“We have nearly 3,500 lenders throughout the U.S. that are looking to make a small business loan.”

Mike:
Hello, I’m Mike Sullivan for M.O., where we feature small business owners and entrepreneurs and then bring you tips, perspectives, and insights on what it takes to be successful. Today we’re featuring Brock Blake, the founder of Lendio. Lendio matches loans with entrepreneurs and small business owners so that they are matched with the right loan for them.

Brock, thanks for joining us today. Can you tell us a little bit about how you got started in this industry?

Brock:
Yeah, I’ve been an entrepreneur my whole life, super passionate about helping entrepreneurs and had started a few companies during college while I was there. I had studied a class, there was a class called “Financing New Ventures.” I was super passionate about that class.

It was all about helping entrepreneurs get angel financing or venture financing or debt financing. I really enjoyed it. I ended up being the TA of that class and was teaching that while I was at Brigham Young University. From there, what had happened was I won an entrepreneurial competition just right out of school where it’s kind of like the TV show “The Apprentice” without all the glitz and glamor. Where they had 100 entrepreneurs, they selected 20 to go through kind of an eight-week boot camp, and then out of those 20, there were 5 that were selected that were given $50,000 to start a business.

I was one of those five and used that money, partnered up with a gentleman named Paul Allen and my current partner, Trent Miskin, to launch, well, originally we were Funding Universe and our goal was to connect entrepreneurs to angel investors. At the time, I used that $50,000. We launched Funding Universe, and just to kind of connect that back to Lendio, we found out early on that connecting entrepreneurs to angels was very difficult because there were only a few entrepreneurs that were really a good fit for an angel investor.

We realized that more entrepreneurs are a better fit for SBA loans or working capital loans and those types of things. So we made the transition to Lendio. That’s kind of a little bit of my background and kind of an overview of how we got to where we’re at today.

Mike:
What sets you apart from other business lenders out there?

Brock:
Yeah, for us, there are a few things that really set us apart. The first thing that is important to us is helping the entrepreneur figure out which type of financing they’re the best fit for.

Let me give you an example. Most people don’t realize that when you’re thinking about a small business, you’re thinking about small business funding, there might be 15 different types of funding options. There could be angel investors. There could be small SBA loans. There could be equipment loans or merchant cash advance. Most business owners they don’t think about all the different categories. They just think, all I need is 25 grand. I don’t care which category it comes from. I just need 25 grand.

But for us, it’s important to help you understand which category you’re the best fit for. The reason why is once we kind of put you in a category, then we can match you up with a lender that is actively lending in that category. That we built the technology to help guide you, that’s the first thing that sets us apart.

The second thing that sets us apart is that we have, I think, maybe the largest database of active lenders in the United States. We have nearly 3,500 lenders throughout the U.S. that are looking to make a small business loan. The fact that we have so many lenders is a huge advantage.

Then the third is that we built the technology to make it easy for both sides to connect. So, whether that be the business owner, there’s a complex matching algorithm that happens. That’s our kind of sweet, our special sauce to connect the business owner with an appropriate lender in an efficient manner.

Mike:
So, nine out of ten business loans are rejected, and Lendio has a rate of something like 70 to 80% of loan applications are approved. Can you talk a little bit about that? Why you have such a high success rate?

Brock:
Yeah, you know, it’s interesting. Back in the day, most business owners they think, if I’m going to get a business loan, they go to their local bank on the street corner, right? They walk in the branch and they submit an application and they just hope that application’s going to get approved. The reality is that nine times out of ten, they’re getting declined.

It’s frustrating for the business owner because they’re making an application only to get it declined. It’s also frustrating for the lender because they spend a lot of time and energy and money going through that underwriting process. For us, that’s why our matching is so important, because there are certain lenders that like to do certain types of loans, and other lenders that do other types of loans.

Our technology maps the business owner to the right lender to dramatically improve the chances of getting that loan. Like I said, 70% to 80% of our customers that go through that process are getting approved for a loan because we’re taking the mystery out of it. We’re just matching up preferences.

Mike:
Who are some of Lendio’s clients, and how much have you helped finance over the course of time that you’ve been in business?

Brock:
We’ve helped businesses get about almost $300 million worth of funding approvals over the last few years. Whether that be restaurant owners and we’re helping them get an SBA loan to start. We’ve had business owners that are web developers and they have got a book of clients and they need help getting financed. Merchant cash advance customers or other things like that.

As I’ve said, we’ve helped over $300 million worth of loan approvals over the last few years.

Mike:
Are there certain things that you look for when trying to match up a business owner with a loan or things that a business owner can do to better prepare for greater success in achieving a loan?

Brock:
The first thing is it always comes back, almost always comes back to your personal credit. So business owner, super important to maintain really strong personal credit.

In addition to that, obviously, as your business is doing well and performing well, you’ve got good revenues, good cash flow, good profits, and things like that. Financially that’s going to help your chances dramatically.

The other thing to think about is how prepared you are. As you think about going to get a business loan, lenders are going to want to see that you’re a legitimate business. Do you have a website? Do you have a business plan? Do you have a financial model that forecasts cash flow over the next few years?

All of those things help a lender to be able to make a credit decision on whether they would like to be able to extend the loan to you or not. The more prepared you are, and, obviously, if your personal credit is good and your business performance is good, it’s almost sure that you’ll be able to get approved for a loan.

Mike:
We touched on this a little bit on this earlier, but you’ve recently made a branding change from Funding Universe to Lendio. Can you talk a little bit about what went into that decision and why you decided to make the move?

Brock:
So much of our early life as Funding Universe was tied, connecting entrepreneurs to angel investors and venture capitalists. That type of financing is very equity focused. What we felt like was that it was preventing . . . we want to be the Lending Tree for small business loans. We want to be that place where if you’re thinking about getting a small business loan they go to Lendio.

We just didn’t feel like that brand was portraying that message. When we were talking to lenders and/or business owners, kind of the first question they would ask us was, “Yeah, don’t you help entrepreneurs connect to angels?” That’s a part of what we do, but it’s only about 1% of what we do.

We felt like getting more of a debt focused name and brand would allow us to get over that hurdle and allow us to really be the company that we wanted to be. We felt like it was important to make that transition from a branding perspective.

Mike:
You were recently listed in Inc. 500 at the number 34 position. How did you do that? What do you attribute that rapid growth to in such a short period of time?

Brock:
Well, a few things. First of all, you can read about it every day. Small business financing is difficult, so there’s a lot of pain from lenders. There’s a lot of pain for the business owners. We are really passionate about helping both of those customers connect more efficiently.

Just because it’s a large market, so that’s one, large market, huge pain. Secondly, I attribute so much to the team we built. There’s an adage in the venture community where they say they’ll invest in an A team with a B idea rather than an A idea and a B team. We really have felt like we put together an A team.

Our president, Levi King, our CTO, Trent Miskin, our CFO, Mike Henderson, and all of our employees are just very passionate about helping entrepreneurs. I attribute it to those two things.

Mike:
Obviously, as you have mentioned, a team is very important, the people you work with, the people that make up the company. Tell me how you built such a strong team.

Brock:
Well, a couple of things. First of all, I’d say that most of our team members are really passionate about entrepreneurship. They’re passionate about helping other business owners. That helps them get in the door. Then once they get in the door and we tell them about our vision and where we’re going and how we want to be the recognizable name for small business loans in the United States, I think that helps a little bit. They want to be part of something fast growing and exciting. I think those things contribute to that. Finally, I would say, for us it’s important to have a culture where it’s a work hard, play hard culture. We’re very results oriented, but we also have a lot of fun. We do a lot, we have company parties and ping pong tournaments. We try to make it an environment and a culture where it attracts people to come work with us.

Mike:
Brock, thanks for joining and sharing a little about your business and your success. I appreciate it.

Brock:
Awesome, man. Thanks, Mike, I appreciate it.