Helping Businesses and Banks Hook Up

Shalinder Kular and his partners own around two dozen gas stations and 15 Subway franchises in Indiana employing more than 100 people. During the financial crisis their Indianapolis company, Hoosier Pete, couldn’t get credit from its regular bank. So Kular, a former accountant at Ernst & Young, turned to Biz2Credit, an online marketplace that matches small businesses with lenders. Since 2009 the New York City-based startup has helped Kular’s outfit land more than $4 million in commercial loans at what he calls “very nominal” interest rates from Borrego Springs Bank, headquartered near San Diego, more than 2,000 miles away.

Biz2Credit is one of a new crop of matchmaker sites that also includes BoeFly, CNF Exchange, and Lendio. The middlemen aren’t lenders and don’t act like traditional loan brokers, who tend to specialize in a single industry. Instead, the sites analyze would-be borrowers’ financial data to assess risk, then funnel their assessments to banks, credit unions, and alternative lenders. The amounts requested generally range from a few thousand dollars to a few million. While the firms make no guarantees a deal will close, they trumpet approval rates of 70 percent to 80 percent, along with the ability to slash the time it takes to process a bank loan from months to weeks. Executives at the four sites say they expect to complete a total of more than $1.5 billion in lending this year, double the amount they handled in 2011.