This fall, Robert Gallo plans to open a Saladworks franchise, a made-to-order salad eatery, in his hometown of Ridgewood with a $430,000 loan he received by using BoeFly. He secured a loan with Conestoga Bank in Pennsylvania.
“Without BoeFly and without that support system, I never would have been in touch with the bank in Pennsylvania,” said Gallo, a lawyer and real estate investor.
Launched in March 2010, the online service’s name stands for “business opportunity exchange,” or BOE, combined with “fly,” indicating how quickly deals get made on the platform. To date, $2.7 billion worth of loan activity has flowed through its site, and it has forged an alliance with the International Franchise Association (IFA). More than 100 franchises work with BoeFly.
BoeFly, which sees credit loosening up for small businesses such as franchises, is the brainchild of Chief Executive Officer Robert Tannenhauser and Co-President Michael Rozman. It uses its proprietary “SmartForm” technology to connect small-business borrowers with lenders from among its over 2,200 participating banks, based on the lending profiles provided by borrowers and banks. Loans that are granted are Small Business Administration (SBA) approved or conventional.
“There are companies that are professional brokers that will use some mix of technology, but those are probably meaningfully different because they take a brokering fee,” Rozman said. “Particularly brokers that they don’t have a relationship with, as having a financial incentive to hide blemishes on deals. So by our decision to not be a broker, to not price like a broker, allows us to have an array of lenders that we wouldn’t have otherwise.”
No brokerage fees
While a broker would charge a brokerage fee, 1 percent or more, based on the amount of the loan, BoeFly has a different model. It charges a borrower a one-time fee that ranges from $99 to $499, while banks pay a monthly subscription fee of $55, said Rozman.
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