Formally known as Retail Capital, Credibly is a small business lender that helps businesses navigate the murky underworld of alternative funding. The company has been in business since 2010. Like most alternative funding companies, Credibly helps customers who are under-served by banks and works hard on underwriting procedures to provide business owners with viable alternatives to conventional business loans.
Consumers that choose Credibly should remember that they must have a credit score of 550 or higher.
There are several benefits to choosing Credibly as your alternative funding source. To start, Credibly puts its application requirements and rates online for everyone to access. This may seem like a simple thing, but when you look at companies across the business loan industry, only a handful display this information.
Credibly's "six months in business" minimum is great for startups, and the fact that the company does not judge borrowers solely based on their credit score is nice for small business owners looking to start over. Personal credit checks are done by soft pull during the application process, but borrowers do not have to provide lengthy credit card statements and financial documentation.
In an effort to be as transparent as possible, Credibly helps businesses research the best options they qualify for. The online application makes it simple to explore the options without hurting your credit score. In addition to working capital, Credibly also provides access to SBA loan programs, equipment financing, lines of credit, credit invoicing, and other flexible financial solutions.
Credibly's application process is relatively quick; the company only requires a simple one-page application after filling out the online form, while other lenders (especially banks) have lengthy paperwork processes for small business loans. Approval can be received in as little as 24 hours, and within another 48 hours, borrowers can receive access to their funds. With traditional banks and other financiers, it can take as long as 30 days to receive approval and access to funds.
Interest rates with Credibly range from 9.99 to 36 percent, which is relatively high when compared to industry averages. Further, the company charges an origination fee of 2.5 percent of the total loan amount and loans require a personal guarantee, which means that if the borrower cannot pay back their loan, the company can collect on the borrower's personal real estate and bank accounts.
Credibly offers merchant cash advances (MCAs), which is a type of financing that is not a loan, but rather a sale of future receivables. Typically, small businesses use these resources to bolster their payroll, make short-term capital expenditures, and pay for other resources that are considered "short term." However, MCAs take away from a company's future credit card receipts, a vital source of revenue for small businesses, so there is higher risk involved.