“Think of how other connecting platforms like eBay, Match.com, and the powerful Facebook have already transformed our lives. Why should we accept any less in the small business loan segment?”

David Nayor, Co-President and COO, is a co-founder of BoeFly and manages all production of BoeFly’s marketplace, tools, and network from conception to implementation. In addition, David oversees the company operations and personnel.

BoeFly is a web based platform that connects small-business borrowers with over 1500 participating lenders. BoeFly’s proprietary compatibility matching technology significantly streamlines the execution of small business and commercial loan transactions, including all origination and sales. Comprehensive information from a business borrower is captured on BoeFly’s SmartForm loan request and then compared in real-time with the specific preferences from thousands of business lenders. The result is that business borrowers are matched with compatible lenders.

MO: What attracted you to the loan market?

David: Earlier in my career I worked for several large banks. In 2001 I left banking to work for a non-bank small business and commercial lender. We were constantly looking at improving our efficiency based on data that we could acquire both from our portfolio as well as market data. However, market data was highly fragmented for the small business segment. Further, small business lending still did not efficiently use the internet to connect borrowers and lenders and lower the cost of originating loans. How could borrowers find the right lenders for their loan request? How could they get the most favorable terms for their loans allowing them to run their business more profitably? How they could receive this information in the most transparent manner without conflicts of interest, like brokerage commissions, that cloud the deal or limit lender interest? How could lenders find borrowers that match their criteria without sifting through scores of submissions before finding the one that fits?

When we launched BoeFly it created the most efficient and transparent marketplace connecting borrowers and lenders. BoeFly is bringing efficiency, transparency and independence to the small business loan market. This is now more important than ever in light of the current state of our economy.

MO: How are you harnessing technology to dramatically simplify the process of commercial transactions?

David: We started from scratch and built a highly flexible and scalable platform to host the exchange where borrowers and lenders can connect. The platform is cloud based so there is no software to download and no hardware to be delivered. There are three main components that were crucial as we built the platform: User Experience, Security, and Matching Technology.

First, we want the borrower to have the best experience when building a loan package. Just as tax preparation software eased the burden of completing your annual tax return, building a loan package is greatly simplified by BoeFly. In addition to simplifying the process of completing a loan request, BoeFly has further revolutionized the borrowing process by creating a loan request process that is accepted by multiple banks – The borrower only has to build the loan package once for all banks instead of once for each bank that he thinks may be interested in providing a small business loan. The antiquated process of going from bank to bank is eliminated by BoeFly.

Second, we built in multiple levels of security so that the borrower’s confidential information is protected. BoeFly runs in a secure environment with strong data encryption and other best practice data security measures. This security is very important to our customers. On a user level, the borrower is ultimately in control of granting access to the lenders that they want to view their information. This ensures that the borrower has full transparency and visibility to the lenders who are interested in their deal. The borrower may know the lending institution and can grant access right away or they may want to contact the lender or research the institution further before making a decision to grant them access to their loan request.

Third, our matching technology (the algorithms) that we developed to connect borrowers and lenders lower the cost and time of origination. Our goal is to connect the borrower with only those lenders who are looking for that specific loan. The key to this is the high level of information that is built into the loan request package using BoeFly. Our technology is far superior to that which is found in many “Lead Gen” (Lead Generation) Websites for small business borrowers that capture customer contact information to be sold to brokers and lenders, but little else. BoeFly does not participate in Lead Gen and we do not sell customer information. We have created a robust and rich user experience to most efficiently connect borrowers and lenders.

MO: How did you manage to create a network of over 1500 lenders? Are you planning to add more?

David: Hard work! BoeFly has developed the only online community of captive lenders with who have set their lender preferences. Our lenders have actively participated in registering their preferences with BoeFly and log on to the platform to look at compatible deals vs. having unqualified deals “pushed” to them. New lenders are joining daily and existing lenders are constantly updating preferences as their loan and credit boxes change. For example when a lender expands their lending footprint they can update their BoeFly profile to include the new territory and will instantly see compatible loan requests from the new territory.

Lenders can set and change any combination of preferences so that they can focus on the right deals and eliminate the deals that don’t fit for them. The most successful method of attracting lenders has been by providing quality deal flow. The lenders who have adopted the platform understand that they can successfully source lower cost well packaged loan requests much more efficiently than other methods inclusive of their own marketing and development efforts. Further, bankers and lenders understand that their clients are already online looking for loan products and they need to be there as well.

Finally, BoeFly does not broker deals which has been a breath of fresh air for lenders. Not only does BoeFly reduce the cost for the lender and ultimately the borrower by not charging commissions, there is no “cleansing” of the deal or making the deal look like something it is not. This has been a concern for many lenders when there is a success based middle man involved. BoeFly only ensures that the package is complete, but it is up to the borrower to present the right information and the lender to do their own underwriting on the deal. There are 7000 community banks and several thousand Credit Unions who participate in small business lending. With the growth that we have had we foresee having the majority of lenders on our platform within the next two years.

MO: Why do you think the growth and success of small businesses are so important in the current economy? How does it feel to be contributing to their possible success?

David: Job Creation. BoeFly is well positioned to have a major impact on new job creation. Small business account for around half the GDP and more than half the employment in the US. With unemployment hitting 30-year highs it is more important than ever to support small business. We have seen major legislative initiatives such as the $30 Billion Small Business Loan Fund have trouble getting off the ground because they cannot address the much bigger systemic inefficiency of the commercial lending environment. BoeFly has created the most cost effective and efficient access platform to connect lenders and borrowers. Think of how other connecting platforms like eBay, Match.com, and the powerful Facebook have already transformed our lives. Why should we accept any less in the small business loan segment? BoeFly brings small business lending into the 21st century.

We are also gratified to be helping the thousands of veterans now entering civilian life by owning small businesses. They are highly trained individuals who may have challenges finding traditional jobs. It is important that we give them access to capital so that they can purchase or create their own businesses. We were just out in Las Vegas for a conference and met with a BoeFly client, Craig Rector who is a successful business owner and veteran. Craig served for 21 years and after being laid off as a bank auditor decided to start his own business. Craig sourced a loan on BoeFly to build and open a Quiznos franchise. He now employs five people, which is a huge feat considering the economy of Las Vegas.

MO: How do you match small business borrowers with lenders around the country? What’s the process look like and how tailored is your approach?

David: BoeFly is like a dating site on steroids, only your potential date is with a banker or borrower. Our matching technology (algorithms) take the loan request data input by borrowers and match it to the preferences registered by BoeFly member banks and lenders. Our process factors very specific preferences under more general categories such as loan types, loan parameters, credit parameters and geography.  Lenders can also assign a weight to each preference to further refine their searches. When the lenders set their preferences BoeFly ranks each deal by compatibility and alerts them when new deals match. Lenders can also browse and sort the deals any number of different ways if they choose.

BoeFly is a tremendous improvement over the prevailing method of sourcing a small business loan, where borrowers had to submit multiple loan applications and bankers had to review each loan application as it came in the door without knowing if they met any of the banks’ loan or credit criteria – an incredibly costly, time consuming and inefficient practice. While not every borrower will successfully get the loan that they seek, BoeFly does provide valuable feedback as to the strengths and weaknesses of their request based upon our database of lender preferences.

MO: What’s the most exciting development on the horizon for BoeFly in 2012?

David: With the thousands of borrowers and lenders who are using BoeFly we have just surpassed $2 billion in posted transactions. Our core focus will be to continue to connect business borrowers and lenders in the most efficient manner possible. And we will continue to evolve our technology to do this in the best way possible for both borrowers and lenders. The overall growth of the company is exciting in itself. Aside from our direct borrower and lender users we now have approximately 100 franchisors, from the largest brands to the smallest, using BoeFly to help their franchisees obtain financing to acquire a franchise, expand or upgrade an older store.

Behind the scenes the growth of our user and transaction base is also enabling us to develop a large database of information on commercial lending, including macro level information on both lender and borrower needs and preferences. For instance we have visibility into non-proprietary borrower and loan profiles in the aggregate and are in a position to be the first to see shifts in borrowing and lending trends. We can slice and dice data by industry, geography, loan size down to very specific borrower profile categories. We can show what types of deals lenders are attracted to and what type of lenders borrowers are attracted to. Given our independence and position the BoeFly marketplace will be able to provide knowledge that has never been available to borrowers, franchisors or lenders. BoeFly will empower all of the players in the small business market to make better decisions based off of real data.