AmEx to Launch Small Business Loans on Lendio

American Express is getting knee deep in small business lending and has chosen to go online. 

The bank is partnering with small business loan marketplace Lendio to bring its merchant financing products to small businesses. This marks a step forward for American Express as it wants to look beyond its customer base and turn new merchants into borrowers. 

Lendio CEO Brock Blake called the product a hybrid between a merchant cash advance and a bank loan ranging from $5,000 up to $2 million for two years. Merchants with a minimum revenue of $50,000 and two years of operating history can apply for this loan based on cash flow and credit card sales.

“This was a relationship that has been a long time coming,” said Blake.  “We are fortunate to have won this deal and this opens the door for many similar relationships.”

In February this year, American Express ended a 16 year relationship with retail giant Costco. That partnership constituted 20 percent of the company’s outstanding loans which it hopes to recover by growing the small business loan revenue. The bank also featured its charge cards on online marketplace, Fundera for merchants to compare its business charge cards with traditional loans. To provide some context, Amex cards for small businesses funded $190 billion in purchases, up from $122 billion in 2010.

And as for Lendio — the company has been bullish about striking big ticket deals. The Salt Lake City-based loan marketplace funded $128 million in financing over 5000 small businesses, clocking in 1175 percent annual growth from the previous year.