Storm restoration companies occupy a fairly unique place in the business world. They’re absolutely essential components of the societal infrastructure, enabling storm ravaged communities to turn the tide and begin the process of recovery.
Yet at the same time, they often find themselves in precarious financial positions. That’s because it’s common for them to exhaust most or all of their working capital responding to a disaster. They then have to wait 90 to 120 days before being paid for their hard work.
As such, it’s not surprising that many turn to companies like Lendio that promise to hook them up with affordable bridge financing. But is Lendio really the answer these companies are looking for?
What is Lendio and What Does it Offer?
Like Nav and similar companies, Lendio doesn’t actually originate loans or other types of financing. They’re a marketplace for financial information. They have selected up to 70 different lending institutions they believe provide the best financing options for storm restoration and other companies.
You then go to their site, register, enter your company information, and they return a list of the lending partners they believe are the best match for you.
Through Lendio, a storm restoration company can access information on:
- Short-term loans or line of credit
- SBA loans
- Equipment financing
- Merchant cash advances
- And more...
What Lendio doesn’t offer is invoice financing. And that’s what most storm restoration companies typically need. They have outstanding invoices with AAA credit rated utilities and need to be paid for the work they already performed.
Because of this, many end up choosing expensive loans instead, one that requires them to commit to daily, weekly or monthly payments. This is the very definition of “counterproductive.”
Lendio Qualification Requirements
Because Lendio doesn’t actually lend money, there are no strict requirements for opening an account and trying to secure financing. The lending institutions they work with, however, will definitely have requirements. So you may breeze through the Lendio account setup process and then discover none of their lenders are willing to lend to you.
In order to stave off the possibility of companies getting shut out, Lendio does recommend that potential borrowers meet these qualifications:
- That your company must be in existence for at least 6 months.
- That you have revenue of at least $10,000 per month.
- And that you have a personal credit score of at least 550.
Again, these are suggestions not requirements. If you ignore these suggestions, however, you stand a pretty good chance of coming up empty. Or only finding lenders interested in charging outrageous rates. But it’s up to you.
“Some people dream of success, while other people get up every morning and make it happen.”
— Wayne Huizenga, owner Miami Dolphins
Storm restoration companies often have large outstanding invoices with utilities. If those invoices were paid in a timely fashion most wouldn’t have any cash flow issues. But trying to get a utility to pay off an invoice in less than 90 to 120 days is little more than a pipe dream.
It’s understandable then that many of these companies seek short-term bridge funding that enables them to meet payroll, perform equipment maintenance, and perhaps pay off subcontractors. Most would benefit greatly from working with Payost Invoice Financing instead. But for those that want to see what Lendio has to offer all that’s needed is to open an account.
How Does Lendio Work?
Lendio works by putting you in touch with lenders and their relevant financial products. To access this information, you must first open an account. This typically takes just a few minutes. Once you’ve opened an account, they’ll ask you to fill out an application detailing your:
- Company name
- Length of time in business
- Annual revenue
- Number of employees
- Your credit score and more…
They then perform a credit check on you after which they provide a list of their lending partners willing to work with you. They also suggest various financing products they’re willing to offer. Don’t expect immediate results though. That list of lenders and financing options may not be available for 72 hours or more.
Reviewing Lendio is a matter of reviewing the relevance of their service to your company. There’s no doubt Lendio is able to put companies in touch with business lenders and this might be a valuable thing for certain businesses. But the idea of borrowing money, when you have plenty of potential income tied up in unpaid invoices, isn’t an attractive option. That said, here’s a quick overview of the pros and cons of the Lendio service.
Lendio Pros and Cons
- Setting up an account is relatively easy.
- Lendio can save you time searching for business funding.
- The lenders they work with are generally considered reputable.
- The qualifications aren’t as strict as some other similar services.
- It might take 3 days or more to get a list of lenders.
- They don’t offer invoice financing.
- In spite of their marketing claims, they sometimes conduct hard inquiries on your credit.
- Some of the matches they provide are dead ends.
- Customer service isn’t their strong suit.
Now let’s compare Lendio to Payost.
Lendio vs. Payost Comparison
As we’ve mentioned, Lendio is a hub for business loan information. They don’t actually provide financing themselves and so they don’t actually promise you anything. What they do is give you a list of business lenders that may (or may not) work with you.
But the whole notion of having to secure high-interest, short-term loans when you have plenty of income due in the form of outstanding invoices isn’t such a great one to begin with.
What you need is someone to pay off those invoices so you can get on with things. That’s what Payost is for. Payost was started to provide storm restoration companies with a vehicle for stabilizing their cash flow without having to do a deep dive into debt.
Payost Invoice Financing works like this:
- You get fast approval of qualifying invoices.
- You get same day payment deposited in your bank account.
- We don’t lend you money. We pay you for the work you performed.
- When the utility pays the invoice, you redirect that payment to us plus a modest fee for our service.
With Payost you get the capital you need now to meet payroll, maintain equipment, pay off subcontractor,s and prepare for the next job. There is:
- No credit check of any kind performed on you.
- No personal guarantee required and no demands you put up collateral.
- No daily, weekly or monthly payments.
And unlike an invoice factoring company, we don’t buy your invoice. This way, the utility never learns you needed assistance.
Bottom Line: Should you try Payost?
There are some companies and some situations that may call for a small business loan. But they’re not always the right solution. In fact, if you own a storm restoration company and have outstanding invoices with utility companies you would be better off steering clear of Lendio and loans in general.
Instead, opt for the convenient debt-free option: Payost Invoice Financing. We’re the preferred choice over:
- Bank loans
- Invoice factoring
- A line of credit
- Credit cards
- And other forms of advance funding
Stop running your business on borrowed money and get back to common sense sustainability with Payost Invoice Financing!