Cato Pastoll, CEO of Lending Loop, is working through his online platform to improve access to financing for all entrepreneurs by connecting small businesses seeking capital with Canadians who want to lend money to small businesses.This article is part of The Globe and Mail’s Small Business Borrowing Guide series, which will run weekly on The Globe’s Entrepreneurship page for the next five weeks.
Lending Loop is an online platform that connects small businesses seeking capital with Canadians who want to lend money to small businesses. Lending Loop is not a toron – rather, it facilitates the process. “What’s interesting about our model is we don’t make any more money off the higher interest rate,” unlike other alternative lenders, Mr. Pastoll says. “We’re really trying to find the rate that best suits the business that’s applying, and on average it’s in the low teens, so about 10 [per cent] to 13 per cent.”
Lending Loop says it takes five minutes to complete their online loan application, containing questions about the business and its performance. Mr. Zakharia says in his experience it typically takes about two to four days to go from a completed application to a loan offer. If the business owner accepts the offer, it goes to Lending Loop’s online marketplace for 30 days, with a possible 15-day extension.
For borrowers, the process can take five to 10 days, Mr. Zakharia says. “But on the high end, you’re waiting 45 days.”Mr. Pastoll says the average funding time is eight days. Loans under $50,000 have an average funding time of 3½ days. Since the company started, Mr. Pastoll says less than 2.5 per cent of loans have not been fully funded after 45 days. So far this year, that number is less than 1 per cent.
GlobeSmallBiz Always a little concerning about statements of finding the best interest for certain businesses and how someone wishes to 'educate' others about lending money. Fees are always justified as the service is provided but adjustable interest rates and educating seems not sincere. ...