Getting a small-business loan from a bank is often a slow, difficult task. That’s where online lenders Funding Circle and Dealstruck can help, offering small-business owners a better shot at loan approval, reasonable loan terms and rates, a simple online application process with minimal paperwork, and faster funding.
Funding Circle is a solid option for businesses looking to make a major investment, such as buying equipment or opening a new location, as you can get a term loan up to $500,000 with a five-year repayment period.
Dealstruck is better for financing a large inventory purchase or invoices. Its lines of credit let you borrow up to $500,000 at a competitive rate. The lender’s term loan maxes out at $500,000 with a four-year repayment period.
NerdWallet compares Funding Circle and Dealstruck to give you a better idea which lender is right for your small business.
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Before you apply for a Funding Circle loan, find out whether you meet the lender’s minimum qualifications.
Do I qualify? ▾
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Before you apply for a Dealstruck loan, find out whether you meet the lender’s minimum qualifications.
Do I qualify? ▾
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Funding Circle is best if:
- You need to make a large investment for growth.
- You have strong personal credit and revenue.
- You need longer repayment terms.
Funding Circle’s $500,000 loan amount, coupled with a repayment term as long as five years, should appeal to businesses looking to purchase pricey equipment or make some other major investment. The online lender has provided more than $2 billion in small-business loans globally.
How to qualify: Borrowers must have a minimum personal credit score of 620 with no bankruptcies in the last seven years. The business must have been in operation at least two years, with at least $150,000 in annual revenue, and have been profitable at least one of those years.
Costs: Funding Circle’s term loans carry an annual percentage rate of 8% to 33%, including a one-time origination fee of 1.49% to 4.99%, deducted from your total loan proceeds. Real-time cash flow, your personal credit score and online customer reviews of your business are a few key factors that determine your APR. Funding Circle loans are repaid monthly over a period of one to five years. There are no prepayment penalties, and borrowers can repay the loan early to save on interest.
Speed: The online application can be completed in 10 minutes. Within two hours you should hear from a loan specialist, who will ask you to submit documents for the application verification. If approved for a loan, you should be funded within 10 to 14 days. Learn more in our step-by-step application guide.
If Funding Circle sounds like the right fit:
Dealstruck is best if:
- You need to finance inventory purchase orders.
- You have outstanding invoices and need working capital.
Dealstruck offers three types of small-business loans and can help you choose which one is the best fit for you. With Dealstruck, you can get:
- A term loan with a repayment period from six months to four years on loan amounts of $50,000 to $500,000. The term loan is best for one-time investments.
- An inventory line of credit, which allows business owners to finance 100% of their inventory purchases up to $500,000. It’s best for businesses with recurring inventory purchases, such as retailers.
- An asset-based line of credit, which lets business owners finance as much as 85% of their unpaid invoices up to $500,000. It’s best for businesses that need to borrow money to finance a working capital shortfall.
How to qualify: Borrowers must have a minimum personal credit score of 600. They must have been in business at least one year, be profitable and have at least $150,000 in annual revenue.
Costs: Dealstruck’s costs are similar for each of its loan products. The annual percentage rate for the company’s term loans runs from 10% to 28%; both its asset-based line of credit and its inventory line of credit cost 22% plus the prime rate (3.5%). The company’s term loans require a fixed monthly payment and are repaid over a period of six months to four years.
The inventory line of credit requires you to submit an inventory purchase order to Dealstruck, which then pays your vendors directly, with borrowings on the line of credit repaid over a period of 24 weeks.
The asset-based line of credit advances up to 85% of your unpaid invoices, with your customer’s payments directed into a Wells Fargo bank account managed by Dealstruck.
Dealstruck charges a prepayment penalty of 1% for every year its term loan is repaid early.
Speed: Dealstruck’s online application process takes about 10 minutes. If approved, borrowers typically receive funding within four to 20 days, about 10 days on average. This is much faster than with traditional banks and is similar to other online lenders. Read our guide on applying for a Dealstruck loan.
If Dealstruck sounds like the right fit:
Want to compare more small-business loan options?
NerdWallet has come up with a list of the best small-business loans to meet your needs and goals. We gauged lender trustworthiness and user experience, among other factors, and arranged them by categories that include your revenue and how long you’ve been in business.
Compare business loans
Steve Nicastro is a staff writer at NerdWallet, a personal finance website. Email: Steven.N@nerdwallet.com. Twitter: @StevenNicastro.
To get more information about funding options and compare them for your small business, visit NerdWallet’s small-business loans page. For free, personalized answers to questions about financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.
This article was updated June 16, 2016. It was originally published Jan. 27, 2015.
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