Lendinero is on a mission to help Latino-Owned Businesses (LOBs) with Stimulus Funding

December of 2020 was the moment of a lifetime for many small business owners.  Lawmakers passed the bill before 2021, just in time to start off the year on the right path.  The agreement sets aside $285 billion for additional loans to small businesses under the Paycheck Protection Program, renewing the program created under the initial stimulus legislation. The latest version includes stricter terms that appear intended to correct some of the unpopular elements of the original program. It caps loans at $2 million and makes them available only to borrowers with fewer than 300 employees that experienced at least a 25 percent drop in sales from a year earlier in at least one quarter. The agreement also sets aside $12 billion specifically for minority-owned businesses.  Are minority business owners obtaining funding?

Many minority owned businesses, including many of the country’s estimated 4.4 million Hispanic small-business owners, did not even have a chance to start the application process before the initial funding round went dry within 13 days. Also, there was widespread confusion about the process. Shortly, after the application process finalized on June 30^th of 2020.  Furthermore, the Economic Injury Disaster Loan Program was challenging at times.  Similar to PPP, at times the money ran out.  Also, the SBA stopped taking new EIDL application in 2020.  In fact, the SBA received more loan applications in 14 days than it received in the last 10 years.  This may have created uncertainty for many minority business owners including Latino-Owned Businesses (LOBs).

Lendinero, a Miami-Based fintech company has been on the forefront of EIDL and PPP assisting minority-owned businesses and Latino-owned businesses (LOBs).  Since 2013, Lendinero has been assisting the underserved markets.  In fact, before expanding nationwide online Lendinero provided workshops to educate minority owned businesses on alternative funding options with community based organizations in Miami.  In 2014,  Gil Zapata, CEO of Lendinero and MBA students he had hired from Florida International University provided workshops alongside with Partners for Self-Employment Inc, Accion USA, (SBA certified micro lenders), the Florida State Minority Supply Development Council and other organizations.

What are the challenges?
Lending to Latino-Owned Businesses translates into smaller loans at relatively high transaction costs.  First, marketing costs are much higher than a broader market. Second, having a bilingual staff with the cultural and business financial knowledge is not easy to find and expensive to train. Third, there may be language barriers for bigger online lenders like lendingclub.com, kabbage.com or other fintech companies.  Last, the cost of underwriting these loans may translate into high transactional costs.  This is why Lendinero came into life.  To fill the gap between Latino-owned businesses (LOBs) and the fintech space.  Lendinero runs an online platform that connects Hispanic entrepreneurs with other fintech companies.  At the same time, Lendinero syndicates loans acting as a co-lender.

As a result, in 2020 Lendinero turned to the SBA and to approved PPP lenders to help Latino entrepreneurs.  Lendinero has worked side by side with Benworth Capital Partners, a Paycheck Protection Program (PPP) lender and other SBA funders. Lendinero provides help in English and Spanish to guide these businesses through the application process for both the PPP and the Economic Injury Disaster Loan Program (EIDL).  “The challenge is not the application.  The hurdles to overcome are the platforms, the financial documentation, financial analysis and knowing how to translate these figures to the SBA.  For instance, in the 2^nd round of PPP there is 25% reduction revenue test, appropriate forms for forgives and other technical calculations.  Entrepreneurs are not loan specialist nor accountants. This entails not only accounting but pre-underwriting.  It’s easy to make one single mistake as a business owner on these applications, “states Gil Zapata, founder and Managing Director for Lendinero.

The challenges of running a business in uncertain economic times is difficult.  Getting a PPP or EIDL loan denied makes the equation even more challenging.  “We have been funding minority owned businesses since 2013.  Today, our goal is to make sure that these businesses get access to this capital to save their businesses, retain employees, and help their families, “said Mr. Zapata.

While both the PPP and the EIDL are types of loans — and businesses could apply for both — their intended purposes are different.  Lendinero has helped thousands of  Latino-owned businesses and minority businesses with information, their applications, technical assistance and consulting

About Lendinero

Lendinero is a Fintech company that serves as an online marketplace and syndicate lender to provide capital to small and mid-size businesses. We specialize mostly on minority-owned and Latino-owned businesses who are under served by other Fintech companies or Banks. Lendinero has created its own proprietary on-line application that filters the

borrowers profile to match with the appropriate lenders. With one application, a borrower can receive multiple offers