Small Business Customer Success Stories
At Lending Club, we love to support our small business customers and are proud to see them succeed. In that spirit, we want to share three customer success stories that make us smile.
Daniel Lieberman founded BitPusher in 1999 after feeling limited by what he could do as an employee within a corporation. His San Francisco-based small business provides IT operations consulting to companies that offer web-facing or mobile services. BitPusher’s growth had been impressive over the years but Daniel knew that if he wanted to expand further he was going to have to make some large investments – and would need financing to do it. That’s when Daniel turned to LendingClub. Daniel applied online for a small business loan through LendingClub and was quickly approved for the funding he would need to take BitPusher to the next level.
Daniel plans to use a portion of the small business loan to build out the company’s content strategy. The other portion of the loan will be used as working capital. Having the funds to better manage their cash flow will allow BitPusher to pursue larger clients that typically require 30 or 60 day net terms. While these larger clients are extremely valuable, BitPusher may not have been able to pursue them without the small business loan through LendingClub.
Originally, Daniel had considered going to a bank branch for financing but despite his business having excellent credit, he wasn’t approved for the full amount that he needed. He also knew there were other potential sources, “There’s credit cards but that’s not the right way to do financing,” referring to the typically high APRs charged by credit card companies. “With interest rates low, there’s this whole industry of what I think of as the consumer credit of the small business world where the rates are just crazy expensive…there isn’t a whole lot in the middle.” LendingClub helped fill this gap for Daniel and has for millions of other people.
As an experienced small business owner, Daniel has some advice for those just starting out.
“Avoid making expensive mistakes…and you will make expensive mistakes.” It’s good for all the entrepreneurs out there to know that you’re not alone, everyone makes mistakes!
Additionally, “At the end of the day, companies die when they run out of money. On the one hand, you want to be bold, you want to be out there doing great things…but if you don’t have someone you can go to to write a check when you need more money…a big piece of what you need to do is risk management about cash flow.” On the other hand, you’re always going to have to take risks in order to grow but “one of the biggest risks is dying by attrition.” Don’t let a lack of cash keep you from innovating and finding the next big opportunity for your company.
Daniel recommends each small business owner understand the unique risks specific to their company’s cash flow. How dependent is your small business on checks coming in on time? How dependent are you on just one or two customers? To help manage risk, no one customer should make up a large portion of your revenue. By diversifying your customer base, you also lessen the chance that your company warps around the needs of just one or two customers.
“You really need to understand what your cash situation is,” Daniel also suggests that companies have a way to bail themselves out – companies can die by not having enough cash on hand, even if it’s just for a day. To help stay prepared for the unexpected, BitPusher also has a line of credit through LendingClub in addition to the small business loan.
At LendingClub, we’re proud to support small business owners like Daniel and his company, BitPusher, LLC. If you’re a small business owner looking to take that next step, find out what loan offers you qualify for.
Robert Peterson discovered his gift for creating new flavors in the 1980s when he worked in sales and product development for a national spice company. As his talent blossomed he decided to take the plunge and start his own catering business in 1989, The BBQ Boys. The company has since become a staple in the Bay Area, serving their unique version of California barbecue that incorporates the region’s seasonal ingredients.
While The BBQ Boys have enjoyed phenomenal success, every small business has to be prepared for the unexpected. Between October 2016 and April 2017, California averaged almost 30 inches of precipitation, the highest since 1895 – far from optimal weather for a BBQ company that caters a lot of outdoor events. Robert realized his business would need working capital to get through the wettest season in 122 years.
Robert had quite the harrowing quest for capital before he discovered LendingClub. He started his search at a bank branch but the bank did not provide the full financing he needed. He changed tactics and turned to an online loan aggregation site but his initial contact was with alternative lenders with high-pressure sales teams. Instead of listening to his needs, Robert felt that “they treated him like they were selling stocks and bonds” and just trying to get him to take any type of financing – regardless of what his company needed. Robert even likened the experience to the “Boiler Room,” a crime drama that features hyper-aggressive salesmen peddling risky stocks to unsuspecting buyers.
All that changed when Robert found LendingClub. The Client Advisor team at LendingClub really listened to Robert and patiently helped him through the process – ultimately getting The BBQ Boys the right financing for the business. Robert felt that everyone he spoke to at LendingClub had “all been really great and very professional…more professional than 90% of the other people“ he dealt with when searching for other financing options. And coincidentally Robert’s main client advisor Kevin could personally attest to the quality of The BBQ Boys food having attended a Bay Area event catered by the small business. With the loan through LendingClub, Robert is feeling very optimistic about the future of his business. The BBQ Boys plan to launch a new website, revamp their menu, and introduce their products in new channels in the coming months.
Robert’s learned a lot on his small business journey and has some advice for other entrepreneurs, particularly those that are just starting out.
“Take the time to plan what you’re doing…really develop where your first year is going to be financially and make sure you’re prepared for that.”
Robert also recommends all small businesses make a major commitment to their “online thumbprint” as too often local businesses don’t invest enough in their online presence. Finally, he emphasizes producing a quality product or service – one bad experience can turn away a customer for life.
When Todd Lemke founded Omaha Magazine, LTD 34 years ago, he couldn’t have foreseen all the changes the print industry would face but through strong leadership and smart decisions, Omaha Magazine has flourished as Omaha’s premier lifestyle magazine. Recently, Omaha Magazine, LTD was looking to expand their business into providing ticketing for local events. Todd obtained a small business loan through LendingClub to help fund this expansion and keep his company growing.
Originally Todd had looked to obtain a small business loan but the process was taking too long even though Omaha Magazine, LTD had a solid business case. Todd knew that if he waited the months it would take to get the funds, the opportunity would pass him by and a competitor could swoop in. He knew it could take just as long for a regular bank loan, particularly if he didn’t want to provide real estate as collateral. And he was somewhat hesitant to apply for a loan online after having a not so great experience with an alternative lender who charged sky-high interest rates.
Then serendipity struck. Todd was having a conversation with his brother who had recently received a personal loan through LendingClub. Happy to learn that LendingClub also offered access to Small Business Loans, Todd filled out the online application. Within minutes, he had a loan offer through LendingClub and within days he had the funds in his bank account.
Todd was thrilled with how automated the loan application process was, “I was amazed how you use technology to shorten the process time.” At LendingClub, we know small business owners are busy so we keep the process fast, simple, and transparent. As Todd put it, “All I want is an answer…Yes or No…a quick answer that’s a ‘No’ is better than a long ‘Maybe’.” When all was said and done, the loan through LendingClub saved Todd a substantial amount on interest expense when compared to a competitor’s loan offer.
After getting a loan through LendingClub, Todd is even more optimistic about Omaha Magazine, LTD growing significantly – predicting that the new revenue stream from local event ticketing will be a major contributing factor. While other print publications have faltered, and failed to adapt to the digital revolution, Omaha Magazine, LTD has embraced new technology and at the same time remained a leading print publication.
So, what’s the secret to success? As Todd says, “The number one rule in business: Never run out of cash.” There’s always the unexpected in business, you can’t always predict cash flow, and you don’t want to lose out on an opportunity to a competitor.
Stay tuned for more customer stories and feel free to navigate over to our Small Business loan section to see how LendingClub can help.