With franchisees still struggling to access the capital necessary to open new stores and run their operations, franchisors are getting help from an online service to pair operators with suitable lenders.
David Nayor, co-president and chief operating officer of BoeFly.com, says the service was concocted after he and some of his former-lender colleagues saw “a great deal of inefficiency in the lending market.”
“We came to the conclusion that we needed a marketplace where borrowers could go and build their loan package, and then link with lenders who were captive and wanted to fund their loans,” Nayor says, “instead of walking into a bank with a loan package or the request of a loan and really not fitting with that bank’s lending parameters.”
Nayor compares BoeFly to dating sites like Match.com and eHarmony.com in the way it pairs lenders and borrowers. “All of these matching sites are allowing two sides of a deal to get together more efficiently,” he says.
With BoeFly, potential borrowers build their loan packages, complete with all of the supporting documents that lenders require, such as backgrounds, tax returns, and other financial statements.
Member lenders, of which there are more than 1,500 ranging from community banks to national lenders, can then efficiently sort through the loan packages submitted by borrowers.
This system helps lenders because they have no trouble finding borrowers that fit their parameters, Nayor says. Meanwhile, it streamlines the process for borrowers, who typically have to visit several banks and prepare several packages before finding the right loan.
“What we’ve created is the ability for the borrowers to do that once online, which saves a lot of time,” Nayor says.
More than 80 franchisors—including several quick-serve brands, such as Arby's, Dunkin’ Brands, and CKE—have partnered with BoeFly, Nayor says. Franchisors buy a subscription to the service, which allows their franchisees to access it at a discount.
“These great franchises have been stepping up to the plate and saying, ‘This is a major issue for our franchisees. If they don’t close their loans, we don’t open up units, and no one wins,’” Nayor says.
Nayor says he believes that banks are “on the cusp” of lending again, and that services like BoeFly will give them more confidence to do so.
“Banks are starting to look at deals more aggressively than they have in the past two years,” he says. “Now that they have cash, it’s time for them to lend, because that’s really how they make money.”
By Sam Oches