Entrepreneurs often struggle to find investors who believe in their ideas; they may also get the boot from their usual banks because they do not match lending requirements. Moreover, in the current economic landscape, prospects for lending are gloomier than they used to be.
Enter BoeFly. This online venture, funded in 2010, is well on its way to becoming the solution to the funding issue faced by many. Labeled by some as the Match.com of small business funding, BoeFly has over 1,300 members, including around 1,000 banks and private investors. The company “matches” lenders to qualified applicants, using some principles very similar to those of the online dating world. Indeed, applicants fill out a loan application, which is in turn reviewed by potential lenders. Banks, on the other hand, are able to enter criteria they are looking for, like loan location or amount. The two sides are then paired based on what they stated, and investors may bid for the loans they are interested in. Amounts vary from $25,000 to $2,000,000, and BoeFly reported over $1 billion in loans since its origination last year.
The advantage of this approach is that it allows loan seekers to get their application in front of as many lenders as possible, hence increasing chances of funding. Indeed, the website allows applicants to purchase loan packages, in order to prepare information to be presented to lenders. Several lenders are able to view each application, while applicants have to prepare only one package (compared to the different loan applications they have to fill out when looking for traditional funding).
BoeFly is hence killing several birds with one stone: helping entrepreneurs get access to funds, allowing lenders to find adequate investments, and creating jobs. The company posts around $150,000 in monthly revenue, and should become profitable in 2012.
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