75%
- CDC/504 portion: 4.922% to 5.20%
- Small Business Administration Microloan: 6% to 9%
- EIDL SBA: 2.75% to 3.75%
Financing for Equipment
Loans and leases meant to support the purchase or leasing of tangible goods.
- Amount borrowed: $5,000 to $5,000,000
- Term length: one to five years.
- Starting interest rate: 7.5%
Any company can use Lendio’s services, but there is no funding guarantee. Lendio reports that only six out of ten enterprises are authorized for a business loan through their service.
Because Lendio works with over 300 entities, ranging from startup business loan specialists to banks and SBA lenders, your company does not need to meet any specific standards to qualify for this service. Indeed, Lendio no longer offers suggested prerequisites for enterprises.
Because Lendio isn’t a lender but links you with lenders, the qualifications for a business loan differ based on the lender. However, based on a review of all of their lenders, the following are some of the qualifications that you may need to meet:
Personal Credit Rating
It’s the individual lender, not Lendio, that determines the minimum personal credit score required to be authorized for business lending. Lendio only provides this information for a few different types of loans, including:
- Loans for new businesses. 680
- Business credit line (560).
- Financing for equipment. 650
Although Lendio does not specify the minimum personal credit score required for all of its alternatives, it is recommended you have a credit score of at 670 or higher to maximize your chances of approval.
Most lenders in Lendio’s network require you to have been in business for at least six months before applying for a loan, even for a starter loan. Some types of loans may have more stringent restrictions, such as US Small Business Administration (SBA) loans (at least two years) or equipment financing (at least one year).
Annual Revenue Demands
The amount your company must make to be eligible for financing is determined by the type of financing you ask for and the individual lender Lendio matches you with. Annual revenue requirements for business loans typically range from $50,000 to $250,000.
Lendio, on the other hand, only provides examples of requirements for a few types of financing, such as:
- Business credit lines $50,000 (minimum)
- Financing for equipment. $50,000 (minimum)
Rates of Interest and Fees
Lendio does not impose a service fee, instead, their revenue is generated by its partner lenders. Loan terms will vary based on the partner funder you are collaborating with. These fees could include:
- Interest: The primary expense of borrowing. Interest is typically stated as a percentage of the loan amount. This figure might be perplexing because lenders may quote a daily, weekly, quarterly, or annual interest rate. Check to see which one you’re looking at.
- Flat Fee: Some alternative lenders charge fixed fees instead of interest rates, specifically those offering short-term loans and merchant cash advances. A fixed fee is either a percentage of the loan amount or a decimal multiplier. So, if you borrowed $10,000 at a 20% interest rate (or 1.2 percent), you’d owe $12,000. While fixed fees are easier to understand than interest rates, they can frequently be more expensive.
- Origination and administration costs: These are expenses that the lender may or may not impose in addition to your interest rate or a flat fee – they represent the “cost” of processing and administering your loan. These costs could be fixed or based on a percentage of your loan amount. These fees may not be revealed upfront, so inquire about them with your lender.
- Penalties for Prepayment: You’d think a lender would be delighted to get their money back sooner, wouldn’t you? Not usually, especially if they expect to earn minimal interest over time. Certain lenders may charge you a fee if you pay off your loan early. If you’re considering it, make sure you work with a lender who doesn’t charge this cost.
- Additional Fees: Additional charge types? If you can think of it, someone is undoubtedly charging for it. Some lenders, for example, may charge fees for processing specific sorts of payments.
The Application Procedure
If you are a business owner interested in applying, you must create an account and fill out an application. The application will request basic information about you, your company, and its finances. Lendio will then execute a soft pull on your credit, which will not affect your score.
It only takes a few minutes to fill out an application to be matched with a lender on Lendio’s website. Lendio will usually contact you within a day or two to discuss your alternatives and assist you in completing your application with a specific lender. Because each lender differs, the application requirements will differ depending on the lender you match.
Lendio will shop your information to find offers from lenders you could be eligible for. According to the customer service agreement, this procedure should take no more than 72 hours.
Lendio’s website contains all the information you need about the service, and the salespeople are similarly forthcoming. Customer reviews do not include cases in which customers were taken aback by fees or other unexpected policies. The only catch is that you won’t know the exact terms of your loan until you’re matched with a lender. Given that Lendio does not have that information, it does a great job of preparing prospective borrowers for what to expect.
Because there are some small changes across loan programs, you may need to browse through some pages to get all the information. Use the loan calculators to get a sense of what to expect.
However, Lendio’s generally strong sales and advertising transparency ranking recently hit. The Federal Trade Commission and the Small Business Administration also warned the company about potentially deceptive coronavirus relief marketing.
Customer service can be reached by phone or email. You can also connect with the company via social media platforms such as Facebook, Twitter, Instagram, and LinkedIn.
When you apply for the service, you will be assigned a financing manager who will be your primary point of contact. Your financing manager will present you with offers, assist you in determining which options are appropriate for your company, educate you on loan products, and be ready to answer any concerns you may have.
It’s worth mentioning that Lendio has a public customer service agreement on its website that promises customer service criteria like “transparency and respect” and answering issues “in a timely way.” Although these are not especially novel norms, the fact that Lendio has made its agreement public shows that the company recognizes the importance of these concerns in providing a great experience for borrowers.
Customers praise the service for being proactive, friendly, and open, and many appreciate being allocated to a single funding manager familiar with their company and situation. However, during phone discussions, some consumers complain that the service is too aggressive with sales pressure. Some have also expressed dissatisfaction with the volume of calls they receive from funding managers.
The Benefits and Drawbacks of Lendio
There are many benefits when using Lendio as your go-to location for business loans, but it’s not without its drawbacks.
Let’s take a look at what makes Lendio great and the few issues that they have:
Using Lendio Simple 15-Minute Application
Many business loan providers force customers to undergo a difficult and time-consuming application process. Lendio features a single application that is quick, free, and simple to complete. Borrowers can also receive funding in as little as 24 hours.
Loan Alternatives from Over 300 Lenders
Lendio is dedicated to assisting each business owner in identifying the best financing solutions available through the lender of their choice. As a result, the firm provides lending possibilities from over 300 lenders. These alternatives include some well-known banks and lending institutions:
- American Express
- Headway Capital
- Funding Circle
- Opportunity Fund
Borrowers can be confident that they will get a good loan and rate because they have various options.
Various Loan Types
Lendio works hard to help business owners locate loans that meet their needs and budget. Therefore, a variety of financing options are available to small businesses, including business lines of credit, short-term loans, merchant cash advances, business term loans, business credit cards, equipment financing, SBA loans, and more.
Accurate and practical Loan Calculator
Because the firm works with many lenders, its loan calculator is accurate and beneficial to business owners. The Lendio website provides various calculators for each form of business loan that borrowers may be interested in, including the following:
Business Credit Card Calculator Business Term Calculator Equipment Loan Calculator Invoice Factoring Calculator Short-term Loan Calculator Startup Business Loan Calculator Commercial Mortgage Calculator Line of Credit Calculator
Lendio’s website includes live chat software, allowing clients to receive quick, on-demand customer care. Lendio staff is accessible to assist borrowers and answer queries about business loans within minutes using this platform.
Incentive for Bookkeeping Software
Lendio encourages you to get your books in order by giving Sunrise, an accounting software. Prospective borrowers with active Sunrise accounts are twice as likely to be funded. While it is not a guarantee of funding, using Sunrise by Lendio can help you get a head start when applying for a business loan.
Sunrise monitors incoming and outgoing funds in your company’s relationships with consumers and vendors. It also connects your bank accounts, enabling you to produce and manage invoices (set to paid, unpaid, or overdue), and generates profit and loss graphs.
Lendio provides a satisfactory client experience, as seen by hundreds of positive evaluations. Its ratings and reviews highlight speedy funding, excellent customer service, affordable rates, and large loan amounts. Borrowers can rest easy knowing that Lendio is a reputable organization that outperforms many alternative lenders.
Cons of Using Lendio
Variability of Options
Though having a large number of small business financing options is not the worst difficulty a lending company may have, it creates one complication: making rate guarantees becomes a challenge.
Because there are so many alternative lenders, Lendio cannot make rate or fee promises because it does not determine the terms for loan offers. Furthermore, some borrowers may be overwhelmed by the sheer volume of possibilities available through a network of over 300 lenders.
It is not a financial institution
Prospective borrowers should be informed that Lendio does not finance loans directly. Rather, it is a technology business that uses a proprietary algorithm to promote the ideal matching of borrowers and lenders.
As a result, Lendio is not liable for the loan product’s interest rate, repayment period, origination fee, loan forgiveness, or any other feature. These and other details are up to the direct lender’s choice.
Remember that each Lendio review may reflect the consumer’s experience with Lendio’s platform, the quality, and service of the loan obtained through one of Lendio’s affiliated lenders, or both.
There is no face-to-face consultation
Each borrower is assigned a specialized personal funding manager who will ask about your needs and lead you through several loan possibilities, exactly like an internet lender or bank representative would. However, all of these contacts are virtual; there are no in-person consultations at a physical place, which may dissuade some borrowers.
Lendio’s Public Perception
Lendio has over 19,000 ratings on Trustpilot, with an average rating of 4.8 out of 5. Furthermore, the company has several longer testimonials on its YouTube channel.
Some of the things people admire about Lendio are as follows:
- Customer Support: In most circumstances, users found Lendio’s customer service helpful and responsive. Customers were generally pleased with the dedicated case managers.
- Simple to Use: Many consumers found the unified platform and interface to be straightforward.
- Quick: While the process is a little slower than other alternatives, it is still quite quick, especially compared to traditional sources.
- Stress Reduction: Lendio eliminates most of the legwork borrowers would otherwise do with each lender.
- Simple To Qualify: Customers who struggled to qualify for traditional loans liked that Lendio was able to find their finance at reasonably affordable conditions.
Lendio has received 186 complaints in the last three years, with 93 occurring in the last 12 months. As one might expect, given the timing, these are largely PPP-related complaints. Lendio has an A+ rating with the Better Business Bureau (BBB).
As previously stated, Lendio was also warned by the Federal Trade Commission and the SBA for “misleading coronavirus relief promotion.”
However, some people have complained about the following:
- Delays: While still rapid compared to traditional lending, Lendio is a little slower than many of the individual companies with which it collaborates. Some clients also expressed concerns about falling between the cracks.
- Prolonged Process: One prominent complaint about delays mentioned receiving constant fresh offers from Lendio that were never followed through on.
- Hard Credit Inquiries: Some consumers complained about receiving hard credit inquiries when they were informed that only soft ones would be made.
- Extensive Documentation: Some clients were required to furnish far more documentation than anticipated.
- Mismatches: Some clients complained about being linked with lenders who were not a good fit for their company or industry.
Should You Go with Lendio?
Select Lendio. If–
- Lendio is ideal for business owners who want to be comprehensive. You can save time by checking with over 75 lenders in its network instead of checking with many lenders individually.
- If you’re unsure which funding option is ideal, Lendio can assist you in determining which of its funding alternatives is appropriate for your company.
- If you would like to deal with a respected company, Lendio features some of the top online small business lending reviews.
Avoid using Lendio. If–
- Lendio is not usually appropriate for business owners who value privacy. Lender networks, such as Lendio, frequently distribute your contact information to many lenders so that you may receive a barrage of phone calls, emails, and mailings.
- Lendio isn’t for you if you want to vet your lenders. Instead of conducting preliminary research on a range of lenders, Lendio’s strategy connects you with individual lenders.
Lendio is a great business loan marketplace for business owners that want a simple and quick application process, a wide variety of options, and different lenders to choose from. The marketplace even helps you determine whether the loan you are looking at is the right choice for your business. However, if you value privacy, you might be better off not working with Lendio, as they are known to share your contact details with different financial institutions.