Business Finance 101: 5 Loan Options That Will Benefit You
[This article was written by Tarah Mills.]
Does your business currently need some extra cash-flow to help bring in new inventory, cover accounts payable, expand to a new location or launch a new marketing campaign? If so, it’s probably time to look into a business loan that suits your needs.
Taking out a business loan isn’t something any business owner should rush into. You need to find the best option that gives your business the cash you need at rates that won’t break the bank. Here, we’ll take a look at five of the best loan options you can find that will benefit you and your business.
1. Funding Circle
Funding Circle makes the list because they have some of the best small business loans on the market. They boast requirements for qualifications that are broad enough to suit most businesses while offering rates that compete with almost any other lender.
They offer business loans anywhere from $25,000 to $500,000. Terms will vary between six months to up to five years. If your business credit is solid, you can qualify for a six-month term with a rate as low as 4.99%. For those that don’t have great credit, you can still qualify for a loan of up to five years. However, depending on your credit score, the rate could go as high as 27.79%.
The origination fees vary from less than 1% up to 6.99%. Again, your credit history will determine how high this rate is. You’ll need a credit score of, at minimum, 620 in order to qualify for a loan. In addition, your business has to be in existence for at least two years consecutively.
What makes Funding Circle an interesting option is that it’s a marketplace for peer-to-peer loans. All Funding Circle loans are given by highly accredited small business investors who put their money into small businesses in America. Those who invest are able to choose who they fund by setting up specific criteria, or by choosing individual loans from the marketplace.
2. Credibility Capital
Business loans from Credibility Capital are for business owners with better-than-average credit. In fact, you’ll need to have a minimum of 650 credit scores in order to qualify. This is a higher requirement than the other loan options in this article. However, their rates are very competitive.
Small businesses can get loans anywhere from $10,000 up to $400,000, with terms available for one, two or three years. You will be charged a 3% one-time-only fee for loan origination. But you won’t be faced with any additional fees for prepayment. In order to get qualified, your business will need to generate positive, verifiable revenue and be in business for at least two years. Credibility Capital works with strong small businesses that are established and in a healthy financial position. If your business fits this mold, they’re a great option for funding needs.
3. OnDeck Capital
OnDeck is a solid option for borrowers with less-than-perfect credit. In fact, a business owner with a credit score as low as 500 can qualify. However, their interest rates can be quite high. If you have poor credit, you’re well aware of the limited amount of borrowing options you have. It’s common to pay a higher amount of interest when working with not-so-good credit. OnDeck’s average simple interest rate is 25.3%. Their annual rate is 48.7%. If you apply at OnDeck and get offer a rate that’s higher than you’d like to pay, take some time to consider if the lean is really needed before you accept. While it’s possible to qualify with a 500 credit score, their typical borrower’s score is over 660. Through OnDeck you can qualify for lines of credit or fixed-term loans. Funding typically occurs within 24 hours of your application approval. Term loans are available anywhere from $5,000 to $500,000 with an origination fee between 2.5 – 4%.
When you’re asking yourself in your small business what is a working capital loan, Kabbage steps up to the plate with a solid answer. If your business is seasonal or has inconsistent revenue periods, Kabbage will still take you seriously. As long as your annual revenue is over $50,000 or you’ve had revenue of $4,200 per month for the prior three consecutive months, you can apply on Kabbage.
You can also get lines of credit through Kabbage. The entire amount they approve can be taken in one lump, or you can choose an amount that’s lower, all depending on what you need. This can all be done on your smartphone or desktop. Loans through Kabbage go up to $250,000. Their business lines of credit have no minimum set. Available loans can be paid back in 6 month – one-year terms.
The benefit of Fundbox is that they have a lower set of revenue requirements and time-in-business than most of their competition. They offer approvals that are almost instant and fund the next business day. You can get a loan from $1,000 up to $100,000, with interest rates ranging from 4.66 – 8.99%, payable over 12 – 24-week payment periods.
Get the Business Funding You Need
These five loan options are some of the top business borrowers in today’s market. No matter why your business needs additional funding, one of these could be the solution you’re looking for.
Tarah Mills has always had a passion for writing. Her philosophy is that not only can writing be educational, but it can change the world. While she is dedicated to her work, she still enjoys a good game of basketball, curling up to a good book, and all things Star Wars. She currently resides in the Richmond, Virginia area with her family.