Every now and then, a company comes along and attempts to successfully fill-in a service gap that has escaped the notice of others in the business. New York based BoeFly — an online marketplace that primarily brings lenders and borrowers together — wants to do just that. No more wasting time filling out redundant paperwork for every loaner in town in search of an approval from one. No piles of applications to review on lenders desks only to have to reject a majority.
BoeFly envisions an interconnected commercial transaction world that is efficient and simple. By bringing the parties involved together and the process online — at boefly.com — not only does it aim to streamline such transactions, it also hopes to, at the same time, expand the reach of member businesses and individuals. The company, which was founded by small business lending experts, also allows lenders to sell their loans (including problem loans) to investors.
Built-in technology simplifies process
The BoeFly website has a built in technology that matches participants from all sides based on information they provide. “Potential borrowers or their loan brokers need only to complete a single form — BoeFly’s proprietary SmartForm — that contains virtually all of the information that lenders require,” according to Robert Tannenhauser — President of the company.
The information on the SmartForm is fed directly into the BoeFly deal management system where it is scored for compatibility. Lenders are then presented with loan applicants that match their criteria. “The system eliminates much of the legwork and expense associated with originating and processing loan requests, and increases the chances of a completing a successful transaction.”
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Once the lender and borrower connect and are ready to make a deal, “they can tap into the BoeFly network of professional service providers such as lawyers, appraisers and environmental engineers [and others],” said Tannenhauser. The BoeFly idea is to bring everything needed to close a deal under the website’s umbrella.
Potentially vast benefits
The company hopes to benefit all parties that are involved in commercial transactions. Whether it is to expand their businesses, open a franchise or purchase a commercial real estate, individuals seeking loans can connect to independent, community and national bank lenders through BoeFly, according to Tannenhauser. In addition, “Investors seeking to buy loan portfolios, problem loans or the government guaranteed portion of SBA or USDA loans can also turn to BoeFly’s transparent marketplace to find the deals they seek,” he said.
The alternative to BoeFly “is the way lending has always been done: a paperwork-intensive process that is by its nature inefficient and time-intensive,” argues Tannenhauser. With his lenders don’t spend an extensive amount of time reviewing long loan application from potential borrowers. The matching service does the work for them. As for borrowers, “with a single SmartForm loan package, BoeFly connects them only with lenders who are interested [in doing business with them] saving them the time and effort of submitting their application to lenders who are not [not interested in acquiring them as clients,” he said.
In addition, brokers can use online tools powered by the company to manage requests from their clients. The secondary loan market functions in a similar fashion where “a centralized marketplace for loan sales makes it easy for sellers and investors to connect,” said Tannenhauser.
How it works
The services BoeFly provides are subscription based. “[Our fee] is a fraction of the cost of doing just one deal,” said Tannenhauser. It doesn’t seek any commissions. The company was just recently launched after completing a several month long test period. “[During the beta phase] several hundred commercial lenders, loan brokers and secondary market buyers have posted and/or completed over $700 million in transactions,” said Tannenhauser.
The road ahead
Browsing through BoeFly, one can’t help but notice the quotes from happy customers peppered throughout the website. “I regularly review the secure site for deals fitting our credit box. I believe BoeFly helps solve the dislocation in the business loan market today,” says Lex Lane, a National Sales Manager for Franchise Finance at Main Street Bank. Greg Poehlmann, 44 Business Capital’s President, touts the company for making his loans available to potential clients and for saving him a lot of time. Even after “I select the winning bid, BoeFly handles the settlement work for me, letting me concentrate on my business.”
This is good and well. The company’s success depends on attracting a good bit of diverse participants that are crucial to completing commercial transactions. One missing link could break what is undoubtedly a good idea. Now that it has officially launched its website, only time will determine if it has the staying power web-based service companies such as the once tiny eBay have shown. In the mean time, the company already has plans to expand its services. “In the future, BoeFly will also provide a marketplace for commercial real estate as well as businesses for sale,” said Tannenhauser.