Online Lending Marketplace Leverages Growth of Local Startup with Unique Approach
FAIRFIELD, Conn., March 12, 2019 /PRNewswire/ — Celebrating six years of success, BitX Funding has once again secured financing for a local entrepreneur who now thrives despite an economy still in recovery. Dylan O’Connor, owner of Floor Coverings International of Greenwich CT credits the “painless and efficient process” of loan application, approval and funding from the online marketplace that serves local, small business by pushing through the borrower bottleneck.
“With very little effort on my end, BitX came to the rescue and plugged me right in,” said O’Connor when describing the ease of process and expedience offered by BitX when he needed additional backing that had reached a dead end with traditional banks. Having been in business less than a year – a hurdle for financing, and needing to tap additional funds, BitX was able to streamline the datapoint review and match him with the perfect lender. BitX Funding acted as a broker for him as they have done for hundreds of small start-ups and franchisees that are small but mighty contributors to the local economy. “The process was super-fast,” said O’Connor, noting a 48-hour transaction.
With a wealth of experience as a non-bank lender within the fintech universe, Todd Rowe, President of BitX Funding has been breaking down barriers through the online marketplace that pairs small-business owners with optimal lenders, pushing through the risk and delivering resources. “My client’s businesses are growing in revenue, but they need the bridge that BitX could provide,” said Rowe, who earned trust, insight and expertise as a lending middleman by navigating numerous clients through the crash of 2008. The focus on small business is particular, and a niche that fills an underwriter gap for banks as well, who tend to focus on larger loans and see clients as a number. Rowe’s process embraces details that are seen as attributes to broker a borrower-lender match. The BitX marketplace offers a diverse group of lenders including but not limited to American Express, On Deck Capital and Lending Club, as their relationships allow for better rates and preventing credit mistakes when going direct. Further anticipating the needs of small business, BitX Funding also offers business insurance (underwritten by Chubb), “A necessary but often extra step toward limiting liability,” according to Rowe.
Since 2013, BitX Funding has generated over $10 million in funding for small businesses nationwide. As an active member and Board Member of the Fairfield Chamber of Commerce, Rowe’s corporate initiatives are also in line with his mission of galvanizing the local Connecticut economy. With BitX Funding he looks forward to continued growth by connecting the community – and small businesses nationwide – with lenders who provide an array of financial products such as SBA, start-up, short-term, mid-term loans and more.
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By Nancy Klaiman Prentice / The Next Write
SOURCE BitX Funding
For Todd Rowe, the road to entrepreneurship began in the residue of the 2008 economic meltdown.
“About four to five years ago, I worked for OnDeck Capital in Manhattan,” said Rowe, referring to a non-bank lender to small businesses, where he was a senior business development manager. “Back in 2008, when we had the market correction, banks stopped lending and small-business owners had nowhere to go to get funds. OnDeck, at the time,
filled that gap.”
“But they only offered one product” for prospective borrowers, he said. “I would see all of this paper that came across my desk that said ‘Denied, Denied, Denied, Denied.’ I said to myself, ‘If we opened up a marketplace where small-business owners needed an SBA loan or a merchant cash advance or a short- or mid-term loan, they’d have one location to come to and we’d work with our funding sources and connect them to the correct business product.’”
In 2013, Rowe in Southport launched BitX Funding as an online marketplace for small-business owners and aspiring entrepreneurs to seek financing for their endeavors.
BitX Funding works with a borrower in fill out data on the company regarding how much money they want to borrow, the time frame they are working in to receive their funds and how long they have been in business. Rowe reviews the information and contacts the applicant to receive more information about the depth and scope of the requested loan. The BitX founder Rowe, who is now working with 20 banks as his company’s financing outlets, determines which applicants have the best chance of moving forward.
“We see a lot of applications,” he said. “We are working with a 20 to 1 ratio — we might see 20 applications, but we are able to fund one.”
BitX has received loan requests ranging from $5,000 to $500,000. “The largest loan we’ve secured was a $300,000 loan for a printing company out in Las Vegas,” he said.
To date, Rowe has secured 100 small-business loans for clients. Applicants do not pay him a fee or a commission for the service, he noted, with his revenue coming from the participating lenders.
“Each funding source has different pay scales” loan middlemen, he said. “We negotiate that upfront. The funding source pays me direct, and it varies between each funding product. An SBA loan can be 1 percent, another product can be higher.”
As a lending middleman, Rowe said, he makes life easier for the banks working with him.
“I’m actually pre-underwriting the applications. Because of Dodd-Frank and all of the other regulations and paying an underwriter a $100,000 salary for a $50,000 loan, it’s not really in their (lending banks’) wheelhouse.”
Rowe said half of his applicants are startups seeking their first cash infusion and the other half are established but still young companies needing additional money to grow. Many would-be borrowers approach lenders with too much confidence in their ability to score financing, with dismal results.
“They think they can go out and request funding with a FICO of 550 or liens and judgments, or with somebody going after them to pay their bills. Once your name gets put into the system, it’s amazing what’s out there on you and how all of these funding sources can grab that data and quickly make a decision on you. Or you can land on a web page with an online lender and answer a couple of questions wrong, get quickly denied and that’s the end of it.”
“With me, I go right to the underwriter and say, ‘Hey, wait a minute, don’t look at the black and white — there is color, and let me show you the color.’” In a loan application.
Rowe is also branching out his service to reach the “entrepreneurial home flipper” who is seeking money to acquire, upgrade and quickly resell residential properties. “I can provide the capital the banks and mortgage companies don’t touch,” he said, adding that it helps if the flipper files as a limited liability company when applying for capital.
BitX Funding is operated by Rowe as a one-man shop. “My goal is to become very large and have private equity and private capital reach out to me and say, ‘We want to take it to the next level,’” he said.