Bankmybiz extends from matchmaking into making loans

Michael Adam doesn’t just lend to small business owners — he is one.

Adam, who spent a decade as a commercial lender, is getting back to his roots as a lender as CEO of the Milwaukee-based company The website started in 2013 as a way to connect small business owners to lenders across the country, but Bankmybiz has now partnered with Brookfield’s Advantage Leasing Corp. to lend to companies directly.

And unlike other online lenders, Adam says, Bankmybiz doesn’t charge “ridiculously high” interest rates.

“We are still small business owner advocates, and we understand that getting access to money helps things grow,” Adam said.

With its shift to direct lending, Bankmybiz has joined a growing market of online lenders, which include Kabbage, Prosper and the Google Ventures-backed OnDeck Capital. But there’s plenty of room for Bankmybiz to grow, said Bob Coleman, editor of the Coleman Report newsletter, which tracks small business loans.

“The market is exploding, and we are not in a situation where we are in a bubble for small business lending,” Coleman said. “So the opportunity for those types of businesses can be very attractive.”

Online lending companies have “filled a niche in the marketplace,” Coleman said, loaning to businesses that might get denied from most traditional loans for various reasons.

Yet some of those companies charge unusually high rates, Adam said, pointing to several companies having average annual interest rates of more than 40 percent or a report of OnDeck charging up to 134 percent for a loan. Bankmybiz’s rates, meanwhile, are about 10 to 15 percent.

That’s a bit higher than banks generally charge, but the turnaround is “a lot faster” and with less red tape, Adam said, with businesses typically finding out whether they’re approved in about a day and getting the money in two days.

That means that if a company sees a piece of equipment on sale, they can get a loan to buy it right away.

“[If they have a bank], their bank is not going to be able to react quick enough to do that. … We’re able to work with them on that single piece, to get them what they need quickly,” Adam said.

The key to keeping Bankmybiz’s interest rates low lies in being picky about which companies to lend to, giving out loans only to those with decent credit scores and with an established revenue model, Adam said. The loans will range between $5,000 to $250,000.

But Bankmybiz will help those that get denied for being too risky to find a way to get their money, continuing its “matchmaker” role in small business lending. The Bankmybiz website helped businesses get more than $6 million in loans before the company started lending to businesses directly, Adam said.

The shift to direct lending was a “natural progression” for Adam, who said he was often frustrated as a commercial lender by how difficult it was to find potential businesses to lend to or by turning some down because they were “growing too fast” to get another loan.

Bankmybiz screens loan applicants and sends possible companies to Advantage Leasing Corp., which handles the underwriting process, said Advantage’s president, Mike Elton. The equipment financing and leasing company has been around since 1992.

Advantage first got involved with Bankmybiz when it offered itself as a lender on the website. But both companies “hit it off” and decided to partner on online direct lending, giving Advantage a chance to get into the financial technology space.

“We’re really early in the game, but we’re happy with the amount of activity, the number of applications we’ve reviewed,” Elton said.

Bankmybiz, meanwhile, is developing a program for banks to participate in some of the Bankmybiz loans. And it’s continuing with a marketing campaign to reach business owners across the country, touting its quick application process and other advantages.

“Our mission is to make business loans easy, and it takes less than five minutes to apply,” Adam said. “Even if you’re just looking around … it never hurts to have another offer, another answer.”

— By Polo Rocha