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Updated: Jul 16, 2015
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 fabric furniture in the bustling street markets of Jerusalem which provided that hard-to-find balance of both snugness and support. Back in the States, Eyal’s American friends couldn’t get enough of the spongy, elastic fabric. A lightning bulb flickered on in his head: there was simply nothing like this in the US market. And thus, Yogibo was born.
Yogibo’s beginnings were anything but plush. Eyal worked out of his basement in Nashua, New Hampshire, and used his family’s savings and some seed money from a private investor to get his luxury bean bag, body roll, pillow and accessory 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.” Crediting his business savvy to the years he spent running operations for a medical equipment company, Eyal is now confident that entrepreneurship is the right path for him.
Indeed, Eyal knew Yogibo would make a difference in the lives of individuals undergoing back pain or a pregnancy like his wife – or parents simply looking for something comfortable for their children to study on. However, he didn’t expect to make a difference in the lives of adults and children living with Autism and other developmental disorders – and soon became involved by supporting fundraisers through product donations in his local community. “Yogibo products are very calming and help build our customer’s confidence. I receive amazing testimonials from therapists all the time, and nothing makes me happier.”
Such experiences helped Eyal realize 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.”
Over the next seven years, Yogibo grew into a cuddly and profitable success with twenty-odd retail stores across the New England area. Eyal had proven that his business model was working, and he dreamed of duplicating it in more zip codes – a venture that would require additional funding to get started. As an immigrant business owner, he didn’t anticipate the conservative lending approach of banks in the US and quickly realized it was very hard to get the financing he needed to grow, even as a profitable company.
The obstacle? Antiquated definitions of collateral. Over the years, Eyal had invested a lot of money in assets like vehicles, computers and expensive software programs to run his stores – items which often hold zero value in the eyes of banks. “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.”
Although Eyal was tempted to wait it out and give his bank a chance, he decided the traditional process would take far too long – and ultimately hurt his business. “I had great opportunities to grow our business that I just couldn’t miss out on, so I looked for a lender that was ready to think creatively and make quick decisions.” After his business partner read about a new marketplace lender called Funding Circle in Entrepreneur, they completed an online application right away – a process which they found to be “very fast, with no hurdles.”
Almost immediately, Eyal was greeted with a different customer experience than he received at his bank. “My loan advisor at Funding Circle was so awesome to work with. The whole process was very easy and pleasant. Exceptional customer service like that should not be taken for granted.” Whereas Eyal’s bank was not willing to invest resources into customers at Yogibo’s revenue point, he found that the Funding Circle team treated him like an important customer from the start.
Approved for a $300,000 business loan from Funding Circle, Eyal plans to 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.”
Reflecting on his decision to borrow with Funding Circle, Eyal concludes that nothing is pricier than lost opportunities – or giving up ownership of your business. “My rate with Funding Circle was higher than I might have gotten at a bank, but it’s cheaper than giving up equity. Ultimately, our loan is beneficial because for every dollar we’ve borrowed, we will make more profit.” He encourages other small business owners hovering at that critical moment of growth to ask themselves: “Can you generate more profits than your interest rate? If so, a loan is right for you.”
Ready to expand your small business? Apply for a business loan with Funding Circle today!
Paige Smith is a Content Marketing Writer and Senior Contributing Writer at Funding Circle. She has a bachelor's degree in English Literature from Cal Poly San Luis Obispo, and specializes in writing about the intersection of business, finance, and tech. Paige has written for a number of B2B industry leaders, including fintech companies, small business lenders, and business credit resource sites.