By Lorelei Stevens
Cape Cod Times, Hyannis, Mass.
WWR Article Summary (tl;dr) “Fundera” has been a critical financial lifeline for many small businesses who need funding. The online marketplace is a matchmaker between business owners and 22 vetted online lenders that offer loan and financing products.
BREWSTER
Things were humming at Snowy Owl Coffee Roasters late Friday afternoon. More than a dozen customers patiently waited for the busy staff to serve up espressos, lattes and iced coffees in the warm cafe, perfumed with the fragrance of freshly roasted and ground coffee beans.
Like many new businesses, however, this one almost did not get off the ground last year after owners Shayna Ferullo and Manuel Ainzuain were turned down by local banks and a community development lender for critically needed financing.
“We had bought our machinery, but the plumbing and electrical work here took more time and money than we expected,” Ferullo said of the post-and-beam barnlike building on Route 6A. “Local banks consider you a startup for seven years, so it’s hard to get money.”
Then she saw that two successful entrepreneur friends had “liked” a Facebook ad for Fundera, an online marketplace for small-business loans. Ferullo applied, received a number of financing offers and closed on a deal to access $30,000.
“I don’t know what we would have done otherwise,” she said.
CEO Jared Hecht started New York City-based Fundera in 2014 after a family member with a profitable business was repeatedly turned down for a bank loan to expand his restaurant chain. When his cousin declined his offer to invest, Hecht tried to help by exploring online lending options.
“I found out it was a very messy world and impossible to navigate, full of payday and predatory lenders,” he said. “I realized if this is a problem for my cousin, it must be a problem for a lot of business owners.”
With extensive experience in social media startups, including GroupMe and Tumblr, Hecht created Fundera.
It is not a lender but rather a matchmaker between business owners and 22 vetted online lenders that offer loan and financing products ranging from business credit cards and lines of credit to equipment loans, Small Business Administration loans and more.
Then Hecht took it a step further.
Fundera loan applicants are paired with account managers who walk them through their offers and then follow up to provide guidance on future financing needs.
Ferullo worked closely with account manager Annie Harvey before accepting offers from two major companies for business credit cards that charged no interest for the first year.
“It bought us some time,” Ferullo said. “Fundera did an outstanding job with customer service. It is a very personal relationship. They even order coffee from us.”
Mike Merfeld told a similar story. In February 2014, he and his partner, Christian Sann, co-founded 2 Dogs Treats, a Boston company that cooks, packages and sells single-ingredient, human-grade treats for dogs.
With growing demand at farmers markets and through their 2dogstreats.com website, the partners quickly doubled their wholesale customer base from 45 to 90. They currently employ four to five people who produce about 2,500 retail sale units per month.
Looking for cash flow flexibility to cover raw material expenses and support their company’s growth, they applied for financing through Fundera.
“The nice thing was it helped us to look at a couple of options at once, and they gave us a range of options to consider,” Merfeld said. “And we had a really good account manager who helped us analyze the options, go through the terms and understand the implications.”
This advice from “loan specialists” is unbiased and free to borrowers, according to Hecht. Fundera makes its money from standardized fees it charges lenders once deals close.
“The fees do not influence Fundera to point a customer to one lender or another,” he said.
The application process is simpler and faster than it is with traditional banks and, unlike other loan aggregators such as LendingTree.com, Fundera does not sell applicants information to lenders, he said.
To date, Fundera has coordinated loans for 4,000 small businesses in all 50 states valued at $200 million.
Because they got funding to launch Snowy Owl Coffee Roasters, which is now also wholesaling beans, Ferullo and Ainzuain have a solid year of business and business credit under their belts, including a Dun & Bradstreet number that future lenders can reference to gauge their creditworthiness.
