Article by Myles Leva, Last update at June 27, 2022
Lendio is a peer-to-peer business financing platform that matches borrowers with lenders. Because Lendio is a peer-to-peer platform, they don’t provide loans themselves. Instead, they match customers with one of over 75 business funders including names such as Kabbage, BlueVine, and OnDeck. Lendio is effectively a business funding matchmaker. The idea behind Utah-based Lendio and platforms like it is that the customer has more say when it comes to the loans they take out. This setup provides you with more options while saving you a lot of time.
Because Lendio is a loan marketplace, not a direct lender, the prices offered range greatly. The rates you’ll get depend on:
So, if you’re looking for a simple business term loan, you’ll get worse rates than you would if you pursued an SBA loan. At the same time, you won’t need to meet the same stringent requirements with a term loan as you would with an SBA loan.
Lendio offers base interest rates for all its business loans. The company hosts competitive interest rates on its platform. When it comes to APRs, it is much more difficult to determine an average rate with any real accuracy. Unfortunately, this is common in online business loan marketplaces.
Because Lendio is a business loan marketplace, not a business lender, there are no base APRs. The APRs offered on term loans on Lendio range from 6%-30%. The APRs found in Lendio’s loans also vary widely depending on the type of loan as well as the financials of borrowers. The best APRs and interest rates can be secured through their SBA approved loans, which range from 6.5% to 9%.
When it comes to peer-to-peer loans, there are several important things to keep in mind. Lendio works with the information you provide them to match you with the lender determined to be best for you. The catch is that it is up to you to do your research on the terms set out by whatever lender you’re matched with. The interest rates, terms, and APRs will vary greatly, so you’ll need to do your research.
On the other hand, Lendio’s main use is that it does all the initial research for you. Even if you don’t know anything about loans apart from the type of loan you need, you can use Lendio to narrow down your search to the best options they have for you.
Keep in mind that Lendio is free to try, so it might be worth looking at if you’re looking for business financing options. According to customer reviews, Lendio has a fast and easy application process and their customer service is great.
Lendio is a peer-to-peer business financing platform. It runs on the simple concept of matching borrowers with the best business loans for them. Trying their service is free and any business owner can apply for a loan.
Lendio offers its matchmaking services for a wide array of loans, including SBA loans with great rates. To do so, they work with over 75 lenders. Lendio’s loans are not the easiest to get, as only about 60% of applications are approved. If you’ve been in business for over six months, make at least $10,000 per month in revenue, and have a credit score of at least 550, you are eligible for at least one of their loans.
Lendio doesn’t charge you any money for their services because they make their money from their partner lenders. The fees charged to you, the borrower, are determined by the lender you’re matched with. So, when it comes to your bottom line, you must look at a few factors:
Fixed fees: Many of the lenders listed on Lendio charge a fixed fee instead of interest rates on loans. This is especially true for many of their short-term loans and merchant cash advances. This fee will be represented as a decimal rate instead of a percentage. For example, if you borrow $100,000 at a rate of 1.1, you would owe $110,000 back.
Interest rates: Interest rates listed on Lendio can be quite confusing. Some of them cite daily, weekly, quarterly, or annual interest rates instead of monthly rates. This factor alone can cause quite a bit of confusion, so it’s important to make sure that you’re not making a mistake here.
Prepayment penalties: If you were a lender, wouldn’t you love it if your customers paid you back FASTER? Well, many of Lendio’s partners won’t appreciate you paying your loan back quickly. They’ll want you to have the loan out for longer so they can make more money from you in interest over time.
Inexplicable fees: Some of Lendio’s partners charge fees that are unique. In the end, it’s your responsibility to make sure that the loans you’re looking at come with a cost you’re willing to pay. The benefit of Lendio is that they can find some great options for you and save you a lot of time. On the flip side, they’ll present some strange options to you and it’ll be your job to account for the total expense of any loan.
Lendio is a great resource for finding some great loans. You need to keep a few things in mind when looking at their lending partners, but their service is solid. If you’re thinking about trying their service out, go ahead! It’s free to try.