P2Bi: An online lending platform for growing companies

Recently, I learned about an interesting new resource for pet companies who need access to growth capital. It’s called P2Binvestor (P2Bi), and it provides online access to lines of credit through a hybrid technology and marketplace model. Given my work with rapidly growing pet companies, I am always on the lookout for non-traditional methods of raising capital. I was fascinated by what I learned about P2Bi, so I asked to interview their founder/CEO, Krista Morgan.

1. Where did the idea for P2Bi originate?
I spent six years living in London— one of the first places financial technology and crowdfunding really began—and was exposed to the online lending industry very early on. At the time, my dad was working for a factoring company in Denver, and it occurred to us that factoring was one of the areas where financial technology could make a huge impact and disrupt what was a very old industry running on antiquated, cumbersome technology. After the market crash in 2008, banks had significantly decreased their loans to businesses and there was—and still is—a lack of capital available to entrepreneurs. So in 2012 we took the idea of factoring and created a hybrid ABL/factoring product funded by a crowd of investors. It provides customers a simple to understand, scalable line of credit and our crowd the still has the legal protection of factoring.

2. How is P2Bi different from a traditional lending institution? From an online lending platform like Lending Club?
The unique thing about P2Bi is really our technology and the way we have structured our access to capital. Because we have this crowd of investors, we’re able to deploy a lot of capital very quickly—much faster and in much larger sums than other online lenders in the space. At the same time, a lot of the companies we serve are growing rapidly and that volatility is too difficult to manage for a lot of traditional lending institutions. Banks simply don’t have the technology needed to serve these high-growth businesses. We are also the only online platform that provides multi-million dollar lines of credit in a very automated way.

3. Who is your “sweet spot” in terms of client companies?
The customers who we see benefit the most from our line of credit are high-growth product companies like consumer packaged good businesses in the natural foods or consumer electronics space with $1-10M in revenue. We also work with many B2B service companies in consulting, professional services, and logistics.

4. Do you have a success story to share about a P2Bi customer?
We have seen a lot of success stories in the past year. Two of our clients were included on Inc 5000s list of fastest-growing companies. One of our favorite success stories to share is an ice cream company out of Brooklyn called Phin & Phebes. They make delicious ice cream and have created a really fun, unique brand. Using our line of credit, they were able to move their production to a centrally located copacker and expand distribution. You can now find them in major retailers across the U.S.—a long way away from the farmer’s markets in NYC where they originally began selling their product.

5. Has P2Bi worked with any pet companies?
We have a company in our portfolio called Pipeline Pet Products that makes a few different USDA certified organic, natural pet snacks such as Green Bark Gummies. They’re actually about to launch a brand-new product called Terra Ultra that is a Free-Range Chicken pet snack that contains no corn, no soy, and no wheat.

6. What can an investor expect from a relationship with P2Bi?
Our investors enjoy a fast and easy investing experience using our proprietary technology as well as very competitive rates, diversification opportunities in a variety of industries, and an average of 30-90-day liquidity. We also have strict underwriting criteria and default rates that are lower than the factoring industry standard. Our investors are extremely active on the platform, and there is never a lack of capital in our crowd to fund our clients.

7. In your opinion, can you identify 3 or 4 qualities that make a small business successful?
I think success is measured for everyone differently, but at the end of the day if you’ve built the company you set out to and had some fun along the way, I’d call that a success. Entrepreneurship is a tough road, and while large exits are definitely a big plus—and probably why a lot of us launch these crazy companies—success really comes during the challenges and breakthrough moments you experience along the way. I’d say if you’ve built a team that you’re proud of, got your hands dirty in something that interests you or a problem you really wanted to solve, and got through all of it with only a minor tequila problem—that is success.

8. How does a pet company go about applying for a P2Bi loan?
Our typical loan size is between $200,00 up to $5 million. Our loans are backed by the applicant’s A/R and Inventory.  Go to Apply.p2bi.com and fill out the application and then someone with P2Bi will follow up within a few hours.

9. Anything else you would like to share with our readers?
I highly value diversity and have built a company that is 50% women on our wider team, on our leadership team and in our board room. I believe we make better decisions as a company because we assume less and listen more and value differing opinions and ideas.

Carol Frank of Boulder, CO, is the founder of four companies in the pet industry and a Managing Director with BirdsEye Advisory Group, where she advises pet companies in M&A transactions and Exit Planning.  She is a former CPA, has an MBA, is a Certified Mergers and Acquisitions Advisory (CM&AA) and holds Series 79 and 63 licenses.  She highly values and incentivizes referrals and can be reached at cfrank@birdseyeadvisory.com.