This Black-led fintech has distributed over $9 billion in funding for small businesses

BY Preta Peace Namasaba March 26, 2024 10:42 AM EDT
Everett Sands. Dallas Innovates

Although there are federal laws that offer protection against lending discrimination, the lingering effects of redlining continue to disadvantage Black borrowers. Black loan seekers have a 10 percent lower loan approval rate than their white counterparts and higher interest rates cost African Americans $765 million in extra interest annually. In addition, bank branch density, local banking concentration in the residential mortgage market, and the growth of local businesses are markedly lower in majority Black neighborhoods. These systematic inequalities significantly contribute to the homeownership and racial wealth gap, ultimately limiting economic mobility.

Lendistry, a Black-owned fintech is putting the best interests of Black entrepreneurs at the forefront and supporting their financing needs to help them scale through the growth stage. It provides short-term loans and other types of financing to small businesses to finance new projects, purchase new equipment, and other business operations. The company has funded over 600,000 small businesses and provided over $9 billion in funding across all 50 states.

“One of the things that’s been part of my career is thinking about access to capital as skill and thinking about access to capital that for underserved communities. I think about it in three different ways. I think about it as Product, a process and a policy question, and those are the three things that I am typically working on,” Sands said about the importance of funding for Black owned businesses.

With over two decades of experience in lending, Everett Sands founded Lendistry in 2015. He served as a Board Member and an Executive for two minority deposit institutions that he helped to grow exponentially. He joined Wells Fargo, where he grew a Washington, D.C.-based team to grow from 6% to 26% market share in one year. He was promoted and went on to Orange County where he grew an origination team from $150 million per year to $490 million in one year. Although he was in the top one percent at Wells Fargo, Sands felt he was just a token and set out to leverage his finance knowledge for the benefit of the Black community.

He started Lendistry to make funding more accessible and affordable for small business owners especially those in underserved communities. The fintech employed strategic partnerships essential to deploying capital since it  wasn’t a bank and didn’t take deposits. Lendistry developed proprietary technology to make the process accessible to anyone and to empower the team to walk applicants through the process. It set out to meet business owners online, offering loans in lower amounts with underwriting processes that give them a fair chance, and also providing a community bank experience.

When the COVID-19 pandemic started, Lendistry’s business model was ideal for responding to disruption. The team had grown to about forty people in two offices in Southern California. The fintech had secured both Community Development Financial Institution and Community Development Entity approvals, reached 2nd place ranking among SBA Community Advantage lenders nationwide and received membership to the Federal Home Loan Bank of San Francisco. Its strategic partnerships with banks and government agencies put it in an optimum position to step up and provide a rapid solution, especially with the Paycheck Protection Program (PPP) and grant programs.

In 2020, Lendistry was charged as the intermediary responsible for disbursing $500 million in COVID-19 grants to California small businesses and non-profits. After successfully distributing the grants on behalf of the California Small Business COVID-19 Relief Grant Program, the fintech was tasked with administering $2.075 billion – quadruple the original amount. It provided grants ranging from $5,000 to $25,000 for qualified small businesses and nonprofits with $50 million allocated specifically for California nonprofit cultural institutions. Lendistry provided PPP loans to small businesses across the United States during the pandemic and became a top ten PPP lender in the country in 2021.

Lendistry has prominent clients like Amazon on its roster and has closed several strategic partnerships with over 34 community and national banks. The fintech runs a customer-centric ecosystem, focusing on the needs of clients and customers as the basis for its technology which has allowed it to grow and build trust in the community.

“Underserved communities don’t have bank locations in their neighborhoods, and even if they did, today’s business owners are too busy running their businesses during bank hours to go in for help applying. Systemic biases still cause minorities and women business owners to be seen as riskier, making them less likely to get approved even if they can find a bank to partner with. Lendistry was created to overcome all of these barriers,” said Sands.