StreetShares Incorporated was founded in 2014 as a small business funding marketplace. Motivated by a knowledge of the difficulties small businesses face today in obtaining funding from big banks and a firm belief in the power of entrepreneurship, the co-founders of StreetShares set out to create an auction-like system that allows investors and borrowers to connect. Today StreetShares offers loans to all types of businesses seeking investment, with a special attention given to veterans seeking funding for their small businesses.
StreetShares is an alternative to the typical and limiting process of borrowing loans from big banks, and gives businesses access to quick money with limited requirements. As proclaimed on their website, StreetShares is “Shark Tank meets eBay”—meaning that the concept of each business borrowing is as much an important component of the StreetShares borrowing experience as the connection between investors and businesses. Benefits of the Street Shares platform include:
One of the best things about StreetShares is transparency. When compared to banking institutions that offer business loans, StreetShares is revolutionary in its transparency, and borrowers can benefit from finding out specific details about their loans from the get-go. The FAQ section on the website offers answers to most questions that prospective buyers would have, and the answers they offer are quick and to the point.
Varying Loans Offered
The only answers StreetShares cannot offer on the website are not available due to the varying nature of loans that StreetShares offers. Instead of providing standardized interest rates, StreetShares loans vary because they are offered by investors who set their own interest rates. Borrowers can rest assured, however, that StreetShares always chooses the investor who offers the lowest interest rate before pairing a business with an investor.
StreetShares has a very clear focus on helping veteran-owned small businesses. The entire project of StreetShares was started with an intention to help veterans looking to start their own businesses. With a unique focus and understanding of the challenges that veterans face in business endeavors post their service, StreetShares offers an innovative loan experience to veterans who may not be able to receive loans elsewhere. StreetShares also utilizes veteran investors to provide a unique community of entrepreneurially minded veterans.
One of the most noteworthy benefits of choosing StreetShares is the flexibility they offer. While big banks require rigid minimum credit scores and revenue minimums, StreetShares cares about the individual story of the borrower. This unique approach gives small businesses more opportunity for funding because a borrower’s eligibility to receive funding is not reduced to numbers such as credit scores and annual revenue. While these numbers may play some role in the loan approval process, StreetShares cares much more about a business’s potential than their numbers. Because of its size and its mission, StreetShares has the capacity to pay attention to individuals.
StreetShares also promises to let you know of your loan approval within 10 minutes after you have submitted an application. The application for a loan from StreetShares is free, and very simple. Prospective borrowers are required to provide:
- Business Tax ID
- Social security number of business owner
- Most recent personal and business tax returns
- 2 most recent bank statements
- Download of your business checking transaction history for past 6 months
- Total outstanding debt and monthly debt payments
Likewise, the requirements to qualify for a loan are very simple. Borrowers must be:
- A U.S. Citizen
- In business for at least 1 year
- Earning a minimum amount of revenue
- Incorporated (Single Member LLC is okay)
- Able to provide a business guarantor with reasonable credit
While the benefits of a small lending organization are clear, there are also a number of downsides that come from borrowing from a small lending company. StreetShares is upfront and transparent about these limitations and/or negative aspects in order to let borrowers make educated decisions. Other limitations include:
Maximum Loan Amount
Borrowers will find that one of the biggest downsides to borrowing from StreetShares is the maximum amount of money that can be borrowed. Currently, borrowers are allowed a maximum of $100,000, making StreetShares a less desirable place to borrow money for many businesses who require more funding.
Loan periods are also limited, offering only 6-month, 1-year, 2-year, or 3-year borrowing periods. While these time constraints may suggest that borrowing and repaying money from StreetShares is a quick and short-term borrowing experience, it also limits borrowers who may have more long-term needs for their desired funding. In short, borrowers looking for large investments with slow repayment plans, should not consider StreetShares.
In addition to these borrowing limitations, StreetShares also has a strict system for repayment. Repayment requires a fixed, weekly payment that comes from the company checking account on file. This weekly payment is a mandatory method of repayment and may not be ideal for certain borrowers who would prefer monthly payment options. If the weekly payment fails for any reason, borrowers will be required to pay a $10 fee. An additional $10 fee will be charged for every additional week the payment is not received. These fees, while small, could deter some borrowers who may anticipate a problem with weekly fees.
StreetShares also charges a one-time origination fee of either 3.95% or 4.95%. This number varies on many factors and is pre-disclosed before the loan is disbursed.
*Star Rating is determined by evaluating APR range, minimum credit score requirement, revenue requirement, length in business requirement, and other related approval data.