Former BofA CEO-backed fintech launches to match SMBs with lenders

Foro, a fintech backed by a former Bank of America CEO, on Wednesday announced the launch of its national commercial lending platform designed to guide small business owners through the commercial lending process and match them with banks.

Hugh McColl Jr., who helped transform Bank of America into a financial giant before retiring in 2001, became a founding investor in the fintech after a business partner drew his attention to the Charlotte, North Carolina-based firm’s mission. 

“It immediately piqued my interest because of the tremendous need for financing for small business, particularly minority businesses,” said McColl, who is a partner at Bright Hope Capital, a firm he helped launch in 2021 that invests in minority-owned businesses. “What we want to do is to put people that want to lend money together with people who need money. It’s not complicated.” 

Foro, which has secured $8 million in Series A funding led by TTV Capital, with participation from Fin Capital, Correlation Ventures, AME Cloud Ventures and U.S. Bank, was founded in 2019.

The startup aims to remove the friction most small businesses face when seeking a commercial loan – a process, which, according to Foro CEO David Godsman, has been ripe for digital transformation for some time.

A headshot of Foro CEO Dave Godsman.

Foro CEO Dave Godsman

Permission granted by Foro


Godsman, whose career spans positions at Citigroup, peer-to-peer payments platform Zelle, Bank of America and the Coca Cola Company, said the commercial lending process is often labor intensive and outdated, which can be daunting for small business owners.

“Banks have effectively transformed themselves on the consumer side and in many parts of the commercial side, but you still have this scenario where the process of a business owner trying to determine who would be their best partner to work with them to help them grow their business is somewhat archaic,” said Godsman, who joined Foro in 2021. “The original thesis behind the business was the belief that businesses deserved a better commercial lending process, and one that enabled accessibility and equality for any business owner who was seeking capital.”

Foro aims to serve small and middle-market borrowers looking for loans of $1 million to as much as $25 million. That range requires complex underwriting, a differentiation that sets Foro apart from other online small business lenders, Godsman said.

“Platforms that are optimized to help a business get $100,000, typically are very automated. It’s driven by the FICO score of the business owner,” he said. “We’ve moved upstream and we believe we can apply a lot of the same methodology in creating a better experience for business owners who, arguably, are even more interesting for lenders because of their size and scale.”

Playing matchmaker

Godsman declined to share specifics about Foro’s revenue model, but said the platform is lender funded.

Bank’s tell Foro the type of industries or geographies they’re interested in, and Foro filters and curates businesses based on those needs, Godsman said. 

“We have a very healthy lender network that covers the entire spectrum of needs of the business owner,” said Godsman. He declined to share the number of lenders Foro is partnering with, but said the platform’s participants range from Top 10-oriented firms to regional and community banks.

“We don’t just think of banks as potential partners that help to fund our model. We actually hope to design a lot of the experiences that we’ve built into our platform, based on how they operate or how they might want to operate,” he said. 

The platform also aims to solve pain points banks face in the lending process, such as overexposure in a singular market, McColl said.

“I think what Foro will do is allow them to access loans and markets that are outside their normal trade area. A lot of banks are in areas where they have been able to build up very good deposit bases, but have very little loan activity,” he said. “This is a way they can acquire financial assets and put their own rules on it.”

Blind date

Foro aims to eliminate bias by anonymizing the initial part of the process, Godsman said. 

“In the beginning, we don’t share with the lenders the name of the business owner or the business – we give them the shadow profiles and the data points that matter for them,” he said. “We do that to try to help remove some of the subjectivity that has existed for a very long time in the space.”

Once the two parties have been introduced, Foro shares the small business owner’s contact information with the interested bank.

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