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Updated: March 27th, 2020
Do you remember the exact moment you started your high-growth business?
In 2009, Eyal Levy journeyed home to Israel to visit family and friends—with his very pregnant wife. Determined to find a way for her to rest comfortably while traveling, they stumbled upon a local style of stretchy furniture in the bustling street markets of Jerusalem that offered snugness and support. A lightbulb went off—and Yogibo was born.
Over the next seven years, Yogibo grew into a cuddly and profitable success with over 20 retail stores across the New England area. Eyal wanted additional funding to take Yogibo to the next level, but quickly learned how hard it was to get a bank loan—even as a profitable company. “I thought banks would like to take part in my success and help Yogibo grow—but I found out that they don’t,” he said. Here are five lessons he learned along the way.
Yogibo’s beginnings were anything but glamorous. Eyal worked out of his basement in New Hampshire, and used his savings to get his business off the ground. “For the first couple years, I didn’t take a paycheck,” Eyal admits. “We hit profitability every year, but I chose to reinvest everything back into my business to grow it faster.”
Thanks to some early customer feedback, Eyal realized that ecommerce wasn’t the right approach to selling his product: people fell in love with Yogibo when they tried it themselves—not by looking at pictures online. “The difference really is in the experience,” notes Eyal. “I figured no one could sell my product better than me, so I opened a concept store in an upscale mall outside Boston.”
Banks just wouldn’t work with Eyal. The obstacle? Antiquated definitions of collateral. “Banks just didn’t understand my business. Most of my revenue goes right back to buying equipment and opening more stores—which their dry formulas don’t take into account as collateral.” Eyal gave up on his bank and applied for a peer-to-peer loan with Funding Circle instead. The online application was “very fast, with no hurdles”—and he got a loan approved for $300,000 five days later.
As a business owner, Eyal was finally able to create the environment that he always wanted to work in—and that’s a freedom he never wants to give up. For Eyal, nothing is pricier than lost opportunities—or giving up ownership of your business. “My loan with Funding Circle is much cheaper than giving up equity. Ultimately, our loan is beneficial because for every dollar we’ve borrowed, we will make more profit.”
To be a strong loan candidate, Eyal knew he had to clearly articulate his plans for growth: invest in a distribution center to open new stores and expand into the Washington DC area. Thrilled about this “natural next step,” he credits his relationship with Funding Circle for empowering him to grow. “I would definitely recommend Funding Circle. Their fast and easy process was a big advantage for my retail business.”
Paige Smith is a content marketing writer who specializes in writing about the intersection of business, finance, and tech. Paige regularly writes for a number of B2B industry leaders, including fintech companies, small business lenders, and business credit resource sites.