$5 Million in Lending Available to Small BusinessesBy Amanda Lewan on June 24th, 2016 /
Able Lending, a fintech startup headquartered in Austin, has announced $5 million dollars in funding available to Michigan based startups and small businesses.
The company is the lowest-cost non-bank lender to small businesses in the US, using a new collaborative loan structure. The funding will aim to help an estimated 20 Michigan-based companies across a range of industries from food to tech or retail. The main requirement is that the small business has been operating for at least six months and has at least $50,000 in revenue. Owners should have a personal credit score of at least 600.
“A great thing about Able is that we can lend to a much broader group of industries compared to a traditional bank won’t lend to,” said Evan Baehr, President and Cofounder. “We’re looking to fund coffee shops who want to open additional locations, craft brewers and restaurants who can’t keep up with demand, tech companies who are looking to scale, and local packed food, apparel and accessory makers.”
The fintech company is aiming to change the way businesses get loans. They chose to make funding available specifically in Michigan because of the growth in entrepreneurship in recent years. Able is also partnered with The Michigan Small Business Development Center, and area incubators like Start Garden in Grand Rapids. They are also partnering with area organizations to help offer training and assistance for entrepreneurs seeking capital.
Able’s approach is described as a “new kind of loan” they say. With 8 out of 10 small businesses unable to qualify for a bank loan, they see a gap in the market and a way to foster great economic growth.
“Whether it’s because the business has a short track record, too little revenues, or operates in an industry the bank can’t lend to, etc,” said Baehr.
Able’s mission is to focus on funding these small businesses typically unable to receive mainstream funding. They have a collaborative loan that lets borrowers get more capital at a lower rate when they recruit support from friends, family or fans they call backers. They aren’t equity holders in the business, but providing lending along side Able’s loan. Typically, borrowers find 2-3 Backers to fund about 25% of the loan, and Able matches the rest. They also provide all the legal documents and service for the loan.
“The Flint office of The Michigan Small Business Development Center (MI-SBDC) is honored to sponsor a visit by Able to inspire our innovators and entrepreneurs. And we are humbled by their commitment to provide more opportunities for Flint businesses by dedicating $5 million in low-cost loans. This is a heartfelt example of entrepreneurs helping entrepreneurs. MI-SBDC is proud to partner with Able Lending and serve and assist entrepreneurs on their journey to business growth,” said Marsha Lyttle, Regional Director for MI-SBDC.
Able is a platform that lends up to $1 million to businesses at any stage. For pre-revenue businesses, “Able Start” lets entrepreneurs use the Able platform to create any loan product, at any rate, with any repayment schedule. Learn more about them here: ablelending.