{"version":"1.0","type":"rich","provider_name":"Acast","provider_url":"https://acast.com","height":250,"width":700,"html":"<iframe src=\"https://embed.acast.com/$/5ab6fe42bb6ddf45527e077e/5abecd27add0fcca03f35ba7?\" frameBorder=\"0\" width=\"700\" height=\"250\"></iframe>","title":"Lending Loop with Cato Pastoll (CEO)| EP5","thumbnail_width":200,"thumbnail_height":200,"thumbnail_url":"https://open-images.acast.com/shows/5ab6fe42bb6ddf45527e077e/1569888228768-5e14f58267901baa88c680902187f424.jpeg?height=200","description":"<p>Summary:</p><p>In this 5th episode of the Fintech Impact podcast, Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews Cato Pastoll, the Co-Founder and CEO of Lending Loop – an alternative lending source. Lending Loop mixes peer-to-peer lending with crowdsourcing along with artificial intelligence. Find out the story from Cato Pastoll about how in 15 months Lending Loop has managed to give out over $16 million in loans – and has an average monthly business growth of 20%.&nbsp;</p><p>Show Notes:</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;01:02 – Lending Loop is an online lending marketplace. They connect</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Canadian investors that are looking for more attractive returns on their</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;savings with small businesses that are looking for a more affordable source</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of financing.&nbsp;</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;01:34 – Both of Cato’s parents were small business owners, which taught him the</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;difficulties in finding financing. These lending platforms have been popular</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in the UK since 2005 and since 2008 in the US, but not in Canada. Lending</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loop started in 2016.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;04:00 – Marketplaces aren’t easy to start or scale – and it has been hard to do in</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Canada because of the regulatory hurdles.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;05:14 – Lending Loop lets you sign up as a lender or a borrower. They curate</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;applications, review them, and make sure they are credit-worthy. Only 10%</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;approval rate, over $16 million lent and about $2 million per month with a</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20% monthly growth rate.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;06:24 – Loans are crowdsourced, you can pledge as little as $25 towards a loan.</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You can build a portfolio with $2,500 across 100 different companies if you</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;wanted to.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;07:44 – You are able to establish the criteria for the types of businesses you lend</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to. Their auto-lend platform will allocate your money for you. Regular bank</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;deposits into Lending Loop are possible.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;08:45 – The rates range from 5.9% to the mid-20%.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10:46 – QuickBooks is integrated with Lending Loop.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13:12 – Lending Loop makes money from an origination fee of between 2.5 to 6.5%</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of the loan as a one-time fee, as well as a spread of a 1.5% annual fee</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;on every repayment.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14:20 – Businesses are given a letter grade based on the risk of repaying their&nbsp;&nbsp;&nbsp;</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;loans – which also determines their interest rate, with worst percentage</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;being only about 10% risk of default.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16:33 – All of their success and all of their failures are posted directly on their</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;website for full transparency. The largest loan to date has been about</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$200,000.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17:44 – The main focus is to scale the platform.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19:04 – The market reception and demand has been great. There has been</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;skepticism from the more traditional members of the industry.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20:38 – Low investments have allowed people to try it out to make sure it is real –</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;then invest more later.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22:05 – Businesses provides a summary of what they are looking to use</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the money for, what the business does, why they are safe to lend to, a little</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;bit about their financial performance.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24:26 – The challenges have included: general awareness, and providing financial</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;literacy for people.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26:42 – Lending Loop currently has a team of 20.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30:47 – The demographics of the borrowers: no industry makes up more than 9%</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of the portfolio and lenders have been coast to coast.</p><p>●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;35:00 – After building it out, seed capital came from family and friend – then a first</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;round of funding.</p><p>3 Key Points:</p><p>1 Only 10% approval rate, over $16 million lent and about $2 million per month with a</p><p>&nbsp;&nbsp;20% monthly growth rate.</p><p>2. You can set the criteria for the types of businesses you lend to. Their auto-lend platform will allocate your money for you.</p><p>3. All successes and failures are posted on the Lending Loop website for full transparency.</p><p>Tweetable Quotes:</p><p>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;“We actually only approve about 10% of the businesses that are applying for</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;financing with us .“ – Cato Pastoll&nbsp;&nbsp;</p><p>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;“You can set the criteria for the types of businesses you want to lend to .“ – Cato Pastoll&nbsp;&nbsp;</p><p>-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;“So the business provides a write-up and a summary of what they are looking to use</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the money for, what the business does, why they are safe to lend to, a little bit</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;about their financial performance.“ – Cato Pastoll&nbsp;&nbsp;</p><p>Resources Mentioned:</p><p>●&nbsp;<a href=\"https://ca.linkedin.com/in/pereirajm\" target=\"_blank\">LinkedIn</a>&nbsp;– Jason Pereira’s LinkedIn</p><p>●&nbsp;<a href=\"https://www.facebook.com/jason.pereira\" target=\"_blank\">Facebook</a>&nbsp;– Jason Pereira’s Facebook</p><p>●&nbsp;<a href=\"http://www.woodgate.com/\" target=\"_blank\">Woodgate Financial</a>&nbsp;– Website for Woodgate Financial</p><p>●&nbsp;<a href=\"https://www.lendingloop.ca/\" target=\"_blank\">Lending Loop</a>&nbsp;– Jason Pereira’s Facebook</p><p>●&nbsp;<a href=\"https://ca.linkedin.com/in/cpastoll\" target=\"_blank\">Cato Pastoll</a>&nbsp;– LinkedIn page for Cato Pastoll&nbsp;&nbsp;</p>","author_name":"Jason Pereira"}