A Review of Lendio
Our Lendio review can help you decide on the best lender for your business.
Lendio is an online lending company in the online space. Lendio acts as a go-between for borrowers and lenders, to provide small business loans. Loan types include business lines of credit, SBA loans, term loans, MCAs, equipment financing, and accounts receivable financing. We look at the specifics and drill down into the details.
Lendio is located online here: https://www.lendio.com/. Their physical address is:
10235 South Jordan Gateway
South Jordan, UT 84095
You can call them at: (855) 853-6346. Their contact page is here: https://www.lendio.com/contact/.
Requirements for All Funding Types
Lendio will check your company’s time in business. They also want to see your personal credit score and your monthly sales. Funding is in as little as 24 hours.
Business Lines of Credit
Loan Amounts run from $1,000 – 500,000. Lendio’s loan term has a 1-2 year maturity date. Their payment frequency is monthly. The time to funds is 1 – 4 weeks.
The rate ranges from 8% – 24% interest.
Loan Amounts run from $50,000 – 5 million. Lendio’s loan terms are 10-25 Years. Their payment frequency is monthly. The time to funds is 30 – 90 days.
Their interest rate is over the prime rate of interest.
Short Term Loans
Loan Amounts run from $2,500 – 500,000. Their loan terms are 1 – 3 Years. Their payment frequency can be daily, weekly, or bi-monthly. The time to funds is 1 – 4 weeks.
Their interest rates run from 8% – 13%.
Business Term Loans
Loan Amounts run from $5,000 – 2 million. Their loan Terms are 1 – 5 Years. Their payment frequency can be weekly, bi-monthly, or monthly. The time to funds 1 day to 4 weeks.
Their rate runs from 6% – 30%.
Loan Amounts run from $ 5,000 – 200,000. Their loan Terms are 3 – 24 Months. Their payment frequency can be daily, weekly, or monthly. The time to funds is 24hrs – a week.
Their rate runs from 18% – 40% or more in interest.
Loan Amounts run from $ 5,000 – 5 million. Their loan Terms are 1 – 5 Years. Their payment frequency is monthly. The time to funds is as little as 24 hours.
Their interest rates run from 7.5% – 45%.
Accounts Receivable Financing
Loan amounts are available up to 90% of A/R. Their loan terms are 1 – 3 Years. You can get funding in as little as 48 hours.
Their Factor Rate is 5% and up.
Advantages include flexible payment frequencies and several loan options are available. Some maximum amounts are rather high.
Disadvantages are that it is a fairly long time before you can get your funds. Other players in the online lending space are a lot faster. Plus some rates are very high.
Takeaways from the Lendio Review
Lendio does not seem to be a good place to go if you are in a hurry to get funding. But if you need a great deal of funding ($1 million or more), then Lendio is a possible choice. And a delay in getting that much money should be reasonable and downright expected.
Interest rates max out rather high. A business borrowing $5 million via equipment financing could be looking at a 45% interest rate. That’s over $2 million without compounding!
The Best Businesses to Work With Lendio
Businesses doing best with Lendio are the ones needing a great deal of funding and that are willing to wait for it. Also, they are confident they can pay their debts back on time if not early. Otherwise, there are other lenders online which will provide funds more quickly and many of those charge lower rates.
And finally, as with every other lending program, whether online or offline, remember to read the fine print and do the math.
Go over the details carefully, and decide if this option will be good for you and your company. In addition, always consider alternative financing options that go beyond lending, including building business credit. So this is in order to best decide how to get the money you need to help your business grow.
Building Business Credit
You may find you don’t need Lendio after all if you build business credit. Here’s how.
Establishing business credit is a process, and it does not happen automatically. A corporation needs to actively work to develop business credit. However, it can be done readily and quickly, and it is much faster than establishing personal credit scores. Merchants are a big aspect of this process.
Accomplishing the steps out of order will result in repetitive denials. No one can start at the top with small business credit. For example, you can’t start with store or cash credit from your bank. If you do you’ll get a rejection 100% of the time.
A business must be respectable to lending institutions and vendors. Hence, a business will need a professional-looking website and email address, with site hosting from a supplier such as GoDaddy. In addition company phone and fax numbers should have a listing on 411.com.
In addition the business phone number should be toll-free (800 exchange or similar).
A small business will also need a bank account dedicated purely to it, and it must have all of the licenses essential for operation. These licenses all have to be in the accurate, accurate name of the small business, with the same company address and telephone numbers. Note that this means not just state licenses, but possibly also city licenses.
Dealing with the IRS
Visit the IRS web site and obtain an EIN for the company. They’re free. Pick a business entity such as corporation, LLC, etc. A business can start off as a sole proprietor but will probably want to change to a variety of corporation or partnership to decrease risk and make the most of tax benefits.
A business entity will matter when it involves tax obligations and liability in the event of a lawsuit. A sole proprietorship means the business owner is it when it comes to liability and taxes. Nobody else is responsible.
If you operate a corporation as a sole proprietor at least file for a DBA (‘doing business as’) status. If you do not, then your personal name is the same as the corporate name. Because of this, you can wind up being personally accountable for all corporate debts.
In addition, per the IRS, using this structure there is a 1 in 7 probability of an IRS audit. There is a 1 in 50 chance for corporations! Prevent confusion and dramatically decrease the odds of an IRS audit as well.
Setting off the Business Credit Reporting Process
Start at the D&B web site and get a free DUNS number. A DUNS number is how D&B gets a business into their system, to produce a PAYDEX score. If there is no DUNS number, then there is no record and no PAYDEX score.
Once in D&B’s system, search Equifax and Experian’s web sites for the business. You can do this at https://www.creditsuite.com/reports/. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process. In this manner, Experian and Equifax will have activity to report on.
First you ought to establish trade lines that report. This is also referred to as vendor accounts. Then you’ll have an established credit profile, and you’ll get a business credit score.
And with an established business credit profile and score you can begin obtaining revolving store and cash credit.
These kinds of accounts tend to be for the things bought all the time, like coffee, shipping boxes, outdoor work wear, ink and toner, and office furniture.
But first of all, what is trade credit? These trade lines are credit issuers who will give you starter credit when you have none now. Terms are commonly Net 30, instead of revolving.
So if you get an approval for $1,000 in vendor credit and use all of it, you will need to pay that money back in a set term, like within 30 days on a Net 30 account.
Net 30 accounts have to be paid in full within 30 days. 60 accounts must be paid completely within 60 days. Unlike with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you used.
To begin your business credit profile properly, you ought to get approval for vendor accounts that report to the business credit reporting bureaus. As soon as that’s done, you can then make use of the credit.
Then repay what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.
Not every vendor can help in the same way true starter credit can. These are vendors that will grant an approval with hardly any effort. You also need them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.
ut you may need to apply more than once to these vendors, and you may have to buy some things you do not need to have, to verify you are reliable and will pay punctually.
Consider donating unwanted items to charitable organizations.
Revolving Store Credit
Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, progress to revolving store credit. These are companies which include Office Depot and Staples. These companies are more likely to have supplies you need.
Use the corporation’s EIN on these credit applications.
One example is Lowe’s. They report to D&B, Equifax and Business Experian. They want to see a DUNS and a PAYDEX score of 78 or higher.
Are there 8 to 10 accounts reporting? Then move to fleet credit. These are service providers such as BP and Conoco. Use this credit to buy, fix, and take care of vehicles. Make certain to apply using the corporation’s EIN.
Have you been responsibly handling the credit you’ve up to this point? Then progress to cash credit. These are businesses like Visa and MasterCard. Keep your SSN off these applications; use your EIN instead.
These are companies such as Walmart and Dell, and also Home Depot, BP, and Racetrac. These are normally MasterCard credit cards. If you have 14 trade accounts reporting, then these are doable.
Monitor Your Business Credit
Know what is happening with your credit. Make certain it is being reported and deal with any mistakes ASAP. Get in the practice of checking credit reports and digging into the details, and not just the scores.
We can help you monitor business credit at Experian and D&B for 90% less than it would cost you at the CRAs. See: https://www.creditsuite.com/business-credit-monitoring. Update the information if there are inaccuracies or the details is incomplete.
So, what’s all this monitoring for? It’s to dispute any problems in your records. Mistakes in your credit report(s) can be fixed. But the CRAs usually want you to dispute in a particular way.
Disputing credit report inaccuracies generally means you mail a paper letter with duplicates of any proofs of payment with it. These are documents like receipts and cancelled checks. Never mail the original copies. Always mail copies and retain the original copies.
Disputing credit report inaccuracies also means you specifically itemize any charges you challenge. Make your dispute letter as crystal clear as possible. Be specific about the concerns with your report. Use certified mail so that you will have proof that you mailed in your dispute.
A Word about Business Credit Building
Always use credit sensibly! Never borrow more than what you can pay back. Monitor balances and deadlines for payments. Paying off on schedule and in full will do more to raise business credit scores than just about anything else.
Establishing corporate credit pays. Great business credit scores help a company get loans. Your lending institution knows the business can pay its financial obligations. They recognize the business is for real. The small business’s EIN attaches to high scores, and loan providers won’t feel the need to demand a personal guarantee.
Business credit is an asset which can help your business in years to come.