Lendio Review
- Date Established
- 2011
- Location
- Woodbury, NY
Pros
- Relaxed credit score requirements
- 2-7 days time to funding
Cons
- Opaque terms and fees (partners)
Overview
In the interest of clarity, let’s get this out of the way first: Lendio does not originate business loans. Rather, this service operates more like a business funding matchmaker.
Lendio is a business financing platform that matches customers to funders. While Lendio does not originate loans directly, its network of over 75 business funders, including big names like Kabbage, OnDeck, Amex, BlueVine, and many others, is designed to be a one-stop shop for financing.
Using an aggregator such as Lendio can be beneficial for a few different reasons: the company does most of the work of finding financing for you (which saves time), you are presented with multiple offers (you can be sure you aren’t missing out on a better offer), and the service is absolutely free to use.
For those who want to give it a try, however, Lendio is certainly worth the effort. Customers report that Lendio’s customer service is responsive and helpful, and the application process is fast and easy.
Interested in learning more? Read on for the details!
Table of Contents
Services Offered
Lendio is a business loan marketplace. Give them information about yourself and your business, and they’ll help you find lenders for which you’re eligible.
For general information about alternative lending products, check out our guides on:
Borrower Qualifications
Any business can apply for Lendio’s services. Unfortunately, you are not guaranteed funding; according to Lendio, only six out of 10 businesses are approved for a business loan through their service.
Because Lendio works with over 75 different entities, ranging from lenders who specialize in startup business loans to banks and SBA lenders, your business does not have to meet any specific qualifications to be eligible for this service.
That said, just because you’re eligible to give the service a go does not mean you will actually receive funding. To have the best chance of getting funding, Lendio recommends you meet or exceed these qualifications:
| Time in business: | 6 months |
| Credit score: | 550 |
| Revenue: | $10K/month |
Some businesses may have trouble meeting those guidelines. For example, startups, those in risky industries, or businesses with little revenue may have more difficulty finding financing.
Rates & Fees
Lendio does not charge a fee for their service. Instead, Lendio’s revenue comes from their partner lenders. Per the FAQ:
Lendio does not charge you to be matched to a potential lender. The offers that appear on the site are from companies from which Lendio receives compensation.
Fees for borrowing capital will vary depending on the partner funder you’re working with. These charges may include interest or a flat fee, origination fees, administrative fees, prepayment penalties, or other fees depending on the funder.
Want to know what kind of fees to expect from your potential lender? Check out our article about common fees charged during the lending process. For more specifics, check to see if we’ve reviewed the service on the Merchant Maverick site.
Lendio does offer some ideas of what you can expect for each product.
Business Lines of Credit
Here are the terms you can expect from a business line of credit through Lendio.
| Credit limit: | $1,000 – $500,000 |
| Term length: | 1 -2 years |
| Interest rate: | 8 – 24% |
| Origination fee: | By lender |
| Collateral: | Unknown |
Revolving lines of credit grant businesses a bit more flexibility than they’d have with a loan, albeit usually with some administrative fees. You can borrow, at will, up to your credit limit, paying interest only on the amount you’ve currently used. As you pay off your principle, that amount again becomes available to borrow.
SBA Loans
Here are the terms you can expect from an SBA loan through Lendio.
| Credit limit: | $1,000 – $5,000,000 |
| Term length: | 10 – 25 years |
| Interest rate: | Prime+ |
| Origination fee: | SBA fees + by lender |
| Collateral: | Varies |
Businesses that qualify can get an SBA-guaranteed loan through one of Lendio’s partners. These loans tend to have lower interest rates and longer terms than the ones newer small businesses may otherwise be able to access. There are a number of different types of SBA loans, the most common being 7(a) and 504.
Short Term Loans
Here are the terms for short-term loans through Lendio.
| Credit limit: | $2,500 – $500,000 |
| Term length: | 1 – 3 years |
| Interest rate: | Unknown |
| Origination fee: | By lender |
| Collateral: | Unknown |
If you need money fast, especially if you don’t have great credit, a short-term loan can come in handy. These loans typically have expedited and simple application processes, with funds reaching your bank account in a day or two if you’re lucky.
Be aware, however, that most short-term loans have to be repaid daily through an automated withdrawal from your business bank account. Short-term loans usually don’t accumulate interest like other term loans. Instead, they have a flat percentage fee. So, for example, if you borrow $1,000 at a 1.2 factor rate, you’ll owe $1,200.
Business Term Loans
Here are the terms for business term loans through Lendio.
| Credit limit: | $5,000 – $2,000,000 |
| Term length: | 1 – 5 years |
| Interest rate: | 6%+ |
| Origination fee: | By lender |
| Collateral: | Varies |
Business term loans are closer to the traditional bank loans you may be used to. They accumulate interest and (usually) have monthly payments. Depending on the lender, you may have to provide collateral.
Merchant Cash Advance
Here are the terms for merchant cash advances made through Lendio.
| Credit limit: | $5,000 – $200,000 |
| Term length: | Up to 2 years |
| Interest rate: | 18%+ |
| Origination fee: | By funder |
| Collateral: | Rarely |
A merchant cash advance superficially resembles a short-term loan but differs in some important ways. Technically, you’re not borrowing money, you’re being paid for a claim on your future credit card receipts.
MCAs are an expensive way to get funding for your business, but they tend to have very low credit qualifications. Like short-term loans, the interest rate associated with them is actually a flat fee. MCAs don’t, however, have definitive term limits. Instead, your funder will collect a percentage of your daily credit card sales until the advance has been paid off.
Application Process
If you’d like to apply, you must start by creating an account and filling out an application. The application will ask for basic information about yourself, your business, and your business finances. At this point, the company will perform a soft pull on your credit, which will not have an effect on your score.
Lendio will shop your information around to get offers from lenders you may be eligible for. According to the customer service agreement, this step should take no longer than 72 hours.
A Lendio representative will get back to you with any offers received on your behalf. You can compare offers and choose the one best suited for your business and situation. When you’ve made your decision, you will be able to continue the funding process with your chosen lender.
Sales & Advertising Transparency
Lendio’s website provides all the information you need to know about the service, and the salespeople are similarly transparent. Customers do not report incidents in which they were surprised by fees or other unexpected policies. Just remember that your terms will depend on the lender you’re ultimately paired with.
Customer Service & Technical Support
Customer support is available by phone or email.
When you apply for the service, you are assigned a funding manager who is your single point of contact. Your funding manager will bring you offers, help decide which options are best for your business, educate you on the loan products, and generally be available if you have any questions.
It’s worth noting that Lendio has a public customer service agreement on their website, which promises customer service standards such as treating the customer with “transparency and respect” and answering questions “in a timely manner.” Although these are not particularly groundbreaking standards, the fact that Lendio publicly posts their agreement means they’re interested in upholding standards and being transparent with customers.
Customers report that the service is proactive, helpful, and transparent. Many like being assigned to a single funding manager who is familiar with their business and situation. However, a few customers say that the service is too heavyhanded when it comes to phone conversations and complain about receiving a lot of calls from funding managers.
Negative Reviews & Complaints
Lendio has a Better Business Bureau file, though the company is not currently accredited. Lendio has racked up a total of five complaints in the past three years and currently has an A+ rating. Here are some issues people have complained about:
- Delays: While still fast compared to traditional lending, Lendio is a bit slower than many of the individual companies it partners with. Some customers also complained about falling through the cracks.
- Hard Credit Inquiries: Some customers complained about receiving hard inquiries on their credit when they were told there would only be soft ones.
- Lots Of Documentation Needed: Some customers had to provide a lot more documentation than they were prepared for.
Positive Reviews & Testimonials
On TrustPilot, Lendio has over 1,213 reviews, with an aggregate rating of 9.5 out of 10. Additionally, the company has a number of longer testimonials on their YouTube page.
Here are some of the things people like about Lendio:
- Customer Service: Users found Lendio’s customer service to be helpful and responsive in most cases.
- Easy To Use: Many customers found the centralized platform and its interface easy to work with.
- Fast: While a little slower than some other alternative options, the process is still pretty quick.
We’d like to hear from you, though! Have you tried Lendio? Do you have anything to add to the conversation? Leave a comment below!
Final Verdict
Over the last decade, a huge number of online lenders have cropped up, and many of these lenders have innovated funding in ways that are beneficial to merchants. However, the sheer number of options available means it’s difficult for merchants to find a product suited for their business.
If you’re confused about where to start your search for funding or don’t have the time to fill out individual applications, Lendio may be an excellent resource for your business. This company (and others like it) provides a much-needed service. If, however, you already have a good working relationship with a lender you like, you can probably expedite the process by directly working with that lender.
If you’d prefer to apply to a lender directly, check out our alternative suggestions page.
Chris Motola
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