Press
Biz2Credit Reaches $1 Billion in Financing Deals
Recession Helped Spur Online Growth of Small Business Lending
NEW YORK, NY (August 28, 2013) — In less than five years as an online platform, Biz2Credit, the #1 credit resource for small companies, has now surpassed $1 billion in small business funding deals. Biz2Credit, which was founded in 2007 and took its web-based matching capabilities online a year later, has nearly doubled its loan-making in the past 12 months.
Biz2Credit was co-founded by Rohit Arora and his brother, Ramit Arora, at first as a company to help immigrants from South Asia to navigate the small business financing process in the U.S. Foreign-born entrepreneurs are often intimidated by language barriers, cultural differences in attitude toward borrowing money, and the volume of paperwork required in the loan application process.
The Arora brothers initially set out to aid members of their community by standardizing, simplifying and streamlining applications digitally and by quickly establishing relationships with financial institutions that were looking to lend money to startups and growing businesses. Awareness about Biz2Credit spread through word-of-mouth recommendations and an aggressive public relations campaign.
Starting with a handful of immigrant friendly lenders, the Biz2Credit lender network now includes more than 1,200 big banks, small banks, credit unions, microlenders, and alternative lenders (factors, cash advance companies and others).
Ironically, it was the Great Recession that helped Biz2Credit grow beyond the immigrant community. Lenders made it more difficult to secure capital, while borrowers often were rejected for loans by their own banks. This turn of events caused mainstream businesses to search online for funding when they might not have otherwise done so.
“The days of free flowing loans to small businesses ended once Lehman Brothers collapsed. Even banks with which small business owners had long-standing deposit relationships turned off the spigot, and entrepreneurs had to look elsewhere for funding,” said Rohit Arora, CEO of Biz2Credit, now one of the country’s top experts on small business lending. “Ironically, it was financial institutions’ unwillingness to lend that helped spur the use of the Internet for small business loans.”
Arora, who analyzed bank lending portfolios with Deloitte, knew that small business lending was highly profitable, particularly when the housing market tanked. As the credit market tightened, deals were increasingly being done with alternative lenders, credit unions and small banks, rather than with big banks. Use of the internet helped eliminate geographical barriers and opened possibilities for small business owners to secure funding from lenders they had never heard of in places they’d never thought to contact.
“Technology really leveled the playing field, and it was surprising that the banking industry was slower to adapt than retail. Still today there are large lenders who do not offer online small business loan registration,” Arora added. “However, big banks that saw smaller competitors gain market share during the recession, are now investing more heavily in technology and have steadily been increasing their loan approval rates as the economy has rebounded.”
In 2011, Biz2Credit created its widely reported monthly Biz2Credit Small Business Lending Index, which tracks loan approval rates at big banks, small banks, credit unions, and alternative lenders on a monthly basis. It analyzes loan requests ranging from $25,000 to $3 million from companies in business more than two years with an average credit score above 680. Unlike other surveys, the results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit’s online lending platform, which connects business borrowers with more than 1,200 lenders nationwide.
About Biz2Credit
Founded in 2007, Biz2Credit Business Loans is a leading credit marketplace connecting small- and medium-sized businesses with lenders, service providers, and complementary business tools. Using the latest technology, Biz2Credit matches borrowers to financial institutions based on each business’s unique profile — completed in less than four minutes — in a safe, efficient, price-transparent environment. Biz2Credit’s network consists of 1.6 million users, 1,200 lenders, credit rating agencies such as D&B and Equifax, and small business service providers including CPAs and lawyers.
Having arranged more than $1 billion in funding throughout the U.S., Biz2Credit is widely recognized as the #1 online credit resource for small business loans, lines of credit, equipment loans, working capital and other funding options. Visit www.biz2credit.com, follow on Twitter @Biz2Credit, and on Facebook at www.facebook.com/biz2credit.