Businesses turn to lending markets

As companies continue their endless work to make processes more efficient, today’s chief financial officers (CFOs) play a vital role in helping to determine where they should invest their resources.

At Lendio, a marketplace that brings together lenders and small business owners looking for financing options, David Bedell, the company’s new chief financial officer, places a high priority on resources that help people get through the application process. Sometimes it’s done better with automation, sometimes with people.

“So that’s what I spend a lot of time doing, helping to find that balance,” Bedell told PYMNTS. “When do we spend the money on the engineering side to get value for money? »

What also contributes to Lendio’s efficiency is that it doesn’t often have to deal with collections or paper checks. Bedell said he didn’t have to spend a lot of time reviewing the collections and didn’t see any checks during his time with the company.

“Our lenders are the ones who pay us and they don’t want paper checks either,” Bedell said. “They are very progressive lenders trying to do everything as quickly as possible on their end.”

Meeting growing demand for corporate borrowing

Business borrowing on the Lendio platform has grown very rapidly and continues to accelerate since the end of Paycheck Protection Program (PPP) loans. Bedell attributed this to two factors.

First, businesses that were on the platform but used PPP loans instead come back for a second loan or a second draw on a loan they had before. Also, more and more people are starting new businesses and need capital to do so.

To meet these demands, Lendio gets people funded within days. When a company applies to the platform, they see responses quickly, often with three to five options.

“We get people funded extremely quickly,” Bedell said. “What a lot of these small businesses really need is just access to capital to close a deal, to do something very quickly, so speed is important.”

Following an acquisition last year, Lendio has the technology to onboard banks to its platform and help them stay competitive. As more regional lenders register on the platform, small businesses will have even more opportunities to obtain financing.

Access capital quickly and at a comparable rate

The platform is experiencing high demand for unsecured loans as they are faster and easier to fund.

Current inflation shouldn’t have much of an impact on Lendio’s borrowing volume, Bedell said. Many companies that come to the platform have the opportunity to make big returns, so an extra percentage point or two in the loan won’t make a difference.

As chief financial officer, Bedell said it’s hard to say whether businesses in general should take on debt because restaurants, retail and construction are all different. After seeing what happened in 2008, he said he wouldn’t advise people to use leverage to a dangerous point. For many people, however, access to capital can mean they can grow faster and expand their business.

“I think the simple CFO answer I would give people is if you can grow your business faster and get the leverage of debt, that often makes sense,” Bedell said. “Often you get more return on equity if you use debt.”



On: Seventy percent of BNPL users say they would prefer to use the installment plans offered by their banks – if only they were made available. PYMNTS’ Banking On Buy Now, Pay Later: Installment Payments and the Untapped Opportunity of FIssurveyed over 2,200 US consumers to better understand how consumers view banks as BNPL providers in a sea of ​​BNPL pure-players.

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