business funding reviews

Should You Accept a Square Business Loan Offer?

If you use a Square card reader, they may have offered you a business loan. If you’re trying to grow your business or you’ve got an immediate opportunity that you’d need financing to afford, you may be considering it. But, you want to know more about Square business Loans.

How long does it take to get a Square business loan? Do Square loans affect your credit? What percentage do they take for repayment? I answer these questions and more here.

This is what’s in store:

What is a Square Business Loan?
- Square Business Loan Cost
- Company Overview
How Do Square Business Loans Work?
Frequently Asked Questions
Conclusion: Are Square Business Loans Legit?

Now, let’s dig in!

What is a Square Business Loan?

In a nutshell, a Square business loan is a cash advance financing offer for small businesses that use Square for payment processing.

It’s designed to provide quick access to capital for business needs like:

Purchasing inventory
Covering operating expenses
Investing in growth opportunities

The loan amount can range from $300 to $250,000, and the repayment structure is straightforward: instead of traditional interest, there’s a flat fee, and you pay back a fixed percentage of your daily card sales through Square until the loan is fully repaid.

On days when your sales are high, you pay more towards the loan, and on slower days, you pay less. The loan offer is based on factors like your business’s payment processing volume, account history, and payment frequency.

You can make prepayments without any penalty. Square loans do not require a personal guarantee. And, there are no late fees or additional charges apart from the initial flat fee associated with the loan amount.

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Square Business Loan Cost

What percentage are Square loans? Reddit

Square loans don’t have a traditional interest rate. Instead, they charge a flat fee – “factor rate” – and then automatically deduct a percentage of your daily sales until the loan is paid off. For example, if you took an $8K loan with a $1K fee, Square might deduct around 15% of your daily sales to repay the loan, which is an example from a real borrower.

Business owners have reported varying factor rates on Square loans:

1.13 (13.68% on a $95K loan)
1.14 (14% on a $1K loan)
1.135 (13.56% on a $31.7K loan)

Editorial reviewers have reported Square business loan factor rates between 1.10 and 1.16 (10-16%). Again, this is not the same as APR and does not represent an interest rate.

You might also like: The Payoff Loan Review: Is This the Debt Consolidation Option for You?

Company Overview

Square Inc. is a San Francisco-based, private, for-profit company that was founded in 2009 by Jack Dorsey and Jim McKelvey. The mission was to make it easier for small businesses to accept credit card payments.

Their key industry markets are, restaurants, retail, and beauty. Square’s first product was a credit card reader that could be plugged into an iPhone to process cards on the go.

Now, they offer a large vast range of business products including:

Commerce solutions like payment hardware and POS, invoicing, an online ordering platform, and shoppable websites.
Customer marketing products including email and SMS marketing, loyalty programs, customer management, gift cards, and photo studio.
Staff management tools like scheduling and time tracking, team accounts, and human resources.
Business banking that includes checking, savings, loans, and credit cards.
Technology and development including dev specialists, access to APIs (for integration with business software), and a dedicated app marketplace.

Jack Dorsey remains in the driver’s seat as the company’s current CEO (he stepped into this position in 2022), and is also the co-founder and chairperson of Block Inc.

Block® is the parent company of Square®, Cash App®, Spiral®, and Tidal®.

So, Square’s leadership is pretty corporate-minded, and employees seem to like that. According to Glassdoor®, most staff would recommend working at Square to a friend (72%) and approve of the CEO (74%).

The majority of Square’s business customers seem to approve as well, with a 4-star trust rating on Trustpilot. Overall, Square receives positive feedback from users who appreciate its easy-to-use platform and helpful customer service. Customers value features like simplified navigation, quick deposits, and convenient payment options.

Many have remained loyal to Square for years, citing its reliability and integrated functionalities for managing listings, reporting, and website credit card processing. However, some users have encountered issues with account deactivation and slow customer service response times, indicating areas for improvement in Square’s service experience.

Meanwhile, Square Inc. has a 1.06-star customer rating and A+ rating with the Better Business Bureau (BBB).

It always surprises me to see how BBB grades are issued. Square Inc. has had 1,041 complaints closed on the platform in the past 12 months and 3,255 in the past 3 years—This seems high to me.

As of January 26, 2024, Block is facing a class action over a provision in its terms of service barring users making any “objectionable” statements about the company in public. The parent company is actually party to several ongoing legal cases, both as a plaintiff and defendant across the country. But, I didn’t see anything to make me think that the company is conducting fraudulent business.

Finally, Square business loans are issued by Square Financial Services, Inc., a Utah-Chartered Industrial Bank. Member FDIC.

You might also like: Novo Bank Review: First-Rate Small Business Banking or Scam?

How Do Square Business Loans Work?

Now that we have all the fine details out of the way, let’s explore the features of a Square loan and what you can expect if you decide to accept an offer. In all, the process is pretty automated and convenient, but there are caveats you should be aware of.

1. Automated Offers

With Square business loans, you don’t apply for a loan—instead, you accept an offer through your dashboard. The platform looks at the eligibility factors, then lets you know if you can secure extra funds for your business.

Qualified businesses will receive an offer through their dashboard and via email if their account looks like a good fit for funding. Then, all you need to do is accept it.

Note that simply signing up for a Square account doesn’t make you automatically eligible.

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Square Business Loan Requirements

To get an offer, you will need to meet certain requirements. First of all, you need to use the Square payment processing platform.

Then, Square looks at several performance-based factors to determine loan eligibility:

You should process at least $10,000 in a year through Square to be eligible for a loan offer.
Your Square account should show consistent payment processing to show that you can repay the loan through your account transactions.
A good mix of new and returning customers will strengthen your ability to qualify.

Payment disputes and chargebacks can make you ineligible for a Square loan.
Your bank account will be reviewed for insufficient funds, which will impact your eligibility.
Payment limits or reserves on your Square account could disqualify you.

If you have multiple Square accounts or locations with outstanding Square loans, they should all be in good standing, actively processing transactions, and loan repayment needs to be current.

2. No Personal Guarantee

There is no personal guarantee (no PG) on a Square business loan—This means that Square won’t come after your personal assets if the loan defaults. And, no PG typically means no hard credit pull, and no impact to your credit score.

For loan amounts up to $100,000, Square doesn’t need any collateral.

However, for loans that exceed $100,000, they may secure your business assets and file a Uniform Commercial Code (UCC) statement with the Secretary of State (SoS) in your business’s jurisdiction.

Filing a UCC statement with the SoS creates an official record that establishes a Square’s interest in your business assets. This filing serves as a public notice to inform others, such as potential lenders or buyers, that the creditor has a security interest in your assets.

By filing a UCC statement, the lender is protecting their interest in case you default on the loan—It establishes a legal claim or lien on specific business assets like:

Inventory
Equipment
Accounts receivable

This process is important for secured transactions and helps lenders secure their position in case of business insolvency or default…you won’t have to worry about this at all if your loan is less than $100K.

You might also like: No-Doc Business Loans: Get Funds Without Proof of Income

3. Quick Funding

Square’s funding process is streamlined for speed and efficiency, aiming to deposit funds into your account as quickly as the next business day.

When you apply for a loan, you’ll usually receive an immediate decision on approval, and this won’t have any impact on your credit score.

4. Automatic Repayment

Square loans are repaid as a percentage of your daily sales. When business is good, payments are higher and on slow days, payments are lower—This is typical with a cash advance versus a fixed payment with a traditional business loan.

The daily repayment method can result in an effective rate that’s higher than what you would probably find with a bank loan or credit card. While this type of loan can be convenient, it’s important to understand the total cost and impact on your cash flow, especially during slower months.

Anecdotally, I’ve seen borrowers mention repayment terms with percentage of daily sales as low as 6.5% and as high as 21%. If your repayment plan is charging too much, you may be able to negotiate lower daily repayment.

Moreover, Square loans require a minimum payment of 1/18th of the initial loan balance every 60 days, and the full loan amount must be repaid within 18 months. With this structure, for an $8K loan with a $1K fee, you would need to make a payment of at least approximately $444.44 every two months, and the total loan (including the fee) would need to be repaid within a year and a half at a rate of approximately $500 per month.

You might also like: Could a Stripe Capital Loan Get Your Business Through a Rough Patch?

5. Transparent, Fixed Costs

Before you accept a loan, you will see the loan amount, fees, and repayment percentage upfront. It’s pretty straightforward.

But, on top of the loan fee, you will pay processing fees on each transaction—all payment processors charge these fees in addition to any loans you might be repaying.

Square’s processing fees differ based on the payment method:

For in-person transactions, 2.6% of the transaction amount plus 10 cents per transaction.
For online payments, 2.9% of the transaction amount plus 30 cents per transaction.
For invoice payments, 3.3% of the transaction amount plus 30 cents per card transaction, or 1% with a minimum of $1 per transaction for ACH bank transfers.
For manually entered transactions, 3.5% of the transaction amount plus 15 cents per transaction.

So, between the loan repayment and processing fees, you could pay upwards of 12.6% to 19.5% of each transaction until your loan is settled.

You might also like: What You Need to Know About PayPal LoanBuilder for Business

6. The Square App

The Square Point of Sale (POS) app is available in the Google Play and Apple app marketplaces. It lets you accept payments easily using credit cards, contactless payments (like Google Pay and Apple Pay), gift cards, and invoicing right from your phone or computer.

Within the app, you can:

Manage your inventory
Track sales
View reports

Plus, you’ll have funding options such as next-day transfers to your bank account for a fee or free transfers in one to two business days.

Many users find it straightforward to use and appreciate its integration with other Square tools like eCommerce and team management. However, some people have experienced issues with customer support and account deactivation, so it’s important to keep that in mind.

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Frequently Asked Questions

When does Square offer you a new loan?

Square offers loans through its Square Capital program based on your account activity and sales performance. Eligible sellers are notified of loan offers within their Square Dashboard or through email. Some borrowers have been offered new loans while still in repayment for a current loan.

What is the limit on Square business?

The loan amount offered by Square Capital varies based on your business’s processing history, sales volume, and account activity. Square does not publicly disclose a fixed maximum limit, but you can check your eligibility and view loan offers in your Square Dashboard or contact Square Support for more details.

Conclusion: Are Square Business Loans Legit?

In short, yeah, Square business loans are cash advances that are offered by a legitimate, trusted company. Cash advances have been known to get businesses through a rough patch or quickly fund short-term needs.

However, they have always been the business equivalent of a personal payday loan. I never recommend that business owners take out a cash advance, or any other factored loan, unless there is absolutely no other alternative—This is because the costs are too high.

Instead, I suggest you research all of your options and take advantage of the offers that charge the lowest rates to optimize your business finances.

Do you want to learn how to obtain up to $100K in as few as 30 days? Join Business Credit Workshop today!

Can You Open a SoFi Business Account? SoFi at Work Review

By Joe

So, you’re looking to open a business account…No doubt SoFi® has come up on your radar, especially if you already have a personal account with them. Maybe you’re launching a new company or you’ve been operating awhile and need financial products.

Either way, you’re here because you wanna know what business services you can get. Well, SoFi® doesn’t offer traditional business checking or savings accounts, but they do have a cool product called SoFi at Work®. And, they offer business funding — Let’s talk about both.

This is what’s in store:

What is SoFi®?
- Company Overview
SoFi at Work® Features
SoFi® Small Business Funding
- Application Requirements
Frequently Asked Questions?
Final Takeaway

Now, let’s get poppin!

What is SoFi®?

SoFi® is a bank known for its personal checking, savings, and loans. With personal loans ranging from $5,000 to $100,000 and fixed rates from 8.99% APR to 29.49% APR, members can consolidate high-rate debt or fund projects. But, the institution offers a much wider variety of financial products.

SoFi® personal loans come with no fees—no origination fees, late fees, or prepayment penalties—and flexible repayment terms from 2 to 7 years. Plus, with options for student loan refinancing, private student loans, mortgages, investments, insurance, and more, SoFi® provides broad solutions to meet a spectrum of financial needs.

Today, we’re going to focus on their business offers: SoFi at Work® and small business funding.

You might also like: An Unbiased LendingClub Review for Borrowers and Investors

Company Overview

Before we explore how you can leverage SoFi® as a business owner. Let’s learn a bit more about the company itself.

SoFi®, aka Social Finance, Inc., is a San Francisco-based, public, for-profit company with headquarters scattered across the U.S. The company was founded in 2011 by Mike Cagney, Dan Macklin, James Finnigan, and Ian Brady. At the time, these guys were graduate students at Stanford.

The current CEO of SoFi® is Anthony Noto, who served as the Chief Operations Officer of Twitter until 2018. Before that, he was the Co-Head of Global TMT Investment Banking at Goldman Sachs—The man is experienced in the right ways.

According to Glassdoor, a majority of employees are satisfied with the company. 62% of employees would recommend them to a friend, and 77% approve of Noto as the CEO. While this isn’t the most enthusiastic rating I’ve seen on Glassdoor, at 3.6 stars, the team seems to have a generally positive experience in-house…this says a lot.

SoFi® is verified with a 4.6-star rating on Trustpilot, which is impressive for a financial offer. 82% of the more than 8,104 reviewers give the bank 5 stars. According to this, account holders are even more satisfied with the platform than staff, which is everything.

Some loyal members will go so far as to say the only people leaving negative reviews of SoFi® are those who may be doing shady trade with their account. But, one legitimate potential downside is that it’s an online-only bank, which usually infers limits on cash deposits. In sum, even Redditors have nice things to say.

Now, depending on how ethically-conscious you are, you may want to know that SoFi® filed a lawsuit against the Department of Education in March 2023. According to NASFAA, Their stance was that the Biden administration’s extended pause on student loan repayment was unlawful and caused harm to their business. However, they withdrew the lawsuit when the bipartisan ceiling debt deal was signed into place and a clear timeline for payment reopening was presented.

All in all, I think SoFi® appears to be a great bank for personal financial products. But, I always recommend you do your due diligence before you sign-on to any offer. Now, let’s explore exactly what they can offer small business owners.

You might also like: Here’s How to [Actually] Get Business Credit With Just an EIN +More Options

SoFi at Work® Features

Again, SoFi® doesn’t offer business checking or savings accounts (yet). However, this may change in the future—one Reddit moderator for the company said that business banking is a common request and insinuated that the company might be mulling over the idea…But, they do offer something called SoFi at Work®.

In a nutshell, SoFi at Work® is an employee benefits platform from SoFi®.

As a business owner, SoFi at Work® can be a valuable resource for your employees’ financial well-being. With this program, you can provide a range of perks to support your team in managing their finances.

For starters, your employees can access various financial products like:

529 college savings
Emergency savings
Retirement products
Student loans
Personal loans
Home loans

Moreover, SoFi at Work®, offers financial education resources and access to financial planners, giving your employees the tools they need to achieve financial freedom and reduce stress. The program also includes contribution benefits like student loan and 529 contributions, which can serve as attractive incentives.

And, they do it all in one dashboard — you can make it easier for your staff to save for education, plan for retirement, get financing, or prepare for unexpected expenses.

By offering financial benefits, you can demonstrate your commitment to supporting your employees’ financial well-being, which can lead to workplace satisfaction and loyalty within your team.

You might also like: Gusto Review: Let’s Really Evaluate This Famed Payroll Platform

1. Student Loan Verification & Repayment

In mid 2023, SoFi at Work® rolled out a cool new thing called Student Loan Verification (SLV) to help you and your employees tackle student loan debt while still saving up for retirement. Basically, Congress passed SECURE 2.0 in 2022, which lets employers match student loan payments with contributions to retirement plans.

So, SLV makes it super easy for you to link up those matching contributions with your employees’ loan repayments. It’s all about dealing with the impact of student loan debt on retirement savings, which has been a big issue lately.

By teaming up with financial groups and record keepers, SoFi at Work® handles the nitty-gritty to make sure eligible loan payments are verified and retirement contributions are sorted.

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2. 529 College Savings Program

The SoFi at Work 529 College Savings Program offers a tax-advantaged investment opportunity for employees, demonstrating your commitment to supporting their families’ financial futures—By investing in a 529 plan, staff can potentially see greater gains over time while enjoying the benefit of federal tax-free earnings.

The program provides a low-cost and hassle-free way for employees to save, with automatic payroll deductions and no extra administrative burden for you as the employer. With SoFi at Work handling the setup and management, including plan design and reporting, your team can easily link and contribute to existing 529 plans.

You might also like: How to Raise Money for Real Estate Investment: A Beginner’s Guide

3. Emergency Vault™ Savings

sofi business savings account interest rate

The SoFi at Work® Emergency Vault™ is a comprehensive emergency savings program designed to alleviate financial stress for both you and your employees. It provides powerful financial tools, knowledge, and support to help employees build emergency savings effectively.

With easy setup, automated processes, and stress-free administration managed by SoFi at Work, the Emergency Vault ensures a resilient workforce with reduced financial stress and improved mental well-being. Additionally, the program includes activity reporting for program evaluation and active engagement to enhance employee benefit awareness.

4. Education Assistance Benefits

The education assistance benefits platform by SoFi at Work ® offers a comprehensive solution for employers who want to support their employees’ educational needs. This platform consolidates various educational benefit and contribution programs into one user-friendly interface—this grants streamlined access for both employers and employees.

With a focus on speed, cost-effectiveness, and compliance, the platform offers:

End-to-end education assistance
Digital plan design
Account administration

You can leverage SoFi at Work® to provide low-cost solutions for funding student debt, tuition expenses, and future education investments.

SoFi® Small Business Funding

As a small business owner, SoFi’s® small business loans marketplace offers you a streamlined and efficient way to access the capital you might need to grow your business—You can easily see personalized loan offers without worrying about impacting your credit score, which allows you to explore your options freely.

They provide convenient access to loans up to $2 million with same-day approval potential. Terms and fees will vary based on the lender(s) you’re matched with.

Business loan offers include:

Equipment loans
Working capital
Payroll financing
Startup financing
Expansion loans

With this type of loan, you typically pay a factor rate in place of an interest rate – these loans are typically much more expensive than traditional business loans in the long run.

However, they are convenient. You can sometimes pay back factored loans as a percentage of daily sales.

You might also like: No-Doc Business Loans: Get Funds Without Proof of Income

Application Requirements

When you apply for a loan through the SoFi® marketplace, the platform will ask for some basic contact information before they prequalify you (which should have no impact on your credit score).

There will be a soft pull to your personal credit report during the application process. SoFi doesn’t seem to check business credit.

Gather the following info before you apply:

Name, address and contact info
Business name, address, and info
Type of business (sole proprietorship, LLC, etc.)
Business industry info
Credit score range

You will need to provide permission for access to your credit report, but this should be a soft pull. Once you’re matched with a lender, you’ll still have to apply (think of Credit Karma’s® referral program, but with business loan offers). And, this is when your actual FICO credit score will likely be pulled.

You might also like: A Deep-Dive National Funding Review: Should You Accept an Offer?

Frequently Asked Questions

Is my money safe in SoFi Bank®?

Yes, your money is safe with SoFi Bank®—as safe as in any other bank. It’s FDIC-insured, offering protection for your deposits up to the maximum amount allowed by law.

What bank is SoFi® associated with?

SoFi® was granted a national bank charter by the Office of the Comptroller of the Currency (OCC) in January 2022. In February 2022, SoFi® acquired Golden Pacific Bancorp, the parent company of Golden Pacific Bank®.

Does SoFi® have a business account?

Yes, SoFi offers business accounts tailored for small business owners via SoFi at Work® (an employee benefits platform) and their business funding platform, Relay.™ They do not offer business checking or savings accounts.

What is the downside of SoFi®?

While SoFi® offers competitive rates and features, it may have a narrower range of products compared to traditional banks, and eligibility requirements for some services can be stricter. Plus, they currently have no business banking.

Does SoFi® have a business card?

No, SoFi® does not have a business credit card. They do provide a personal credit card with cashback and travel rewards, no annual fees, and expense tracking tools.

Final Takeaway

While SoFi doesn’t offer traditional business checking or savings accounts, it provides financial products for business owners through SoFi at Work® and its small business funding platform.

SoFi at Work® offers a range of financial products and educational resources to support employee financial well-being. It could be pretty cool for the right company.

The small business funding platform provides streamlined access to loans of up to $2 million with possible same-day approval. However, the loans are likely to come with factor rates instead of interest rates, which can make them more expensive in the long run.

While SoFi® may have a narrower range of products compared to traditional banks, its innovative approach and generally high consumer opinion make me think the company is reliable overall.

Ready to learn how to obtain up to $100K in business credit in as few as 30 days? Join Business Credit Workshop today!

A Deep-Dive National Funding Review: Should You Accept an Offer?

By Joe

If you run a business and you’re in the market for outside capital, you may have received a National Funding offer in the mail (perhaps for “up to $300K” with a piece of cardboard that resembles a credit card) or seen an ad online. At first glance, it probably sounds enticing or at least mildly interesting. But, you need to know more before you take a leap and get your company or yourself into the wrong kind of debt.

Here, we’re always on the lookout for small business funding opportunities and want to give you the most honest, unbiased information you can find about your options. While National Funding has been around since 1999, we haven’t done a deep dive analysis on their loans and financing offer… until now. Today, let’s explore everything you need to know about the lender so you can decide if they’re right for you!

Is National Funding legit? Here’s what we’ll cover:

What is National Funding?
Small Business Funding Offer Overview
Conclusion

Now, let’s get to it!

What is National Funding?

National Funding, Inc. is a privately-held small business debt-financing lender based in San Diego, California. They’ve been around since 1999 and you’ll find 72 National Funding reviews in a Google search, so they’re reputable. Business owners trust them for what they offer. But, not every lending offer is the right fit for every situation.

At this institution, there are three core funding offers:

Small business loans
Business loans for bad credit
Equipment financing and leasing

When you see a company offering any type of financing for bad credit, it’s wise to be discerning. In fact, I always recommend business owners educate themselves on how to repair their credit before getting into “bad debt” since it’s not as difficult as most people assume.

You might also like: Torro Business Funding Review: Is This “Zero Hassle” Offer Legit?

Who Owns National Funding?

National Funding was founded by Dave Gilbert. Gilbert has been with the company for over 22 years and acts as the present-day CEO.

According to LinkedIn, Gilbert launched the company just two years after graduating from USC Marshall School of Business where he received his BS in Entrepreneurship. He is a financial supporter of several sports-related charities, essentially sponsoring local teams.

Does National Funding Report to Credit Bureaus?

Other than on their blog, National Funding doesn’t mention any credit bureaus on their website. Nor could we find any lendees to tell us whether or not they report. So, as of today, no, National Funding does not report on-time payments (or poor payment history, for that matter) to credit bureaus.

Low-interest, legitimate business credit is typically based on a credit score. Sometimes lenders use a founder’s FICO score while others use a business credit score from a reputable business credit bureau like D&B to determine a business’ creditworthiness. It doesn’t seem like that’s the case with National Funding’s business loans for bad credit.

How to Qualify for a National Funding Loan

If National Fundings’ creditworthiness is not necessarily based on a credit score, it has to be based on something else. You can get business funding in as little as 24 hours after approval with full documentation of three-months’ business bank statements, which will determine your loan amount.

When you apply on the website, you’ll be asked to provide some contact information as well as your annual gross income. If you received an offer in the mail, you’ll be asked to share your invitation number (probably to track marketing efforts).

Once you submit your info, you will be redirected to the application process where you will first be asked for your personal FICO score.

If your income is above $12.5K per month, you can continue with the application process.

And, if your income is less than required, but your FICO score is above 650, you will be redirected to “apply for a credit card” with Eve Financial. Eve Financial is a newer company that essentially processes your information and matches you with a lender. National Funding likely gets a commission from every loan approved through the platform.

Now, back to the National Funding application process. If your income qualifies you, you’ll be asked to share more information. You’ll also be opted in to receive text messages if you don’t uncheck the box to revoke permission, so read carefully as you proceed.

The National Funding website will generate some forms for you to sign electronically. This only takes a few moments before you will be asked to prove your business income by uploading electronic business bank statements. If you have enough revenue, you’ll qualify.

Small Business Funding Offer Overview

If your business generates $12.5K or more per month and you’re still reading, it’s important to look at what kind of funding you might qualify for. Here’s a closer look at the three funding offers from National Funding.

1. Small Business Loans

Essentially, a “small business loan” through National Funding is a working capital loan or cash advance, intended for short-term needs. Your debt will be repaid through a percentage of each ACH transaction through your credit card processor, which is how they can use business income alone as a qualifying factor.

In the case of National Funding, you can expect a pretty hefty “flat fee,” also paid as a percentage of each transaction and in addition to any processing fees.

2. Business Loans for Bad Credit

National Funding’s “business loans for bad credit” are essentially the same a the small business loans but with higher fees. Instead of looking at your credit, the company examines your income. Your fees will be higher than with more traditional business financing.

If you feel like you won’t qualify for a more traditional funding option like a term loan, line of credit, or credit card, and you’re in a pinch, companies like National Funding do have money to offer.

3. Equipment Financing & Leasing

Finally, National Funding offers equipment leasing and financing. Essentially, if a piece of equipment breaks and you need it to operate, you can use a lender like this to help you replace it. In this case, funding could be necessary fast and it wouldn’t be a bad idea to pay a higher flat fee to keep your doors open.

Disclosure: In addition to these three funding options, National Funding advertises “merchant cash advances,” “working capital loans,” “unsecured business loans.” They also target specific industries like construction, commercial trucking, agriculture, medical practice, landscaping, and senior care. Their offers are almost the same across the spectrum, unchanging by title.

Conclusion

If you have poor credit, an immediate business need, and your revenue is at least $12.5K per month, National Funding might be right for you. The company has been in business long enough to prove that they’re legit. However, I almost never recommend a business owner apply for this type of funding. Instead, learn how to qualify for better funding options through business credit coaching.

National Funding themselves talk about trade credit, business credit scores, and building your business credit score. I commend them for it, but recommend you steer clear unless you are facing an emergency. There’s a better way. If you want to learn how to qualify for $100K in business credit in 30 days, join Bussiness Credit Workshop today.

A Complete Fundwise Capital Review: Should You Use Their Business Funding Services?

By Joe

Today’s business owners who seek funding have a plethora of options. Because of the convenience, among the most popular choices are online lenders. Before you start submitting applications all willy nilly, you should always know what you’re getting into.

Since most people don’t blindly trust endorsements from finance gurus (Grant Cardone, for example), I want to help you sort through existing Fundwise Capital reviews and get to the truth.

Here’s what you’ll discover:

What is Fundwise Capital?
What is the Fundwise Partner Program?
Final Takeaway

Now, let’s get to it…

What is Fundwise Capital?

Founded in 2013 and based in Provo, Utah, Fundwise Capital is an online lender that offers lines of credit and term loans to their clients.

Unsecured lines of credit and credit cards from $15K up to $200K with 0% interest for the first 9-15 months with “competitive rates” after the introductory period. They also help business owners access unsecured term loans, but they don’t describe the terms and conditions on their website.

This is Fundwise Capital in a Nutshell

Who owns Fundwise Capital?

Fundwise was founded by Utah-based entrepreneur Leo Kanell who also founded 7 Figures Funding, Identity Insured, and 7 Figures University.

What are the fees for Fundwise Capital?

Fundwise fees are $500 upfront plus 9% of the final approval amount.

How does Fundwise Capital Work?

Fundwise representatives know some of the best banks to apply for business loans and credit cards with, based on unique qualifications. They help businesses take the proper steps to obtain funding through external lenders.

Are Fundwise Crowdfunding and Fundwise Capital Related?

You might come across an Estonian crowdfunding company with the name Fundwise — the two companies are not related.

Now, Who is Fundwise Capital For?

Fundwise is geared toward businesses that need funding. To qualify, you must have a credit score of 650 or higher. If your credit score falls below this number, you can use a credit partner (co-signer) such as a business partner, family member, or friend with a qualifying score.

Fundwise Capital’s financial services are designed for:

Startups
Small business owners
Real estate flippers
Restaurant owners
Salon owners
Franchise investors
Coaches

While the above list outlines Fundwise’s target clients, there aren’t restrictions on how the money can be spent. So, the offer could essentially be leveraged by anyone who meets the credit qualifications.

To “apply,” you’ll enter the usual information including personal credit score, business income, and first and last name into a form. After that, a Fundwise representative will contact you the following day to discuss your options.

Keep in mind that this isn’t an actual funding application, so it won’t affect your credit score. Instead, this is a way for Fundwise reps to collect new lead information and pre-screen you for the appropriate products.

And, How Much Does Fundwise Capital Cost?

While the credit cards and term loans you obtain may come with 0% APR, you will pay a fee. The cost to leverage these services will be $500 upfront and an additional 9% of your total funding obtained as an “approval fee.”

So, at this rate, here’s what you can expect to pay:

$15K in funding = $1,850 to Fundwise
$25K in funding = $2,750 to Fundwise
$100K in funding = $9,500 to Fundwise
$200K in funding = $18,500 to Fundwise

Theoretically, if you spend and pay off your funding during a 0% APR introductory period, you might pay less with this offer than you would on a credit card with an APR around 20%.

Now, there is something else to watch out for: You could unknowingly get upsold on credit monitoring software or credit counseling, so brace for that. The credit monitoring software Fundwise promotes is from seeyourscore.com (located at the same street address in Provo, Utah as Fundwise Capital). Monitoring through the platform costs $29.99 per month and some users have had a hard time canceling their subscriptions.

In addition to credit building and monitoring bonus offers, Fundwise Capital has another product worth looking into (for satisfied clients, anyway): Fundwise Partners.

What is the Fundwise Partner Program?

Fundwise Partners is a program designed for affiliates to earn a commission for referring other business owners to the core offer.

Affiliates or “partners” get a unique landing page through which to send leads to the platform. They are also provided with a dashboard to track leads referred, funded accounts, and conversion rates.

This is a two-tier affiliate system, which means that you can also refer affiliates to the platform for a commission. Some affiliates primarily focus on promoting this platform to business coaches and entrepreneurs with a large network of other owners. Allegedly, some affiliates earn hundreds of thousands per year. But, there’s a catch…

…the partner program costs $29.99 per month.

Frankly, the Fundwise Partner program sounds more like an MLM business than a typical affiliate program. And, if that’s your thing, there could be a full-time opportunity here.

Final Takeaway: Should You Apply for Business Funding Through Fundwise?

As we wrap up, there are a couple of things I don’t love about Fundwise Capital:

Their website is a little wonky and missing information about pricing, fees, and other important details. This lack of transparency makes the company seem potentially unreliable.
Business owners who don’t qualify for funding seem to be rolled into paid offers with the promise to help clients improve their odds of getting funded. Unfortuanately, these offers don’t seem to provide a ton of value compared to other products in the marketplace.

And, there are some aspects I can appreciate about their business funding offer:

Fundwise Capital seems to rely on soft-pulls, which have no negative impact on credit scores — unusual and refreshing.
Credit cards, lines of credit, and term loans are my favorite type of funding for small businesses because they allow owners to maintain the highest level of control over cash flow.

So, like all business funding options, Fundwise has its benefits and its drawbacks. They’ve helped enough companies obtain funding to earn their star in the hall of business funding fame. Now you should know enough about the offer to determine whether it’s right for you at this time or not. If you want to learn how to get $100K in business funding in as little as a month, enroll in Business Credit Workshop today.

How to Interpret Lendio Reviews: Is This Funding Company Legit?

By Joe

Business owners across the world, now more than ever, turn to online lenders to keep their cash flowing and their doors open. One of the significant names in the business finance game today is Lendio. But, is Lendio a legit company? You want an honest answer, so here it is.

Let’s examine actual Lendio reviews from some of the most trustworthy consumer sites and thoroughly examine the brand’s offer. Here’s what we’ll cover.

What is Lendio?
- Who is Lendio and Where is the Company Based?
How does Lendio Work?
- What Type of Funding Can You Get Through Lendio?
- What is Sunrise by Lendio?
Is Lendio an SBA-Backed Lender?
- So, Has Lendio Funded any PPP Loans?
- And, If They’re Not Funding, How Does Lendio Make Money?
Now, How to Decrypt Mixed Lendio Customer Reviews
+Bonus: A Quick Look at Lendio’s Franchise Offer
Final Answer: Is Lendio Legitimate?

Read on to piece together the puzzle.

What is Lendio?

Lendio is a simple small business loan marketplace. The platform connects business owners with the lenders that they are most likely to obtain funding from. The platform offers connections with lenders who offer all types of cash flow increasing options like credit, loans, equipment financing, mortgages, accounts receivable financing, and more.

Who is Lendio and Where is the Company Based?

Lendio, Inc. was founded by Brock Blake, the current CEO, in 2011 and the company extended their first loan in Q4 2013, according to Wikipedia. The CFO is Chad Iverson. Company headquarters are located in Lehi, Utah.

How does Lendio Work?

If you’re a small business seeking funding, here’s what you might expect from Lendio. The application should take about 15 minuted to complete and will connect you with 75+ lenders. In many cases, you could get the funds you seek in as little as a day.

First, Lendio looks at your self-reported credit score range. Then, they find out how long you’ve been in business and how much money your company has generated over the last 90 days. After that, they ask what you need funding for.

Terms and conditions vary for business acquisition vs expansion or payroll, for example. So, by determining why you need funds, they filter out various lenders who aren’t likely to approve you.

When that’s over, the platform looks at certain aspects of your business that may help or hurt your qualification odds like if you have a prior bankruptcy or if you operate as a non-profit.

Once you’ve shared the above, the platform looks at the location of your business, your annual personal income, and your percentage of ownership in the company. Finally, there is a differentiator between Lendio and competitors: they want to know what factors are most important to you whether it be amount, speed, or cost of funding you’re looking for.

Once you agree to the terms and conditions (*which include the possibility that you’ll be contacted by auto-dialers and partners — probably why many people are asking “How do I get rid of Lendio emails?”), the platform will do a soft pull of your credit via Experian using your social security number. At this point, they don’t ask for your DUNS number.

If the platform can’t make the connection automatically, Lendio will ask you to manually enter your business’ financial information. You’ll be asked for your entity type and annual profits.

And, if you’re likely to be qualified through one of Lendio’s partners, they’ll let you know instantly and connect you to a possible funding channel.

If not, the platform lets you know precisely what’s standing in your way of getting funded and tells you what to do next.

And, when this happens, the system will suggest the next steps you can take to get ready for funding, which may include applying for a credit card or connecting with a partner like LegalZoom or Credible.

What Type of Funding Can You Get Through Lendio?

Via Lendio, you can access several types of funding types from their network of banks and online lenders. Now, let’s examine a handful of them and, for each, see some of the top lenders in their network.

First, here’s a quick summary.

Credit cards

If you’re looking for plastic, they have it. Just determine how much you need and the Lendio platform will try to help you determine which credit card issuer is likely to help you get it and at what rate. In many cases, you could be looking at 0% introductory APR offers, but this is likely to increase later. And, if you’re not quite ready for larget credit lines, Lendio might connect you with credit building options.

Some of the leading credit cards Lendio might match your business with could come from Chase, American Express, LenCred, Bank of America, Credit One, and Seek Business Capital.

Lines of credit

Through Lendio, line of credit amounts can range from $1K to $500K with interest rates between 8 – 24% and terms between one and two years. If your company qualifies, you may be able to access funds as quickly as within a couple of weeks.

For business lines of credit, Lendio might connect you with Kabbage, Blue Vine, Fundbox, Headway Capital, or Fundation among others.

Term loans

Term loans that you can apply for through Lendio might range from $5K to $2M with have interest rates as low as 6%. And, the terms can range between one and five years. Access funds obtained through the platform in as little as 24 hours.

Some of the term loan providers Lendio could link you with include OnDeck, Fundation, American Express, Funding Circle, Opportunity Fund, Credibility Capital, and Lending Club.

Startup loans

In most cases, startup loans can be the most difficult to obtain because financial institutions are more eager to lend to an established business. But, if you meet the requirements, you can leverage loans of $500 to $750K at interest rates between 0 and 17% to start a business. Access funds in two to four weeks and pay off your loan over the course of 25 years.

Startup loan offers that Lendio might match you with could come from Chase, American Express, or Bank of America.

Accounts receivable financing

Have outstanding invoices? Then, you may be able to leverage them as collateral through accounts receivable financing throught the Lendio platform. Get cash in an amount up to 80% of your current accounts receivables and pay factor rates as low as 5%. Get this type of funding in as little as 72 hours and pay it off in a year or less.

If you qualify for accounts receivable financing through Lendio, it might come from Eagle Business Credit, Internex Capital, BlueVine, FundBox, or ActionCapital.

What is Sunrise by Lendio?

In some cases, the next steps that the platform claims will set you on the journey to obtain working capital, loans, or credit via the platform will include signing up for Sunrise, the brand’s bookkeeping software.

If you create an account, you’ll be asked what your priority is. For example, are you looking to apply for PPP loan forgiveness, send and track invoices, or manage your banking?

When connecting your business banking information, Sunrise gives you the option to connect to major banks as well as smaller community banks and credit unions. From the dashboard, you can track income and expenses, send and receive invoices, and manage your business bank accounts.

This platform isn’t as automated or feature-rich as leaders like Quickbooks, but it seems to have everything you need for simple accounting and invoicing. Plus, invoicing only costs 1% per transaction, which is low.

Is Lendio an SBA-Backed Lender?

Lendio was one of 19 finetch companies participating in PPP loan application processing as of May, 2020. Yet, Lendio is not a lender. Instead, they match you to the most appropriate lenders in the United States based on your needs. And, the SBA does approve of their legitimacy.

So, Has Lendio Funded any PPP Loans?

As of July 2020, Lendio reported to have facilitated $10BN in total funding for the PPP program. And, despite the fact that August 8, marked the end of the PPP application period this year, Lendio is still accepting PPP applications in hopes that congress will extend the small business relief program. Still, the company does not provide direct funding.

Yet, according to many, Lendio is a good source for PPP application processing.

And, If They’re Not Funding, How Does Lendio Make Money?

Lendio doesn’t charge a fee, so how do they make money? Well, they don’t charge the small business owner. Instead, the get their money as a sort of finder’s fee or a setup similar to affiliate marketing from the Lenders who fund their applicants.

Think of Lendio as a broker who takes a cut from the big guy. Note that this typically means that the applicant may pay more than if they cut out the middle man and apply directly with a lender. But, the latter is a less convenient option.

Now, How to Decrypt Mixed Lendio Customer Reviews

On one hand, you’ll see 5-star reviews like the one above. Then, on the other, you’ll come across the naysayers. Take the following, for example:

Even if they make up a small portion of feedback, this caliber of review is enough to make you think twice about doing business with a financial company.

If you check out forums like Reddit, you might read about wonky system glitches.

Then, if you dig further, you may find that Lendio, Inc. is not BBB accredited and they have mediocre ratings on the platform.

So, what should you make of this confusion?

First of all, I need to point out that 2020 has been a whirlwind. I don’t know of a single company who didn’t face unexpected challenges this year. Our proverb for the year should be, “Have patience and trust the process.” Now that we got that out of the way, let’s just say that it is what it is.

Very few brands have a 5-star rating across the board. And, this doesn’t mean that they aren’t helpful or legitimate. TrustPiolt and BBB are designed for consumers, and most people don’t run to them when they have a great experience. But, if you have a bad experience, you want people to know.

Therefor, I recommend that you read the reviews, trust that you might expect similar results, but don’t judge too harshly based on the bad experiences. Many business owners have leveraged this platform and marketplace to grow their businesses. If the system is a good fit, you could be one of them.

+Bonus: A Quick Look at Lendio’s Franchise Offer

Before we wrap up, I want to mention another feature of Lendio’s offer in case you were wondering. Since 2016, they’ve presented the option to Franchise their offer for your own gain (up to 70% commission to keep for yourself).

In most US states, excluding California, Utah, and North Dakota, franchise opportunities are open to the public. So, if you live in any other state, you have excellent business networking skills, and you’ve got $55-65K to invest, this might be worth looking into.

Final Answer: Is Lendio Legitimate?

Yes, Lendio is an established, trustworthy company. They’ve helped many small business owners get financed. However, this is not the funding marketplace I recommend. Instead, I have more trust in Nav and feel that their offer provides more value while giving the business owner heightened control over the funding process.

If you want to learn how to build business credit so you can obtain up to $100K in funding in 30 days, enroll in Business Credit Workshop today.

Fundbox Review: Are These Lines of Credit Legit?

By Joe

When you’re in a pinch or you want to scale your business operations, you might turn to online lenders for working capital. Fundbox loans (which are actually revolving lines of credit) are a popular option right now. You may even be considering applying with the company. Before you do, read this.

Here, you’ll learn everything you need to know before you make a critical business financial decision. This is what we’ll cover:

What is Fundbox?
- Frequently Asked Questions:
- How Does Fundbox Work?
Fundbox Line of Credit Requirements
- Personal Guarantee Requirements
- Prohibited Businesses
Does Fundbox Report to Credit Bureaus?
Final Takeaway

Now, let’s get to it!

What is Fundbox?

In a nutshell, Fundbox is a fintech company that extends working capital in the form of revolving credit lines to companies that make at least $50K per year.

Frequently Asked Questions:

Where is Fundbox located?

Fundbox is headquartered in San Fransisco, California.

Who owns Fundbox?

Eyal Shinar is Fundbox’s founder and executive chairman, previously CEO.

How big is Fundbox?

According to Crunchbase, Fundbox currently has 17 team members, 25 investors, and $453.5 million in funding as of September 2020.

Where does Fundbox funding come from?

Lines of credit and loans are made directly by Fundbox and by First Electronic Bank.

How much is Fundbox worth?

Fundbox valuation was estimated at $750 million in 2020, according to Forbes.

How Does Fundbox Work?

Fundbox uses predictive modeling to help small businesses and freelancers optimize their cash flow. Essentially, a company connects Fundbox to its accounting or invoicing platform and business bank account to prove cash flow. The system analyzes accounts, which takes a few minutes. After that, the business is automatically approved or denied access to funding through the platform.

While the database of supported online banking software is massive, not all banks are accessible through the platform. So, some users who do their business banking at very small community banks or credit unions may not have access to Fundbox’s financial services for this reason alone.

Furthermore, only business bank accounts qualify. So, freelancers or contractors who use a personal checking account for both personal and business use will be unable to use the service (yet another reason why you must have a business checking account).

Once you’re set up in the platform, you may qualify for business credit. Learn more about each offer below.

You might also like: Torro Business Funding Review: Is This “Zero Hassle” Offer Legit?

1. Fundbox Credit

After your account is set up, you may get an offer for a revolving credit line in hours or minutes. You can then draw funds directly from your Fundbox dashboard to your business checking account for a maximum of $50K on your first draw. These funds must then be repaid weekly within the set repayment period.

Repayment periods on Fundbox credit might be 12-24 weeks. And, if you repay early, you will save on interest, which starts at 4.66% for a 12-week plan and goes up from there. And, “revolving” means that once your funds are replenished, you can draw from your limit repeatedly.

Periodic account reviews may increase or decrease your funding limit and/or interest rate over time.

2. (Previously) Fundbox Pay Net Terms

Typically, net 30 vendors that report to business credit bureaus are one of the first stops when establishing business credit. With Fundbox Pay, businesses could apply to send or accept payments for products and services with net terms.

Vendors who wanted to accept payments with net terms could apply as a merchant on the platform. Or, buyers could invite their vendors to the platform for the ability to buy now and pay later. It was a convenient funding option for businesses who were temporarily tight on cash.

Unfortunately, as of about a month ago, Fundbox no longer offers a net terms product.

3. (Previously) PPP Loans

While the application period for PPP loans, as outlined in the 2020 US stimulus, has passed, we should still acknowledge this offer. The reason it’s important to note is that if there is another round of similar financial offers in the future, Fundbox could be a potential funding source.

Fundbox PPP loan reviews are pretty much unanimously positive. The only complaint that applicants seemed to have was that the process took awhile. But, while these applicants waited from a couple of weeks to a month for approval, we’ve all heard of others who waited even longer.

Fundbox Line of Credit Requirements

As stated above, Fundbox borrowers must have a business checking account. In addition, the platform has other (relatively relaxed) requirements. If you have at least three months of business checking transactions that show activity that proves around $50K or more in annual revenue, a soft pull to your credit report that shows a minimum 500 personal credit score can qualify you.

In some cases, the platform may conduct a one-time hard pull. And, at least two months of history in a compatible accounting software might allow you to bypass the three-month banking history condition. But, if you connect the platform to a personal bank account, you will not be approved.

Personal Guarantee Requirements

These loans/credit lines do not require a personal guarantee. So, if your business defaults, you will not be held personally responsible. However, the proprietary algorithm that makes funding approval decisions makes it unlikely that this will happen — only companies who show the likelihood of repaying the loan will be approved.

Prohibited Businesses

If you’re in a questionable line of business, you already know that some major platforms might reject you. And, that could be the case with Fundbox as well.

Businesses in the following industries are prohibited:

Adult services and entertainment
Weapons and firearms
Gambling and online gaming
Drugs, dispensaries, and paraphernalia
Money service businesses
Not-for-profit organizations

Unfortunately, if your business falls under one of these umbrellas, you’ll need to look elsewhere for capital.

Does Fundbox Report to Credit Bureaus?

Business owners who receive funding might want to know if Fundbox reports to major credit bureaus. This is important because loans that are not reported will not have a positive impact on your business credit score.

Unfortunately, at this time, Fundbox does not report to D&B or any other business credit bureaus. So, any payments you make toward funding will not have an impact on your business credit.

Final Takeaway

So, yes, Fundbox loans and lines of credit are completely legit. The proprietary software can help businesses access working capital fast without too many hoops to jump through. But, there are some limitations that might lead business owners in another direction. If you’re interested in learning how to get $100K in business lines of credit in 30 days, sign up for Business Credit Workshop.