In the ever-evolving world of business, securing the right financial resources can be a game-changer. Small businesses often struggle to find the funding they need to grow, which is where Credibly steps in as a beacon of hope. In this comprehensive review, we’ll dive deep into the world of Credibly small business loans, covering everything from their offerings, eligibility, pros, cons, and how they compare to other lenders.
In a nutshell, Credibly earns a strong rating:
- Overall Score: 4.6
- Accessibility: 4.8 – Credibly offers loans and fast funding to a wide range of borrowers.
- Affordability: 4.4 – Credibly’s wide range of loans includes SBA loans, typically offering affordable rates.
- Transparency: 5.0 – Credibly’s website provides comprehensive loan details.
- Customer Experience: 4.3 – Credibly offers a fast online application and online account management.
- Flexibility: 4.6 – Credibly’s wide range of loan products caters to the needs of many small business owners.
Credibly’s small business loans are a versatile and accessible financial solution. Their relaxed eligibility requirements and fast funding make them an attractive option for many small businesses. However, prospective borrowers should be aware of potential fees and the high factor rates associated with these loans, which could impact overall borrowing costs. To make an informed decision, it’s essential to compare Credibly with other lenders to ensure it aligns with your specific financial needs.
Exploring Credibly’s Offerings
Let’s start by taking a closer look at what Credibly brings to the table:
Loan Range: $5,000 to $400,000
Interest Rate: 1.09 Factor rate
Term Lengths: 3-24 months
Minimum Annual Revenue: $300,000
Minimum Time in Business: 6 months
Credibly specializes in providing small business loans to companies with at least $25,000 in monthly revenue deposited into their business bank accounts. Their loan options encompass a spectrum, including working capital, business lines of credit, and merchant cash advances.
Who Benefits from Credibly
Credibly’s offerings cater to a specific set of businesses:
- Credibly is a lifeline for businesses in need of swift, short-term financing with flexible requirements. Unlike traditional banks and credit unions, Credibly caters to business owners with poor credit and minimal time in operation. Remarkably, it’s feasible to secure a loan with a credit score as low as 550 and a mere six months in business.
Who Credibly May Not Suit
Credibly’s offerings may not be a fit for everyone:
- New startups are not within Credibly’s purview. If your business hasn’t been operational for at least six months, you’ll need to explore alternative lenders. Additionally, Credibly specifies on its website that business owners require an annual revenue of $300,000 to qualify, equivalent to a monthly deposit of $25,000. If you fall short of this criterion, you may need to seek financing elsewhere.
- While Credibly’s loans may be a blessing for business owners seeking bad credit business loans, it’s important to note that their rates might not be the most competitive option for well-qualified borrowers who could potentially secure lower rates elsewhere.
A Closer Look at Credibly’s Offerings
Let’s delve deeper into Credibly’s loan options:
Working Capital Loans
- Loan Amount: $5,000 to $400,000
- Terms: 6 to 18 months
- Factor Rate: Starting at 1.15
Credibly’s working capital loans are tailored for short-term financial needs. They are particularly advantageous for those looking to reduce the overall cost of borrowing, provided you can repay the loan promptly. For longer-term loans spanning over two years, other options might be more suitable.
Merchant Cash Advances
- Loan Amount: Up to $400,000
- Terms: 3 to 18 months
- Factor Rate: Starting at 1.09
Credibly also provides merchant cash advances, allowing businesses to borrow against their future credit and debit card sales. The repayment includes the borrowed amount, fees, and factor rates. While this is a highly accessible financing option, it can be costlier, especially for those who don’t qualify for the lowest rates.
Business Lines of Credit
- Loan Amount: Up to $300,000
Credibly offers secured and unsecured business lines of credit through partner lenders. To qualify, a personal credit score of at least 600 is required, which is slightly higher compared to other Credibly loan options. Unfortunately, specific interest rates and repayment terms are not readily available on their website, making it challenging to make quick comparisons with other lenders.
- Loan Amount: Up to $400,000
- Factor Rate: Starting at 1.09
Invoice factoring involves selling invoices to a factoring company in exchange for an advance on those invoices. While it may incur higher costs, it’s an excellent choice for businesses in urgent need of cash to cover short-term expenses.
Credibly’s eligibility criteria vary depending on the loan product, but in general, to qualify for a business loan, you must:
- Be based in the U.S.
- Have been in business for at least six months
- Not have had any bankruptcies in the last three years
- Maintain a credit score of at least 550
- Achieve a monthly revenue of $25,000 or an annual revenue of $300,000
- Ensure that revenue is deposited in a business bank account
It’s important to note that Credibly may not offer all of its business loan products in every state.
Pros and Cons of Credibly
To make an informed decision, it’s essential to understand the pros and cons of choosing Credibly for your small business financing needs:
- Fast Funding: Credibly offers rapid approval with the possibility of funding in as little as four hours, including same-day options.
- Relaxed Eligibility Requirements: Credibly caters to business owners with poor credit and limited time in operation, providing accessible financing solutions.
- Variety of Loan Products: From SBA loans to merchant cash advances, Credibly offers a wide range of loans to accommodate diverse small business needs.
- Potential Fees: Depending on the loan, borrowers may encounter origination, administrative, or underwriting fees, increasing the overall cost of borrowing.
- High Annual or Monthly Revenue Requirement: Credibly mandates a substantial annual revenue of $300,000 or $25,000 in average monthly deposits for the past three months to qualify.
- High Factor Rates: Factor rates can significantly inflate borrowing costs. A low factor rate of 1.09 may turn a $100,000 loan into $109,000, while a factor rate of 1.50 would elevate the same loan to $150,000, not accounting for additional fees.
Credibly in Comparison to Other Lenders
To help you make the best decision for your business, let’s compare Credibly to other lenders:
Credibly vs. Fora Financial
Both Credibly and Fora Financial cater to borrowers with poor credit and short-term financing needs. While Credibly offers more types of business loans, including working capital loans, merchant cash advances, business lines of credit, and invoice factoring up to $400,000, Fora Financial extends small business loans and revenue advances up to $1.4 million. Therefore, Fora might be a better choice for those requiring a larger capital infusion.
When considering credit score and annual revenue requirements, there are differences. Credibly’s credit score requirement is 550, while Fora’s is 500. The minimum monthly revenue for Credibly is $25,000, compared to Fora’s lower requirement of $12,000. Additionally, Fora has a maximum term of 16 months, while Credibly grants borrowers 18 months to repay their loans.
Your choice between these two lenders should be based on your specific loan type and funding needs.
Credibly vs. SMB Compass
Credibly and SMB Compass both offer a range of business financing options, making them suitable for businesses in need of significant capital. Credibly provides invoice factoring, working capital loans, business lines of credit, and merchant cash advances ranging from $5,000 to $400,000. In contrast, SMB Compass offers nine types of loans, including term loans, business lines of credit, equipment financing, invoice factoring, and bridge loans, ranging from $10,000 to $10 million.
Credibly requires a credit score of 550, while SMB Compass mandates a 600 for some of its loans. Businesses with poor credit may secure financing through either option, but SMB Compass aligns better with those seeking low-interest rates and long-term financing, offering APRs as low as 5.25% and repayment terms spanning up to 25 years.
Applying for a Loan with Credibly
If you’re considering applying for a loan with Credibly, here’s what you need to know:
- To apply for a Credibly loan, complete a quick online application to prequalify. This entails a soft credit check, which won’t affect your credit score. After prequalification, compare Credibly’s terms with those of other lenders. If their offer aligns with your needs, funds can be deposited into your business bank account in as little as a day.
Ensure you have the following information ready before applying:
- The last three months of your business banking statements
- Recent tax returns (for loans exceeding $100,000)
- Copy of your driver’s license or government-issued ID for all business owners
- Federal Tax ID number (FEIN)
- NAICS or SIC code
In the competitive landscape of small business financing in 2024, Credibly emerges as a reliable partner for businesses in need of accessible funding solutions. They offer a diverse range of loans, accommodating those with poor credit and limited time in operation. However, it’s essential to weigh the pros and cons, considering factors like potential fees and factor rates that can affect overall borrowing costs. By comparing Credibly with other lenders, you can make an informed decision aligned with your specific financial requirements
Frequently Asked Questions about Credibly
How long does it take to get a loan from Credibly?
Approval can be as quick as four hours, but it may take longer. Borrowers generally receive their funds the following business day after approval.
What credit score does Credibly use?
Credibly evaluates business and personal FICO credit scores to determine loan amounts and interest rates.
Is Credibly an SBA lender?
While Credibly doesn’t directly issue SBA loans, they do offer SBA loans through partner lenders. To qualify, you need a credit score of at least 620, two years in business, and no bankruptcies in the past three years.
Is a Credibly loan easy to get?
Most of Credibly’s business loan requirements are more lenient than those of many lenders, especially compared to traditional banks and credit unions. Depending on the loan, you might qualify with a credit score above 500 and only six months in business. However, you’ll need a minimum annual revenue of $180,000, and that revenue must be deposited in a business bank account, not a personal account.
How does Credibly’s application process work?
Credibly’s application process is streamlined and efficient. It begins with a quick online application to prequalify, which involves a soft credit check, ensuring that your credit score won’t be affected. After prequalification, you can compare Credibly’s loan terms with those of other lenders. If their offer matches your needs, you can expect funds to be deposited into your business bank account in as little as one business day.
Are there any prepayment penalties for Credibly loans?
Credibly does not charge prepayment penalties. This means you can pay off your loan early without incurring any additional fees, potentially saving on interest costs. Credibly encourages responsible financial management and rewards borrowers who can repay their loans ahead of schedule.
In other articles, Fundbox Small Business Loans: Helping Small Businesses Thrive 2023 Review