Peer to peer business loan marketplace startup, Loanzen, has raised an undisclosed amount of seed funding from angels through TracxnSyndicate. The startup helps businesses which are less than 3 years, or do not have collateral, meet short term cash-flow gaps by offering them short tenor (up to 120 days) loans. Through Loanzen, businesses which have traditionally been out of scope for bank lending, are connected with lenders who lend to companies on the marketplace with the help of Loanzen’s credit scoring model.
Its web-based application process has 2 simple steps – 1. Borrowers provide their business, social and financial information for on-boarding 2. Borrowers post invoices to access loans against invoices. Based on the information provided, LoanZen arrives at a credit score after which a term-sheet is issued to the borrower outlining loan terms.
According to a study conducted by World Bank investment arm IFC in conjunction with SIDBI and RBI data, the market size for unsecured short term loans is $120 billion, which is the opportunity Loanzen is targeting. According to Neha Singh of Tracxn, “Loanzen is addressing an important gap in the lending ecosystem as it empowers the small and medium businesses to access hassle-free short term credit. The team comprising of Madhu Sudhan, Venkatesh Sankararaman, and Ritesh Kadmawala comes with tremendous credentials. We are excited to see it grow and achieve its purpose.”
The startup was founded in September 2015 and officially launched operations on 15th January 2015. The company now works with businesses across sectors including staffing services, equipment providers to hospitals, software services firms, ad agencies, manufacturing companies and sellers on eCommerce portals. Loanzen currently operates in Bangalore and plans to expand to Mumbai, Chennai by April 2016