Lending platform based in North Carolina loan He made some money on his own.
According to a recent Securities and Exchange Commission filing, the company raised $3 million from a group of five backers.
Headquartered in Durham, North Carolina, LoanWell presents itself as a “one-stop-shop for lenders,” offering ingestion, creation, underwriting, closing, services and reporting in one place. The company says its system can be fully tagged and customized, similar to Squarespace, and has been designed with lenders set-up and servicing needs in mind.
But LoanWell co-founder and CEO says the company has a bigger mission.
“Today, nearly half of black households are unbanked or underbanked, causing a huge financial inclusion gap,” Bernard Worthy wrote in a blog in March. “Bridging this gap is imperative, as it would improve economic opportunities and outcomes, especially for communities of color.”
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PYMNTS explored this issue earlier this year in a conversation with Robert Villareal, executive vice president of CDC Small Business Finance and president of Bankers Small Business CDC of California.
He described why many strategies to address underfunded small businesses have failed, and while only a complete overhaul of capital markets could make things fairer for minority business borrowers.
“You hear a lot about food deserts,” Villarreal said. “There are not only food deserts, there are financial deserts, which means there is no bank or financial institution in those communities. And if there is a ‘financial institution’, it is a payday lender. It is not a responsible lender.”
Even the Small Business Administration, which is arguably the largest government agency tasked with connecting small business owners to capital, is not always helpful, as it operates through the banks and financial institutions mentioned by Villarreal.
Worthy said LoanWell has previously raised more than $1 million to increase access to funds for thousands of small businesses, securing more than $100 million in loans in 2020 alone. The company said it has also helped businesses stay funded during the pandemic through the North Carolina Rapid Recovery Loan Program.