Gone are the days when business owners have difficulty getting small business loans. Thanks to Balboa Capital, small business owners have a chance to receive financing options no matter what your industry or how lean your basic loan documentation is.
As one of the most established small business finance lenders in the United States, Balboa Capital considers funding businesses with all risk levels, unlike traditional lenders. The catch, though, the more risk at stake, the higher the loan interest rate is.
In particular, Balboa Capital gears toward equipment loans, vendor financing, franchise financing, and commercial financing.
Balboa has embraced the changing landscape of the lending industry and has adopted the fintech approach. Transactions such as the application process, the loan agreement, and customer service are all done online/digitally. As a result, the funding process became quicker and more efficient.
In this Balboa Capital review, we’ll answer the following questions and more:
Balboa Capital is a direct lender that caters to small business owners through its three main loan types: short-term loans, business lines of credit, and equipment financing.
Since its inception, Balboa Capital has provided around $5 billion to small businesses.
Tracing back to the company’s beginnings, the Balboa Capital is the brainchild of Patrick Byrne and Shawn Giffin. The Start-up investment was $4000, which eventually grew into billions of dollars.
Over the years, Balboa Capital received several accolades for its operation as one of the leading alternative lenders. It ranked two times in the Inc. Magazine’s 500, which is a list of “fastest-growing private businesses in the country.”
Business.com hailed Balboa Capital as the “Best Alternative Lender for Small Business” in 2018.
Ameris Bank acquired the Balboa Capital Corporation in 2021, and they provide financial products for business and personal purposes.
Balboa Capital products offer three main loan business financing options: short-term loans, equipment loans, and a business line of credit.
The company’s loan products have amounts ranging from $5000 to $250,000, and there is no specified minimum required personal credit score.
Short-term loans are ideal for borrowers who need funds for certain purchases but cannot pay immediately. You can qualify if your business is at least one year old and has a yearly revenue of $300,000. The repayment term is 3 to 18 months with factor rates of 1.1 to 1.2.
Business Equipment Financing has attractive terms for owners who want to improve business operations with the help of specific tools or machines. You can acquire loans up to $250,000, which you can repay in two to five years.
It’s important to note that your business will guarantee the loan so that you won’t be personally liable. Your business should make a minimum of $100,000 annual revenue and be established for at least 12 months.
The Business Line of Credit funds ranges from 00 to 0,000 with a factor rate of 1.1. to 1.2. The loan repayment term is from 6 to 18 months. Among the three financial products, the Business Line of Credit requires the highest minimum annual revenue of $300,000. There’s also no required personal credit score identified on their website, but your business should be established for a minimum of one year.
In addition to its small business finance, Balboa Capital offers:
Each prospective borrower should have a good credit score and own at least 1/5th of the enterprise. A business should be operating for at least 12 months.
In terms of annual revenue, you need to bring in annual revenue of $300,000 to qualify for the Lines of Credit and Short Term loans while only needing $100,000 for equipment financing.
You need to provide documentation of your banking history. You can submit (1) three months of business bank statements; (2) a copy of your driver’s license; (3) a certificate of good standing; (4) voided business check; (5) a two-year balance sheet; (6) profit and loss statement; and (6) business tax returns.
Balboa Capital doesn’t accept loan applications from applicants with unpaid tax liens over $75,000.
Although the fintech has broad leeway in terms of considering businesses, the following industries are ones that it avoids working with: gambling, adult entertainment, oil or gas extraction, durable medical businesses, boats, and aviation.
A minimum credit score is not required. However, Balboa capital will review your personal and business credit during the funding process.
Short-term loans and lines of credit products can have daily or weekly payments, making it challenging for small business owners to keep their cash flow healthy. In terms of repayment intervals, it would depend on your loan product. Monthly payments are the standard for Equipment Financing borrowers.
Balboa often requires a personal guarantee from any business owner with a 20% stake or greater in the company. Defaulting on a loan could lead to Balboa filing a UCC Lien against business assets.
Balboa Capital is a direct lender and not a brokerage. As such, they can offer loans without having high credit score requirements.
Applying to Balboa Capital impacts your credit as the lender runs a hard credit pull. Borrowers could also potentially boost their credit since Balboa reports to the credit bureaus.
Visit Balboa Capital’s website and fill out the loan application there. Be sure to answer the questions about your personal background and business performance as accurately as possible.
Provide all the necessary documentation related to your application. Balboa Capital’s team will verify the data they received. Balboa Capital asks for additional financial statements for small business loans over $250,000.
As soon as you finish the application process and have satisfied the requirements, Balboa Capital will decide whether to approve or decline your business loan. You can expect a response within a business day in some cases.
Once your financing has been approved and the loan agreement is signed, you will receive the funds in your bank account.
Some customers have reported that a simple process with same-day funding is possible if you work with your account manager to promptly get quick approval.
Once your loan gets funded, the repayment schedule depends on the loan type. Equipment loan borrowers make repayments on a monthly or quarterly basis.
The short-term loan and business line of credit require daily or weekly payments. You’ll need to start making payments immediately if you have a daily payment schedule.
Borrowers can check their loan status through an online dashboard or by calling customer service. You can check your payment history and how much is left on the loan.
It is possible to get additional funding before paying off your loan. Balboa Capital’s concurrent funding policy allows borrowers to take out another loan after 90 days from their original loan. Borrowers can also renew their Balboa Capital loan after paying down 50% of the loan.
Balboa Capital is lenient relative to traditional business lenders regarding its list of loan application requirements. You don’t need to meet a minimum personal credit score, but they require a score reflecting that your business can handle the repayment.
The equipment financing has a long repayment term of up to 5 years. Equipment loans provide funding for construction, restaurant, manufacturing, tech hardware, and office necessities.
Since Balboa Capital reports to credit bureaus, business owners also have the chance to improve their credit scores if they stick to their repayment schedule.
If you are an owner trying to compare lenders and their business loan offerings, you can use the loan calculators on Balboa Capital’s website. This way, you get a brief idea of the monthly payments and repayment schedule for the amount of money you would like to borrow.
Balboa Capital charges small business owners additional fees apart from loan interest rates. There is an origination fee, and they also file a UCC lien.
Under the U.S Uniform Commercial Code, a UCC lien Balboa Capital the right to stake a claim to your business assets. Balboa Capital has a “priority claim” to the assets that can be up for sale as compensation if you fail to pay your loan payments.
In some instances, some clients experienced being charged an insurance fee and had to provide money as a deposit. However, some clients claim that they could not reimburse the deposit from Balboa Capital after the loan was paid. Other users claimed they were charged a non-insurance fee even after sending proof of insurance coverage.
Another customer complained that a Balboa Capital affiliate contacted them regarding a phone and internet plan but ended up selling them into a loan product.
Programs with daily or weekly payments make it harder to preserve cash flow for day-to-day things that might pop up. Some customers complained of hidden fees when attempting to pay off their loans early. For example, one customer said they were told there were no early payment penalties but were charged a fee for paying off their loan early.
Pros:
Cons:
Under Trustpilot’s Non-Bank Financial Service category, Balboa Capital earned 4.3 out of 5 stars. In the 275+ reviews from their clients, 83% gave an excellent rating, while 7% and <1% gave bad and poor ratings.
Positive reviews focused on equipment financing recommend Balboa Capital. Business owners shared that Balboa Capital’s customer service team handled their inquiries and loan well. Thanks to the capital they received, they could manage their business operations efficiently.
Meanwhile, negative reviews and customer complaints stated that Balboa Capital charged higher rates than previously agreed and didn’t reveal all the details upfront. It also demanded a deposit which, according to some, was not reimbursed.
Apart from the additional charges and upfront costs, there were other fees, such as insurance and sales tax, including a termination fee of $479. Some customers complained of being charged a non-insurance fee despite carrying insurance.
Another said they wanted an Equipment Financing Agreement (EFA) but got an Equipment Leasing contract instead.
Also, customers complained that during the height of COVID-19, Balboa Capital didn’t offer leeway to its clients, like deferring payments or extending assistance to pandemic-stricken businesses.
Balboa Capital has been around for more than three decades as a lender. It has a solid track record of financing small businesses across diverse industries.
As a fintech, it worked with Aruba, a Hewlett Packard Enterprise Company, to streamline services by improving Wi-Fi security and performance in the fintech’s headquarters at 575 Anton Boulevard, Costa Mesa, California.
Balboa Capital received an accreditation rating of A+ rating in the Better Business Bureau Reliability report. The A+, in this case, is an excellent rating considering they did have 49 complaints in the past three years. Since they respond to all complaints, the Better Business Bureau doesn’t deem them harmful when formulating their rating.
You can reach out to Balboa Capital through its website or social media accounts. They are on most of the popular social media channels.
Acquisition of Balboa Capital loan products and repayments affects your credit score. The corporation reports to three leading credit bureaus: Experian, Equifax, and TransUnion.
Experian is a research consumer-based company operating for125 years and covers 44 countries. Equifax is a global data analytics company headquartered with 13,000 employees in over 24 countries. TransUnion is a global information solutions provider working in 30 countries and has provided services to 500 million consumers and businesses worldwide.
If Balboa Capital rejects your loan application, you can re-apply after thirty days. You can improve any deficiencies that might have caused you to get rejected during the period.
However, if you need quick cash, you might consider applying to other lenders offering small business loans or equipment financing.
Balboa Capital Corporation has its strengths and weaknesses as a financial solutions provider. Having relaxed requirements is good, but the additional fees are burdensome. You also have to note that although the company offers unsecured business loans which don’t require collateral, it will file a UCC lien.
When applying for financing, you are assured of legitimacy since Balboa Capital has been around since the 80s. We recommend its Equipment Financing loan product if you want to expand and improve business operations through tools or equipment.
You can also increase your credit score since the fintech reports to credit bureaus. Thus, their loan offerings are a fit if you want to apply for small business loans, need an average amount of funding of no more than $250,000, and can afford a medium-length repayment period of up to 18 months.
We give Balboa Capital a rating of 4 out of 5. Many are happy with their services, but many complaints are lingering around the corporation. According to reviews, Balboa should consider removing or lessening its other fees on each loan product. It would have also been good if the corporation extended aid to its clients during COVID-19 by loosening some repayment terms or conditions so borrowers could cope.
Disclaimer: The Balboa Capital trademark is owned by Balboa Capital Corporation. and its use herein is for reference purposes only and it does not indicate sponsorship or endorsement from Balboa Capital Corporation.
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