HACKENSACK, N.J. — BoeFly.com has been described as the Match.com for lenders and franchisees. And many pairings have indeed ended up in marriages: money granted to entrepreneurs.
This fall, Robert Gallo plans to open a Saladworks franchise, a made-to-order salad eatery, in his hometown of Ridgewood, N.J., 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 services 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. More than 100 franchises work with BoeFly.
BoeFly, which sees credit loosening up for small businesses such as franchises, is the brainchild of CEO Robert Tannenhauser and co-president Michael Rozman. It uses its proprietary SmartForm technology to connect small-business borrowers with lenders from among more than 2,200 participating banks, based on the lending profiles provided by borrowers and banks. Loans that are granted are Small Business Administration-approved. 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.
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 $55 montly subscription fee, Rozman said. He said BoeFly only connects a bank with businesses that match its lending criteria. And would-be franchisees dont have to trek from lender to lender.
In March, Gallo put his business financial profile on BoeFly. In about two weeks, he had 11 inquiries from lenders.
Lending to franchises is on the rise, according to BoeFlys data analysis. Franchise loans grew by 22.9 percent in the past 12 months versus the preceding 12 months, BoeFly said. Such loans are projected to rise 50.2 percent this year, to an expected 3,441 from 2,291 last year.
In comparison to a year ago, the lenders are further along in granting credit than they were, Rozman said.