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2020 was a wild ride for small and mid-sized businesses nationwide, and the Small Business Administration's Paycheck Protection Program (PPP) has been a key part of that ride for the more than 5.1 million businesses that received PPP funds before lending ended August 8. Since then, a second round of PPP loans has been rolled out and applications are open until the program's extension date of June 30, 2021. Connecting business owners with lenders that could help them with application, approval, and funding was anything but straightforward. And the hurdles aren't over, with many business owners still left hanging with loan forgiveness technicalities. But certain lending companies have emerged as leaders in this unprecedented process, as evidenced by Best Company's 2020–2021 consumer reviews that explicitly mention experiences with PPP funding. And repeated themes across reviews reveal the most important elements that defined an experience as positive or negative. Read on to explore Best Company reviews statistics, themes, and analyses. With this knowledge, business owners can identify lenders to consider working with in the future, and lending companies can improve their processes for future large-scale business loan facilitation (of SBA loans and other loan types alike). Further PPP analysis Top praises in positive reviews Top complaints in negative reviews Which company performed best? Top praises in positive reviews Good customer service — 31 percent Specific comments within this theme include the following: Patient and helpful company reps Had their questions answered Had the process personally explained to them Received return calls and emails Was assigned a dedicated funding specialist for the entire process Received follow-up even after documentation was submitted The company stayed in touch even through obstacles like errors and delays Kabbage review: Customer Review: Karen from California "Ryan W. was a tremendous support for the stressful and sometimes confusing PPP loan application process. It was so great to connect with a live person who understood the challenges we were facing and guided us through the process." United Capital Source Review: Customer Review: Frederick from California "I worked with Jon B to secure a loan underneath the PPP program. Jon went out of his way to be helpful, and guided me through the process in an efficient and complete manner. Have nothing but positive things to say about my experience with United Capital Source." Speed and efficiency — 24 percent Specific comments within this theme include the following: Company identified a funding source quickly Received funding quickly (under 48 hours, within one week, etc.) Biz2Credit reviews: Customer Review: Jeff from Illinois “Wow. 2 days from application to funding of my PPP loan...I accidentally found Biz2Credit, and I'm so thankful I did. My loan specialist walked me thru everything, and answered whenever I called.” Customer Review: Ed from Oregon “My loan officer, (Joseph S) made everything run very smooth and was instrumental in helping me complete the required documents in a timely, professional manner. I had never applied for a business loan prior to this (so I have nothing to compare with), and I was very pleased to have someone willing to help me complete the application process for a PPP loan. From start to funding took less than 4 days. Impressed!!” Fundera review: Customer Review: John from Virginia “Matched me to a company that could handle my PPP Loan in a fast and efficient manner. Very impressed!!! Thank you for all of your help!!!!!!!!” Seamless application process — 18 percent Specific comments within this theme include the following: Utilized good technology Equipped to assist independent contractor/gig worker Well-explained interface for application Everything was accessible online Easy to navigate, submit, and sign Biz2Credit review: Customer Review: Vee from Louisiana “The PPP loan process was simple and straightforward, particularly for someone in my category. That is, an independent contractor/gig worker. The Biz2Credit system is set up in a way to help "micro" business owners. Staff was very communicative, not relying on just one mode of outreach.” United Capital Source review: Customer Review: Shabnam from New York “United Capital Source was able to apply for a PPP loan for me and it was approved! Their forms were all online and very easy to use and they emailed me for any additional files needed. The loan documents were also easy to sign and the money was in my accounts a few days later. All in all it was an excellent experience that could not have been easier. Thank you!” Improvement over another lender — 14 percent Specific comments within this theme include the following: Deemed ineligible by another bank or lender Another bank, lender, or local agency was not equipped to serve them Another bank or lender stopped taking applications Bank wouldn't help a non-customer "Ghosted" by another bank or lender Applied with multiple lenders and this was the quickest to respond Lendio review: Customer Review: Devon from California “I applied for PPP with 3 other companies and Lendio was a quick turnaround, within 24 hours.” Biz2Credit reviews: Customer Review: Michael from Nevada “My company's bank stopped taking PPP applications before I had my documents ready. My personal bank would not help me since my company accounts were not with them. Several other lenders also declined taking applications for non-customers. I tried another internet firm that submitted my package to a lender but I never was approved. With time running out I tried Biz2Credit who had an approval in 2 days.” Customer Review: Kalena from Florida “Biz2Credit helped my small business get a PPP loan. Three other lenders had simply given me the run around including Wells Fargo, my primary business bank for over 20 years.” Overall gratitude — 13 percent Specific comments within this theme include the following: Made the PPP funding possible Gratitude expressed to specific company reps Gratitude for help with loan forgiveness Initially rejected but the lender found a way to get it for them Relieved to be able to keep employees on the payroll or rehire them Kabbage review: Customer Review: Lee from Tennessee "Stephenie W. was terrific -- she really helped me out quite a bit and she was very patient and helpful...it wasn't until I reached Stephenie that I was able to find someone to assist. She basically made my PPP loan possible and I'm very grateful to her." Upwise Capital review: Customer Review: Robert from New York "Working with Upwise was a breath of fresh air during this crazy time. I tried applying for relief financing with my bank and in 6 weeks, got one email from them saying that they received my application for the PPP loan. At my wits end and not knowing what else to do, I found Upwise in a quick search and was so glad that I did. I was able to get Frank on the line who was very nice, personable and knowledgeable. He had me apply through an easy link, and I was approved and funded in just a few days! I'll be sure to be calling Frank again with any other financing needs I might have in the future. Thank you Frank and Upwise Capital, you guys ROCK!" Top complaints in negative reviews Poor communication — 44 percent Specific comments within this theme include the following: Handed from one company rep to another Calls or emails were ignored Hung up on by loan representative A scheduled call was canceled No communication after document submission 1-star review: Customer Review: David from California “Their customer service is ZERO. They were 100% nonresponsive, they failed to reply to an overnight letter, and email requesting a simple phone call. Their phones auto answers then times out and hang up. Because of their horrible service I was not able to apply for a PPP loan.” 3-star review: Customer Review: Christina from California “Our advisor was knowledgeable and helpful on our initial 2 phone calls. While not particularly timely, our advisor did follow up with us after our initial application attempts failed and instructed us to resubmit our loan application with an online vendor. While the subsequent online application was submitted successfully, that is where the contact completely stopped - I was not able to get a response from our advisor even one time after that application was successfully submitted but not processed due to lack of funds (1st round PPP funding ran out). The 3-star rating is only because our loan was ultimately approved during the 2nd round of funding, but we never received any more communication from our advisor while our application was suspended and we were waiting for additional funding.” Slow-moving process — 27% Specific comments within this theme include the following: Took a long time to process the application Took a long time to receive funding Lender was "sitting on" the approved money 2-star review: Customer Review: Louie from Florida “Application for our 3 corporations were submitted on 4/9/20 for PPP. It was handed from one representative to another. This happened 4 times. Documents were requested over and over again. I realized that only 1 corporation was processed and funded the last week of May. The other 2 PPP applications fell into the cracks. I have to diligently follow up every day and resent all documents again...Finally, after non-stop of emails, the two accounts were finally approved and funded the first week of June. I understand that this is a very busy time for [company] but customers need to be informed on what's going on with their applications. The portal is useless. It doesn't give you any updated information on applications. I was lost in the dark in this whole application process.” 1-star review: Customer Review: Amy from Texas “My credit union gave over our PPP loan to [company], as the 3rd party processor. I applied 6 weeks ago. Approved with [company] 4 weeks ago, and SBA 3 weeks ago. Still have not received my PPP. When asked if [company] was sitting on our approved money from SBA, earning interest, they would not answer. Small businesses are going under waiting to be funded and [company] is not releasing the approved money!!!!" Issues submitting documentation — 11% Specific comments within this theme include the following: Complicated or unclear process Asked repeatedly to send in documents Documentation was lost Lender didn’t include all information provided by customer for submission to SBA File mistakes were made Difficult to submit documents in different folders (rather than one) 1-star review: Customer Review: Jafar from California “The left-hand does not know what the right hand is doing. I had to resubmit the same document over and over again. The person who was working on my file did not even look at the emails and kept asking for the same documents. We had two companies and filed for both. For one mysterious reason, only one company was processed and I did not get a reasonable answer to why the other company was lost.“ 2-star review: Customer Review: Thomas from Georgia “Communication for my PPP loan was very difficult. All published phone and cell phones #'s either non-working or voice mail that does not get returned. Schedule a call form receives a response that parties are too busy and schedule call will be canceled. At the very last minute on my file mistakes were made and I was told it was too late to correct before the deadline, costing me several thousand in loan amount.” Failure to be approved — 10% Specific comments within this theme include the following: Denied because of claimed lack of documentation which actually was submitted No explanation for the rejection Approved for a smaller amount than expected Ran credit even when rejected for funding 1-star reviews: Customer Review: Cari-Anne from New Mexico “Wow! Received three different approval amounts for ppp Loan. The last amount was hysterical.. a few hundred dollars. This took about a month. Even though My client had an approval for 30,000.00 - it must be illegal. Called SBA and they said they must fund the letter of approval that they gave my client. They wouldn't respond to phone calls or emails. Finally received a response stating you are welcome to apply elsewhere even though they knew that most places had used up their funds." Customer Review: Alison from California “When I submitted my application, they wrote my application is under review and they will let me know if they need any additional information/documents. 48 hours later, I get an email that they have denied my request because my application was lacking information they requested. And very conveniently, there is no number to call to see what was missing and on their site, they write their decision is final. Yet, they still ran my credit!!!!” Website portal issues — 8% Specific comments within this theme include the following: Trouble logging in System errors Data was repeatedly lost System not user friendly 1-star review: Customer Review: Ivy from California “[Company] always has problems in logging into their website, lots of system errors and hiccups. Also it's really crappy when it's never on the same page as keeping the documents that as uploaded. I applied for my PPP here and had to reset password, security question countless times in order to login. Their system will automatically wash off all your data and report: No viewable loan after the next day. Helpless and careless employees when you call. I only got two answers from them: "reset your passwords" and " I don't know, reapply!" Which lending company performed best? Regarding the PPP reviews specifically, the average review rating for the top five companies reviewed is above 4 out of 5 stars. Due to their averages within the context of larger sample sizes, we can most confidently recommend Biz2Credit and Lendio. Click the company name to browse the reviews section for each company individually. Biz2Credit's average PPP review rating: 4.27 (75 reviews) Lendio's average PPP review rating: 4.11 (36 reviews)Upwise Capital's average PPP review rating: 5 (8 reviews) United Capital Source's average PPP review rating: 4.7 (7 reviews) Fundera's average PPP review rating: 5 (2 reviews) Who offers the best business loans? Overall rankings for all lending companies reviewed here (plus hundreds more) can be found on the best business loans landing page. Learn More
Pleasant Grove, UT - January 7, 2019 - Lendio has been named the 2019 Consumer’s Choice Award recipient in the business loans industry by BestCompany.com, an independent consumer review site. Lendio was selected to receive this recognition from among 116 other business loan providers based on a comprehensive market index score and the feedback of verified customers through reviews. "We wish to recognize Lendio with the Consumer’s Choice Award for 2019. They've earned it,” said BestCompany.com CEO Landon Taylor. “Our hope is that this recognition will highlight a company that is doing business the right way by taking care of its customers and always looking for ways in which it can improve." Lendio distinguished itself from its competitors by providing an impressive network of lenders, a simple application process, and quick funding. That, combined with an extremely high customer review score of 4.6 out of 5 based on more than 180 real customer reviews, propelled Lendio to an impressive overall score of 9.2 out of 10, the highest in the industry. "Just as BestCompany.com takes the guesswork out of finding a reputable business, Lendio takes the guesswork out of finding reputable business financing," said Brock Blake, CEO and founder of Lendio. "As a leader in the small business lending industry, Lendio places utmost value on customer trust and loyalty. It is an honor to be awarded BestCompany.com's seal of excellence.” To read consumer reviews for the top-rated business loan provider, view Lendio’s profile on bestcompany.com. For additional information and comparisons, access the full list of business loan companies considered for this award, as well as their respective scores and customer reviews. About Lendio Lendio is America’s largest small business loan marketplace and connects borrowers with a wide variety of financing, including short term loans, business term loans, SBA loans, business acquisition loans, and more. Since its inception in 2006, the company has facilitated more than 40,000 small business loans and over $1 billion in funding. Lendio’s network is comprised of more than 75 industry-leading lenders, including PayPal, Bank of America, American Express, Chase, Kabbage, Fundation, Headway Capital, Funding Circle, Lending Club, and more. For every loan facilitated on its marketplace platform, Lendio donates a percentage of funds to low-income entrepreneurs around the world through Kiva. Visit the company’s website to learn more about Lendio. About BestCompany.com BestCompany.com ranks and reviews companies across hundreds of different industries. Unlike many other review sites, companies listed on BestCompany.com cannot buy their position, nor is a company’s ranking manipulated or inflated by BestCompany.com for financial gain. Instead, a company’s ranking is based on BestCompany.com’s proprietary Best Rank algorithm, which is powered by verified customer reviews and an objective set of ranking criteria. For more information on how BestCompany.com scores and ranks companies, please visit the How We Rank page.
If you've heard of PayPal Working Capital, you're probably wondering if it might be a good financing option for your small business. The program, which began just two years ago, offers PayPal merchants (as in, merchants who use PayPal for their transactions) the ability to borrow up to 8% of their annual revenue and then automatically deducts a set percentage of incoming receipts until the loan is paid off. In its short time, Working Capital has already made $1 billion in loans to small businesses, as the company reported last week. And this isn't a huge surprise. PayPal Working Capital seems like a win-win for the company and merchants alike. The risk is low for PayPal-since they can see all of the historical cash flows of their merchants, they know exactly how healthy each one is. For merchants, the program is convenient and less expensive than many other financing options out there. The application process, for example, takes just minutes with no credit checks and no extra fees. Also, because payments are automatic and based on a percentage of revenue, merchants never have to worry about forgetting a payment or a payment causing them to be over-drafted. So is PayPal Working Capital the perfect lending option for a small business? As with so many things in lending, it depends. There are certain aspects of the program that make it not ideal for every small business. It pays to know about Working Capital's limitations before you go too far down the road of considering it for your small business. If any of these five drawbacks apply to you, you might want to pass on PayPal Working Capital: 1. You must have done plenty of business on PayPal Yes, the PayPal Working Capital application is fast. At an estimated five minutes and without the hassle and worry of credit checks, it's bound to get small business owners' attention. But there is a reason for that fast application process. When extending financing to a small business, PayPal doesn't go off of your credit score or many of the other factors that banks and other creditors use, as stated earlier. Instead, they go off of the money that flows through your PayPal account. For this information to be reliable, however, they need a significant amount of it. For this reason, if you want to qualify for the program, you must meet these requirements: "[Y]our business must have a PayPal business or premier account for at least 3 months and process between $20,000 and $10 million within those 3 months or within any time period less than or equal to 12 months." With requirements like these, your small business might not qualify. For instance, if you don't conduct business on PayPal, the program isn't for you. If you do business on PayPal, but it's only in small volumes, it's also not for you. But those aren't the only things that could disqualify you... 2. You have to pass PayPal's "mystery" requirements While the requirements above are clearly stated, they also seem to have some requirements that aren't so publicly stated. The complaint below, left on eBay community forum by an unhappy merchant, tells of this problem: "We do over $500,000 a year in sales and we were turned down after getting a msg from paypal telling us to apply. We spoke to paypal and of course they came up with various reasons such as maybe our business is seasonal or not enough cash flow... Both are wrong... After pushing submit we were immediately turned down within three seconds, so obviously none of our info was even evaluated... Getting the invite letter means nothing." The message of the story is, even if you get an email inviting you to participate in the PayPal Working Capital program, don't assume that you will qualify. While there are mostly positive reviews about the program, a significant number of complaints about the program targeted this very issue. When merchants are turned down, even when they meet the revenue and time on PayPal requirements, they often aren't privy to the reasons why. 3. The loan amounts might be too small for your needs Sometimes your business just needs a small infusion of cash to expand its capabilities or invest in better resources. For these situations, PayPal's program may be exactly what you need, since it allows merchants to borrow up to 8% of their revenue that goes through PayPal. But what about when you need a much larger small business loan? In this case, most small business owners are going to find that PayPal's loans fall short. Said one anonymous reviewer on SuperMoney.com: "Many of my small business owners friends have loved getting smaller loans through them, but I needed something larger at the time. They only give out loans up to a certain amount, and that number is smaller than ordinary lenders. From what I've heard, they're fast and easy to use, but they just didn't work out for my particular needs." 4. The APR is higher than some small business loans from your typical bank PayPal lets you choose what percentage of your revenue will be automatically deducted to pay off your loan, anywhere from 10% to 30%. As a result, the APR on a Working Capital loan usually ends up being about 15% to 30%. This is better than what you'll find on comparable lenders like Kabbage or On Deck Capital, which tend to offer APR around 40% to 80%. However, if you qualify, you're likely to find lower APR on a small business loan from your local bank or credit union. For this reason, it's highly recommended that you seek financing with a traditional lender before turning to online lenders, including PayPal Working Capital. 5. Once you get a PayPal Working Capital loan, you're stuck with it As you've probably gathered by now, PayPal's Working Capital program was designed to work within the confines of their service. If a merchant were to take out a loan through the program, however, and then stop using PayPal, the company would have no way to collect loan payments from the merchant. That's why, as part of the terms and conditions of the program, merchants agree to continue using PayPal until their loan is paid off in full. According to the company, if a merchant leaves PayPal before their loan is paid off, they must pay the full remaining balance immediately. If a merchant defaults on the loan, PayPal can seize funds from other bank or credit accounts connected to the merchant's PayPal account. In short, don't take out a loan with PayPal unless you plan to stick with them for your business' payment processing needs. Is PayPal Working Capital the right lender for you? If you process a high volume of your revenue through PayPal, you can live with the higher APR, you don't need a very large loan, and you're planning on using PayPal for a while, then the answer is probably yes. Barring any problems from those "mystery" requirements mentioned above. Seriously, at a time when small business loan requirements from traditional banks are getting tighter, if you fit the bill, PayPal Working Capital might be just what you need to keep your small business growing. To see how real customers rated PayPal Working Capital, visit our PayPal reviews page today!
When dealing with large banks, getting the funds your business needs can be a long and arduous process. Over the last several years, many alternative online lending companies have entered the scene to make the process of getting a loan easier and faster. Two of the largest alternative lenders, Funding Circle and Lending Club, offer similar low interest rates and high loan amounts. When comparing companies, the question becomes: which one is right for you and your business? We put the companies side by side so you can see for yourself. Funding Circle Funding circle offers an alternative to to traditional banks for business loans. Funding Circle features peer to peer loans up to $500,000 with repayment terms from 1 to 5 years. These of loans are good for financially stable companies or franchises that want to expand. To date, Funding Circle has provided over $2 billion in loans to help small businesses. How To Qualify To qualify with Funding Circle, borrowers must have a minimum credit score of 620, the business must have been in operation for at least two years, and the revenue must be at least $150,000 per year. Additionally, a borrower must not have filed for bankruptcy within the last 7 years and must provide a personal guarantee. Application Process The online application only takes about 10 minutes. On the same day that you submit the application, you will hear back from a loan specialist who will ask you to submit documents for verification of the application. Once you are approved (usually within 72 hours), you will receive the funding in 10 to 14 days. What It Costs Funding Circle is transparent about its interest rate information. According to the company's website, interest rates range from 5.49% to 18.29%. If a business decided to take out a $100,000 loan over a 12 month term, the borrower would pay just over $0.18 on the dollar. Funding Circle also charges a one-time origination fee from 0.99% to 4.99%. However, there are no prepayment penalties which can help borrowers save on interest should they choose to repay the loan early. Summary Must have strong credit and revenue Loans up to $500,000 Quick and easy online application Check out our Full Review of Funding Circle. Lending Club Lending Club is a peer to peer lending company that offers business loans from $15,000 to $300,000 and lines of credit from $5,000 to $300,000. Loans from Lending Club are typically for well established businesses with good finances who need quick capital or want to expand. Since its launch in 2007, Lending Club has issued over $16 million in funds. How To Qualify In order to qualify for a loan from Lending Club, the business must have been in operation for at least two years and have at least $75,000 in annual sales. Additionally, the borrower must own at least 20% of the company, have no recent bankruptcies or liens, and have a personal credit score of at least 600. Application Process The online application can be submitted in 5 to 10 minutes for pre-qualification. After submission, you will receive a quote for a loan. Once you are approved for the loan, you will be required to submit documentation for verification. The funds may be delivered to you in as little as two days or as many as 14. What It Costs Lending Club charges interest rates ranging from 5.9% to 21.6%. For a $100,000 loan over a 12-month term, the APR amounts to $0.32 on the dollar. These rates are slightly below the industry average. Like Funding Circle, Lending Club charges a one-time origination fee ranging anywhere from 0.99% to 5.99%. This origination fee is deducted from the loan principal. Summary Must have fair to strong personal credit Loans up to $300,000 Fast online application and approval time Check out our Full Review of Lending Club. The Bottom Line These two alternative lending companies are quite similar on many points. Both lenders offer terms of 1 to 5 years, and they both charge similar origination fees. However, Funding Circle has the advantage with lower interest rates and a higher maximum loan amount. At the end of the day, your approval, rates, and terms will largely depend on the decision of the underwriting team of either company. It may be a good decision to get quotes from several different companies. Check out our Top Rated Business Loans Companies.
The small business lending landscape is changing. According to a 2014 report from Ernst & Young, "nearly one in five [small businesses] reports having changed its primary bank in the past year." The reason: access to capital; an increasing number of small business owners feel they can no longer rely on traditional lending channels to provide needed funds-regardless of a long-standing history with the bank or other provider. And the feeling is mutual; not only are small business owners departing from traditional lending routes, but banks are also losing interest in lending to small businesses, in favor of larger corporations with greater borrowing potential. Not to say the demand for small business loans isn't there; it's the supply of traditional lenders that's running out. For example, in 2013, the Small Business Administration only approved 13 percent of applicants seeking a small business loan. The lack of response from traditional lenders has opened the door for a number of alternative lenders to pick up the slack. This group includes venture capitalist firms, peer-to-peer lenders, direct lenders, and crowdfunding. Companies like CAN Capital, OnDeck, and Lending Club are also meeting the demand of small business borrowers by providing more flexible terms, and faster access to capital. To be clear, not all banks offer unreasonable terms meant to deter small businesses; in fact, banks tend to offer much lower interest rates than alternative lenders. But interest rates aren't everything. In fact, more and more small businesses are willing to absorb higher interest rates in exchange for these other perks offered by alternative lenders: 1. Alternative Lenders Are Faster than Banks One area in which alternative lenders are literally outpacing traditional banks is in how fast they can transfer funds to their customers. The top business lenders have streamlined every step of the process by shifting their platforms online. Now, rather than filling out stacks of complicated forms and paperwork, customers can answer a series of simple questions about themselves, their business, and the size of the desired loan; instead of waiting months just to see if they've been approved for a loan, borrowers can know within hours, and receive funds within days-not months. Application According to an article from NerdWallet, the process of applying for a bank loan for your business can be both lengthy and complicated. "Expect to spend 25 hours or more just taking care of the necessary paperwork," the article warns. Borrowing through an alternative lender, meanwhile, can take as little as 10 minutes. Approval and Disbursement NerdWallet also estimates that borrowers will have to wait anywhere from two to six months for a bank to both approve the loan and disburse the funds. According customer data from one alternative lender, some customers achieved pre-qualification status within a hour, and customers on average will receive funding in as little as 11 days. 2. Alternative Lenders Have Lower Requirements than Banks One of the main reasons why alternative lenders can get funds to borrowers faster is because of their less stringent applicant requirements. Since the 2008 recession, banks have upped their lending restrictions so as to only approve what they consider "low-risk" borrowers. This status applies to business owners with excellent credit, whose businesses are well established and not struggling financially. By this standard, many small businesses are considered high-risk, and will have no success obtaining a loan though traditional means. Alternative lenders have remedied this problem by offering lower requirements and more flexible terms, the tradeoff being they charge higher interest rates than traditional banks. Credit Score To receive a small business loan from a bank, you need excellent personal credit. Maintaining good credit indicates to lenders that you are a reliable borrower, that you'll pay off your loan within the terms set by the lender. Business Finance says a credit score of 800 will get you a loan practically everywhere; 700 is considered ideal by most banks; and most banks will not approve an application for anyone with a credit score less than 640. On the other hand, alternative business lenders provide options to borrowers with personal credit scores as low as 550-some will even provide working capital loans to borrowers with a score of 500. Time in Business It's no secret to those in the small business realm that a significant portion of small businesses will fail within the first few years. The SBA reports that half of businesses will fail in their first year. One of the main contributing factors to this statistic is the fact that business owners are poor money managers; they can't pay their bills, or they invest their capital in areas that don't produce scalable results. Not surprisingly, traditional banks see businesses that have been around for at least two years as good investments, and younger businesses as statistically bad investments. Not the case with alternative lenders. The top business loan providers will offer options to businesses at nearly every stage of their development. Many of these companies provide terms to businesses as young as four months! Business Revenue Another important metric banks look at before approving a loan application is how much revenue your business brings in. Simply put, the more money your business makes, the more you can borrow, and the more money the bank will be able to collect in interest. A report from Inc.com claims that in order to qualify for a typical bank loan for your small business, you'll need to be making at least $250,000 in annual revenue-not exactly an obtainable figure for many new businesses. Alternative lenders, meanwhile, will accept applicants with limited resources; and while no company can offer a term loan to a business with anything less than $100,000 in annual revenue, they do provide merchant cash advances to companies that make at least $55,000. 3. Alternative Lenders Require Less (or no) Collateral Speaking of lower lending requirements, a big reason why alternative lenders are becoming a more attractive option is that few of them require collateral. Simply put, collateral is an asset the borrower promises to give the lender in the event that the borrower cannot pay back the loan. There are two types of collateral a bank may require you to borrow against before you can qualify for a loan: personal collateral refers to an asset such as a home or car that can be transferred to the bank and sold; business collateral refers to assets directly associated with the business. Nearly every bank requires some type of collateral before approving a loan. For example, Wells Fargo and Bank of America both require business collateral, while KeyBank requires both business and personal collateral. Meanwhile, top alternative lenders require zero collateral. While dedicated small business lenders are a good alternative to traditional banks, not all alternative lenders are created equal. Some lenders, while offering flexible terms, will also charge hefty origination or prepayment fees. You'll also need to pay close attention to the lenders cents on the dollar, as well as your overall likelihood of getting approved. For a full list of the top small business lenders in the industry, click here.
It's another one of those nights: you start the day completely enthusiastic. You shower, put on your Sunday-best clothes, and think to yourself, "this is the day!" As you knock on the door, you hope against hope that this first encounter will lead to a profitable relationship . . . . . . and then you get REJECTED! No matter what you do, no matter how many doors you knock on, phone numbers you call, how much sweet-talking you do, you can't seem to engage the interest of anyone. "Is it the way I look?" you might ask. "The way I talk?" Before too long, you've decided that you're next best chance at really connecting with someone is to take your efforts online. I am, of course, referring to applying for a business loan. Though, come to think of it, applying for a business loan and dating actually have quite a few things in common: 1. Your Credit Score Is Really Important Wait. I thought we were talking about business loans and dating. Well, we are! According to The Washington Post, the quality of your credit score is actually a pretty accurate indicator of your future success in love. In general, people with higher credit scores tend to maintain longer lasting, more committed relationships than those with lower credit scores. Using over 15 years' worth of consumer data from Equifax's archives, the Federal Reserve Board surmised that people with a credit score of at least 700 at the end of the year were more likely than not to form a relationship during the following year (graphics courtesy of The Washington Post): And not only are these high-scoring couples getting together, but they are also staying together. As credit score increases, the Fed reported, the likelihood of separating decreases: The takeaway here? Having a good credit score indicates to both potential lenders and potential suitors that you know how to take care of your finances and that you are worth investing in. And as the number one problem for couples in America continues to be money, you can rest assured that seeking someone with a high credit score (while maintaining a high credit score yourself) is as good as gold. Of course, having a good credit doesn't necessarily guarantee that you'll find the man or woman of your dreams, just as it doesn't guarantee that you'll secure the exact business loan that you're looking for. But a good credit score can go a long way towards both your relationship and small business goals. 2. Both Are Worth Planning for You may have heard the saying, "a failure to plan is a plan to fail." The same could be said for both dating and applying for a business loan. Think about it: if you really want to get serious about your romantic life, would you really want to throw caution to the wind and "hope for the best"? In the short-term, it means actually planning your date ahead of time - no last-second invitations - and if you do get her to agree to a date, it's crucial you have some type of game plan other than, "watch me play video games," or "hang out for hours." According to Online Dating Magazine, failure to plan your dates in advances warrants a potential partner's automatic rejection of future dates. In the long-term, it means having an idea of where you want the relationship to go, if anywhere; you don't have to start naming your kids, but being clear about your expectations from a relationship will give you much better chance of securing one. The same things are true with business loans. Business.com warns small business owners against not being prepared for the loan application process. If you don't have a detailed business plan stating what you have to offer and what you expect do to with the money you're being lent, no one will lend to you. It's also important to present your lender with a plan for how you intend to pay that money back. Just like having a good credit score tells lenders and dating partners alike that you are responsible with your money, having a plan in place will demonstrate that you have a clear vision moving forward - and you want them to be a major part of it. 3. Flings Are Great! But They Have Consequences Whether you've seen a movie about it, or have a friend who's had one, the fling or the one-night stand remains one of the most (pardon the pun) romanticized and even stigmatized areas of the dating world. The basic idea involves a person who - either by choice or perhaps inebriation - will lower their temporarily lower their standards and their inhibitions in exchange for one night of supposed bliss with someone else. According to one statistic from Statista, nearly 60% of Americans have admitted to participating in such encounters: But just because so many people are doing it, does that mean it's worth doing? According to a study by researchers from Durham University in England, feelings following one of these encounters are generally negative. Nearly half of the women studied reported feelings of loneliness, emptiness, and even cheapness after a one-night stand; while the experience was fun in the short-term, it had some devastating long-term effects. Short-term loans can carry a comparable burden. A piece by Entrepreneur.com suggests that when you take out a short-term loan without reading the fine print, you could be paying for a lot more than you think. Interest from a short-term loan can actually compound at a much more aggressive rate than a regular business loan, especially when you request repeated extensions. So while they are great for fast cash, they can quickly get out of hand (almost as if that person you met last night turns out to be a serial stalker). The Asbury Park Press further warned against "fast, easy [short-term] loans" whose APRs can be as high as 50% or more. Unless you plan to have your short-term loan paid off in under a year, you might find yourself the victim of "unintended consequences," to put it lightly. 4. Don't Worry: There's Someone for Everyone So, after you first few rejections, you might get the feeling that you'll never find "the one." But as the song goes, you really might be "looking for love in all the wrong places." As the online dating market expands, the number of ridiculously specific online dating sites has increased. If traditional dating is not for you, you might try your luck with one of the following: Purrsonals.com - A dating site dedicated to cat lovers looking for love Amish-Online-Dating.com - A site for, you guessed it, the Amish. Although, you have to wonder what the Amish (a people who shun technology) are using to access the site. ClownDating.com - As scary as it sounds. FarmersOnly.com - "You don't have to be lonely at FarmersOnly.com." And the list goes on (and on, and on) . . . Believe it or not, there are third-party business loan sites that work very similar to these online dating sites. Magilla is one of these companies; it matches borrowers to potential lenders through its online apps. Just like with a dating app, borrowers create an online profile, answer 10 simple questions (including their business type, the amount of money they're asking for, and other preferences), and then they are given a list of potential lenders who might consider offering them a loan. So far, Magilla has connected lenders to borrowers seeking $55 million in loans! 5. Both Require Research When you think about all the social media technology out there, there really is no such thing as a "blind date" anymore. In many ways, dating has become more or less like online shopping; when we are surveying a potential partner, we study their social media profiles just like we would a product description, and dig through the comments section just like we scour product reviews. We peruse photos, interests, status updates and tweets, mutual friends, ex-girlfriends and boyfriends - all before we even meet the person face-to-face. According to an article on Mashable, one in four people send a friend request on Facebook before the first date. Long story short, we want to know as much about a person before we decide to pursue a relationship with them. Why should things be any different with a business lender? Here at bestcompany.com, we've done the back-breaking research for you. We've reviewed dozens of business loans companies using an expert-driven ranking criteria system, so you'll know who you're "getting into bed with" before you sign the dotted line.