QuarterSpot launched an online lending application for small businesses in 2013. The company provides loans to businesses in certain parts of the U.S. of up to $150,000 for term lengths of 9, 12 and 18 months. Customers fill out an online application and upload their last three business statements.
In a press release, QuarterSpot states it uses artificial intelligence to search applicants’ bank information, customer reviews, information on social media sites, and other data to make fast pre-approval decisions. “The resulting organic data set is much deeper and broader than available commercial credit scores and gives us a more detailed picture of the creditworthiness of a business,” said QuarterSpot CEO and co-founder Adam Cohen.
QuarterSpot focuses on the financial health of applicants’ businesses, not their personal credit history; although the company does require business owners to have a minimum personal credit score of 580. To qualify for a loan, businesses must have an average monthly bank balance of $2,000 based on the most recent 90 days of bank data and make at least 10 sales per month.
QuarterSpot loans money to companies that have only been in business for a year and have monthly revenues of as low as $8,000, so it is a potential funding source for new businesses and very small companies. There is not a lot of information on QuarterSpot’s website or in the media about the rates for its loans, but the company does list some attractive features for businesses looking for funding from non-traditional lenders:
Fast and Easy Application Process
Businesses can apply on QuarterSpot’s website to see if they pre-qualify for a loan in as little as 30 seconds. QuarterSpot states its online loan application takes only a few minutes to complete and businesses receive a loan offer within 24 hours. Once the loan terms have been accepted, businesses can receive the funds as quickly as one business day. QuarterSpot’s loan application process does not require a lot of paperwork. Businesses only need to submit their last three business statements.
Interest Rates Decrease
Interest is charged only on the unpaid principal of the loan, so as you pay off the principal, the amount of interest you are charged will decrease.
- No Personal Guarantees: QuarterSpot does not require personal guarantees from business owners, so you will not be required to use your personal assets to pay back a loan.
- No Personal Credit Checks: QuarterSpot does not check business owners’ personal credit. Decisions about loans are made based on QuarterSpot’s decisions about the financial health of the business only. The company also does a “soft” credit check so it does not have an impact on your personal credit score.
- No Prepayment Penalties: There are no penalties for early payment of loans.
- No Liens: QuarterSpot does not place liens on its customers’ businesses when it provides funding.
Experience working with Small Businesses
QuarterSpot’s co-founders Adam Cohen and Lance Emanuel ran the company GotCoders before starting QuarterSpot, where they specialized in helping startups and small businesses develop their business and marketing strategies.
QuarterSpot does not provide much information on its website about the cost of its loans, although it claims to provide attractive financing rates compared to other alternative lenders. With no prepayment penalty and interest rates that decrease as the principle is paid down, a loan from QuarterSpot may be more affordable than loans from some other lenders. Businesses would need to complete the application process, which only takes a few minutes, to find out if the terms QuarterSpot offers will work for their funding requirements. Other concerns include:
There is not enough information on QuarterSpot’s website to determine what kind of payment terms you would receive before you apply for a loan. The company does not list a range of interest rates or APRs for its loans or specify what kinds of fees it charges or what percentage of the loan amount covers its fees. The only information on QuarterSpot’s online site about rates states that it charges as little as 12.5 cents on the dollar, but there is no information about how businesses qualify for that rate.
Better Information about Loans
Before they apply for a loan, customers should be able to access information about the rates and any fees that QuarterSpot charges. With the scarce information the company includes on its site, it is not possible to determine if QuarterSpot is an affordable funding source compared to other lenders. The company claims it “can reduce borrowing costs by as much as 85% compared to other well-known online lenders”, but it does not provide any data about the cost of its loans to back up that claim. QuarterSpot does not provide information about how many businesses it has loaned money to or how much money it has loaned. The company also does not list what industries it provides loans to or what industries do not qualify for its loans.
Not Available in All 50 States
QuarterSpot currently only loans to U.S. businesses and it does not loan to businesses in the following locations:
- District of Columbia
- North Dakota
- Rhode Island
- South Dakota
*Star Rating is determined by evaluating APR range, minimum credit score requirement, revenue requirement, length in business requirement, and other related approval data.