For borrowers and financial institutions alike, the loan lending and approval process can be lengthy, slow, and full of bumps in the road. Connecting small businesses and other organizations with capital as efficiently as possible is a challenge in and of itself, so how can lenders simplify the process and reduce obstacles to capital in order to make a positive impact? Cleveland startup Presta is answering the call, with a one-stop-shop platform that streamlines the lending process for all parties involved.
“We help traditional financial institutions like loan funds, credit unions, and community banks better lend to small and medium-sized businesses,” CEO and co-founder Leo Peña said. “Prospective borrowers can begin the loan application process online in one platform, such as filling out forms, receiving information, and asking questions about what they’ve submitted. They can also use our platform to pay their loan — it’s a lot easier for them to manage everything all in one place.”
As business founders themselves, Peña and co-founder Peter Truog recognized the need for a better way to democratize capital, not just for borrowers, but also for the financial institutions providing the funds. The Presta platform continues the mission of The Opportunity Exchange, the first company founded by the pair, which connected cities and small businesses with equity investors who could provide economic development tools. Now, Presta is leveraging technology to further expand access to funding.
“The Opportunity Exchange was an equity investment marketplace for economic development projects,” Peña said. “Through that work, we were exposed to some of the difficulties of accessing capital. We spent a lot of time trying to better understand what is so difficult about the lending and debt process and recognized that a lot of lenders don’t have the right software, so loans can take forever to close, with an average of 60 to 90 days across the board. Small businesses often only have a few weeks of cash on hand, so that’s a pretty stark difference.”
So how does better financial software translate to expanded access to funding? Not only does Presta help reduce wait times for loans and consolidate the application and approval process, it also has the overarching goal of addressing the credit gap affecting small businesses across the country.
“Ease-of-use and efficiency are huge,” Peña said. “Being able to reduce the time it takes to access a loan makes those loans more feasible for small businesses. If you need a loan to help cover salary in a month, but the process takes two months, that doesn’t make sense. I think that’s the largest impact with where the platform sits right now, and the other problem we’re trying to tackle is the massive credit gap in terms of lack of capital supply.”
In addition to closing that gap, Peña hopes that Presta’s streamlined lending infrastructure will empower people to boost wealth creation through entrepreneurship, opening even more space and opportunities for future business owners.
“Our thought is ‘how do we continue to empower people who are building wealth for themselves to help create space for others in their communities,’” he said. “What fuels me is knowing that the work I do helps create opportunities for others, so we’re trying to support small businesses and startups doing the same.”
Leaning into the Ohio startup environment has brought Peña and Truog closer to achieving that goal. Recent funding from Ohio Third Frontier partner JumpStart, among other participants, is helping further develop the platform’s tools, and the startup is continuing to build off of direct feedback from users, so Presta can funnel that support back into Ohio and other communities across the country.
“From an Ohio perspective, JumpStart being on our cap table as one of our investors has been really helpful with introductions to financial institutions and getting connected with the Cleveland and Midwest communities,” he said. “Bouncing ideas off each other or talking through some of our challenges and getting feedback and suggestions from other founders — it’s been great to be supported that way.”