News and advice for small business owners, by small business owners.

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Why We Started Fundera

Small businesses are the lifeblood of America. 28 million small business owners employ 49% of the U.S. workforce, create the majority of new job opportunities, and are responsible for 46% of the country’s GDP.

What’s amazing is that given the contribution of small businesses to our economy, the odds are continually stacked against us. The number one problem small businesses face is access to capital — businesses need money to make money.

This problem hit home for me two years ago. My cousin Zach is a fellow entrepreneur. He and his brother own and operate a chain of restaurants in Ohio called Fusian — think Chipotle but for sushi rolls. It’s a remarkable establishment and one of my favorite places to eat. I fell in love at first bite when I visited their original location in downtown Cincinnati.

I wanted to be part of Zach’s journey, so I offered to invest in the company to help him open a third location in Columbus. Zach turned down my investment because he takes great pride in the fact that he and his family own 100% of the company, and he did not want to take on equity capital. Instead, he asked me for a loan to cover the expansion costs. He wanted $300,000 and to pay it back over three years with 10% interest.

I asked why he didn’t just go to a bank and was shocked when he told me that he had visited several banks, all of whom denied his request for a loan. The fact that a thriving business that employed more than fifty people was being denied the chance to grow seemed downright wrong to me, and the reasons he was denied — that he hadn’t been in business for more than five years and restaurants were “a risky industry” — were unreasonable.

Zach isn’t the only entrepreneur who has had this problem. Banks are failing to meet entrepreneurs’ demands for credit. Every year, more than 40% of small businesses seek funding to grow, but less than 20% of them receive the capital they need from banks. Another 5 million business owners need funding but don’t ask because they assume they’ll be rejected. The numbers are astounding, especially considering the important impact small businesses have on our economy.

As a result of banks’ inability to meet this need for capital, an entire industry of alternative lenders has surfaced over the past decade to satisfy demand. It’s an industry that can be confusing and overwhelming to entrepreneurs, with credit products that can be unfamiliar and intimidating like equipment financing, merchant cash advances, accounts receivable factoring, term loans, franchise loans, and real-estate loans.

Today I am proud to launch Fundera and be a part of the solution to a problem plaguing millions of small business owners looking to grow their businesses. Fundera is an online marketplace that connects small business owners seeking credit with the best lender for their business.

Inspired by conversations with entrepreneurs like Zach from Fusian, we believe that small business owners deserve access to the same tools that empower consumers to make sound financial decisions. That means that getting a small business loan should be as easy as booking a flight on Kayak or reserving a room on Airbnb.

During the next decade, non-bank alternative lenders will emerge as the primary capital providers to small businesses, which will drive nationwide economic growth, boost employment, and solve the number one problem entrepreneurs encounter: access to working capital. We will empower entrepreneurs to grow their businesses by helping them find the financing they need while expanding the market for small business credit.

— Jared Hecht, co-founder of Fundera

Jared Hecht

Jared Hecht

Co-Founder & CEO at Fundera
Jared is the co-founder and CEO of Fundera, an online marketplace connecting small business owners to the best loans for their business. He writes frequently on small business lending and management.
Jared Hecht
  • Wendy Elkin

    I still see a big problem in the way funds are becoming available for small business, even though it’s great that companies like Fundera are springing up. There are so many people out there – (I’m one of them) that have had some bumps in the road along the way with personal events, economic events, etc., and credit scores have been affected. So, when people like me go to find funding to try to recover and make our lives better and the lives of people we will touch, we are the ones who are charged huge interest rates or just turned down completely by companies even like Fundera. Where are the people who want to specialize in helping people like me get a jumpstart, which in turn helps me to help others? There are so many out there like me who have big gifts to contribute to changing and shifting and transcending many of the problems in the world, who aren’t able to because of unattainable funding, or funding that is so cost prohibitive it’s not worth it. It makes no sense.

    This is the population who is truly being underserved, but penalized the most.

    Wendy Elkin
    Ascend to Wellness
    Conscious Warriors