Lender Matt Irving on the Deal Business’ Most Valuable Currency

Matt Irving is the head of business development and partnerships at Able Lending, a direct lender that offers loans up to $1 million to small businesses.

This year, Able Lending provided a loan to an IT services company after connecting with the company’s investment banker on Axial. Matt talked with us about why relationships are the currency of the deal business — and how Axial helps Able build its pipeline for the short and long-term.

Able provided a loan earlier this year to an IT services company after connecting with their investment banker, The Yale Group, on Axial. How did that partnership come to be? 

We met Rob [Gettinger] at The Yale Group after seeing a different company they were representing on Axial. By the time Rob was representing the IT services company, our firms already had a comfortable relationship. Based on the company’s debt to service coverage ratio and the fact that they were looking for less than one million dollars, Rob recommended Able as a good fit.

Yale Capital Group did a great job in really helping the customer feel heard, getting sharp financials ready to go for us, and really just being a true advocate for the business throughout the process.

Is the process different when you’re working with an owner represented by an advisor like Rob, vs. owners raising capital on their own?  

Raising capital is super hard. Take Able’s founders — when they were raising equity, they had upwards of 90 meetings and closed two term sheets out of it. It’s a long process no matter what, but in our experience meeting with borrowers and business owners, we’ve noticed that when a customer comes to us through an advisor, it really expedites the process. Not only do we get access to financials more easily, but there’s already customer buy-in and trust in place. The advisor can help the business owner understand how to evaluate our offering, how it compares to the market, and if it’s a good deal.

If we win the loan, that’s great. If we’re not a good fit and we’re able to point them in the right direction, that’s almost just as good. At the end of the day, we want to make sure that these businesses who are the country’s primary job creators get the funding they need.

What makes Able different from other online lenders?

Able’s mission is to fund the Fortune five million. We work alongside an entrepreneur’s own community to provide business owners with financing they may not be able to receive from a bank or another lending institution by working.

It works like this: In addition to traditional financing from our capital providers, entrepreneurs can bring additional people (known as backers) into a loan. In doing so, the entrepreneurs reduce their cost of capital and the backers receive interest on the loan. The entrepreneurs get the capital they need at the lowest cost outside a bank loan, without any dilution, and they get to reward the people who believe in them.

What are your typical rates?
Very simply, we’re lending three times the amount of capital at half the rate of the rest of the market. An average loan for us is around $250,000 for three years at a 15% APR. A typical term loan lender on the market might offer an $80,000 loan over three years at a 35% APR. We have found that the average business we work with will come to us at least twice. 

What value do you see in being an Axial member?

Relationships are the currency of this business. We want to go where the puck is, and Axial, above the other players in the market, does a great job not just profiling who’s out there but helping us build relationships.

Intermediaries have no shortage of phone calls from lenders trying to work with them. The ability for me to work with Frank [Able’s professional services consultant at Axial], and for Frank to be able to say, “Hey, Matt, I know exactly who you need to talk to — here’s the name of this intermediary, I’ll do an email intro” — that’s extremely valuable. We’re not only able to source the right people, but to come in under the strength of the Axial brand name and have a warm relationship from the start.

Over the last six months, a lot more owner listings have come onto the network too. It’s been great to be able to meet more business owners, and it’s been a really cool value add for the direct side of our business. We’ve been able to warm up those relationships very similarly to how we can warm up intros with intermediaries, and it’s helping our traditional cold calls become a lot better.

Can you give me another example of a recent company Able financed? How are they using the loan?

One deal that comes to mind is EcoLogic Solutions. They are a commercial cleaning business in the US. They had great financials and a highly scalable model in working as the go-to cleaner for all Chuck E Cheese’s in the US. They were a great fit for Able as they had a strong financial story, healthy annual growth, and a thriving community of investors who helped meet 20% of the requested loan amount. This is a key example of where we are helping businesses owners democratize their cost of capital by leveraging friends and family money as a portion of the loan.

What might we find you doing when you’re not at work?

If I’m not at work, I am exploring Austin with my wife and daughters. We love hiking, eating at new restaurants, and finding new parks around Central Texas.