Companies needing a small business loan can choose between traditional lenders like banks and credit unions or alternative online lenders. But traditional lenders have strict qualifications, and there are so many alternative lending options it can be difficult and time-consuming to find the right one.
BusinessLoans.com is a lending marketplace that helps ease the process by matching you with loan providers in its network. You only have to complete the simple online application, and you can receive multiple funding options from lenders that want to work with your business.
However, the fintech platform isn’t the right fit for every business funding need. It lacks transparency on costs, isn’t a direct funder, and can it take up to a week to receive the funds.
We can help you decide if BusinessLoans.com is the best choice for your funding needs by covering the benefits, drawbacks, and application process. Specifically, we’ll answer these questions and more:
BusinessLoans.com is an online lending marketplace that connects small business owners to business funding options through its network of lenders. The alternative lending platform offers small businesses options outside traditional banks and credit union lenders.
It is not a direct lender but helps match you to direct lenders. The platform offers a self-service model where you can complete a single application and get offers from various lenders. You can then select a funding option and work with that specific funder to finalize the deal.
Applicants can complete the process independently or work with a representative to finalize the loan application process and review the available lenders. Once you match with a lender, the company’s job is complete, and you get handed off to that funder.
The company is a newer player in the alternative business lending space, having just launched in 2020. However, it’s already amassed a solid online reputation and recognition from other businesses.
Online services are available in all 50 states. It is headquartered in Charleston, South Carolina.
When a small business owner applies, the company’s algorithm uses 13 data points about the business to match you to lenders that best suit the business’s funding needs. You can complete the entire process without speaking to a representative, but loan specialists are available.
The marketplace’s lender partners provide funding between $5,000 and $3 million. It offers access to four main loan types.
A short-term business loan provides immediate access to working capital. Due to more flexible underwriting standards, these funding structures typically have lower qualifications and fast funding times.
The tradeoff is that they’re usually more expensive and have short repayment terms, typically between three and 24 months. In addition to shorter repayment terms, these loans usually have frequent repayments, mainly daily or weekly.
Long-term loans are what most people think of when they hear the phrase “business loan.” These are traditional financing structures, where a business receives large one-time disbursement repaid plus interest over multiple years.
Most term loans carry a fixed interest rate and fixed monthly payments. However, the website indicates that its lenders also provide long-term loans with floating or variable interest rates.
The terms for these loans are usually 5-10 years, but some terms go over 20 years. They are a good investment for large, significant purchases such as equipment financing, business acquisition, purchasing commercial real estate, or expansion.
Depending on the lender, your credentials, and how you plan to use the funds, these loans could require collateral. If you use the loans to purchase real estate, equipment, or other fixed assets, the asset you’re financing serves as the collateral.
A business line of credit differs from a standard business because the funds are activated as an available credit limit instead of a one-time lump sum of cash. Business owners can draw funds from the credit limit as needed.
You only pay interest on the principal of the funds you withdrew from the credit limit. BusinessLoans.com’s lender network offers revolving lines of credit. That means the credit limit replenishes as you repay it, like with a credit card.
The credit limit gives you funding on demand. You can use the money for working capital or to cover cash flow gaps during a down period. Lines of credit are excellent for ongoing projects, seasonal businesses, and covering unexpected costs.
Merchant cash advances (MCAs) are one of the most accessible but expensive forms of business funding available. Technically, MCAs aren’t loans but rather business-to-business transactions.
The funder purchases a percentage of a company’s future receivables at a discount for a large lump sum of cash. Repayment comes from a fixed split of your daily credit card sales or incoming cash. Some MCA funders take the payment directly from your card reader, while others use an ACH transfer from your business bank account.
While BusinessLoans.com doesn’t publish information on rates or fees, most MCA products use a factor rate to determine costs. The method is simple to calculate but can be expensive. Most factor rates are expressed as decimals ranging from 1.10 to 1.50.
For example, let’s say you received an MCA for $500,000 at a factor rate of 1.25. You’d multiply the funding amount by the factor rate to determine your costs:
$500,000 x 1.25 = $625,000. You’d pay $125,000 in costs for the advance of $500,000.
While you can think of the $125,000 as “interest,” it’s really the MCA funder purchasing $625k of your receivables for a one-time cash advance of $500k. Most MCAs are short-time funding and must be repaid within two years or less.
The exact terms you receive depend on MCA company, your credentials, and the advance amount. The percentage of your daily sales that go to the repayment is usually called the holdback rate.
Say you received the above MCA with a 12-month term and a 30% holdback rate. You’d have to average about $5,707 in daily sales for the year, assuming you drive sales all 365 days. 30% of those sales, or $1,713, goes to the MCA funder.
One of the advantages of the marketplace lender is that the minimum qualifications to apply are very low. There is no minimum credit score requirement.
The only other two minimum qualifications are:
The company doesn’t publish information on interest rates or fees for its products. It also doesn’t provide terms or specific details on the structure of its small business loans. In addition, it doesn’t provide customer service operating hours.
While it doesn’t provide cost information, most alternative lending options are more expensive, especially if you have a low credit score. Credit-challenged small business owners will pay higher interest rates.
The lack of information is likely due to the number of lenders in its network. The company does not publish concrete information since rates, terms, and structures can vary significantly between lenders. You must apply and get matched to a funder to get terms and rates.
Likewise, collateral requirements also depend on the lender, loan type, funding amount, and your credentials. Long-term loans are more likely to require collateral. Lines of credit can be secured (with collateral) or unsecured (with no collateral). Most short-term loans and merchant cash advances are unsecured.
However, you’ll likely have to sign a personal guarantee for unsecured funding. This is a legal promise to be personally responsible for the loan amount if a business defaults. It bypasses the liability protections of an LLC or corporation. If the business defaults, the lender can pursue your personal assets to recoup its losses. MCAs might not require a true personal guarantee but a similar promise.
The company’s website has a section for a business loan affiliate program but doesn’t provide information about the partner program without first signing up. ISOs and business loan brokers must sign up or contact the company to learn how the program works and what commission or referral fee structures are available.
The lending marketplace’s simple application is one of its standout features. You can complete the application in three minutes or less. It will then match you to the lenders that suit your profile and funding needs.
You can also call the company directly for assistance completing the application. The BusinessLoans.com representative can provide personalized guidance rather than depending solely on the company’s algorithm.
The repayment process depends on the lender your work with and the type of funding you receive. Because of this, the company doesn’t publish any information on post-funding.
If you receive an offer from one of the marketplace’s lending partners, it should outline costs, terms, and repayment schedules. Carefully review any loan agreement before signing to ensure you understand the repayment structure and that your business can afford the payments.
Here are some questions to ask the funder if you need more information on repayment:
Small business owners can complete the application within a few minutes. There is no minimum credit score to apply. You don’t have to interact with anyone to apply, but you have the option of guidance from a customer service representative.
The company’s algorithm matches you with lenders where you’re most likely to qualify. It saves you the time and energy of researching and applying to individual lenders.
Funding amounts start as little as $5,000 and go up to $3 million. The broad funding range can meet the needs of various small businesses.
While there’s no minimum credit score, your business does need at least six months in operation and $100k in annual revenue. Those thresholds are much more lenient than traditional lenders, but many alternative lenders work with younger and smaller businesses.
The funding time can take longer than most alternative lending platforms. While there are some fast-funding options, receiving your funds could take up to a week. Most alternative lending options can provide funding in 24-72 hours.
Perhaps the most significant drawback is the lack of transparency on costs and terms. There’s no way to estimate your costs before you apply.
Yes, BusinessLoans.com is a legitimate online business lending marketplace. The company only launched in 2020, but it’s already Better Business Bureau (BBB) accredited and has an A rating on the watchdog site. It’s also a verified company on Trustpilot.
The marketplace has a very positive online reputation, including a 4.8 out of 5 on more than 100 Trustpilot reviews. We only found a few negative reviews available.
The positive reviews discuss the ease of the process. Many customers mentioned the knowledge and professionalism of the excellent customer service team. Several mentioned their loan specialist by name.
The few negative comments come from customers who didn’t receive funding from the marketplace’s lender partners. One complained about not getting the funds they needed.
Another was from a customer who didn’t understand that it was a marketplace and not a lender, so they felt like it was a bait and switch when lenders started reaching out. After applying through the platform, another review complained about too many calls and emails from lenders.
The marketplace makes every effort to match you with a lender that can fund your request. But there’s no guarantee of approval. While there’s no credit score minimum, you must meet their annual revenue and time in business requirements.
If you were declined, the denial letter should explain why. Contact the lending platform if you have additional questions.
Fortunately, many alternative lenders and marketplaces are available if BusinessLoans.com doesn’t work out for you. Most can provide merchant cash advances and short-term loans.
There are also many options for business lines of credit and business term loans. If you want expanded funding options, you might be interested in one of the following small business loan products:
BusinessLoans.com is best suited for small businesses with at least six months in operation and a minimum annual revenue of $100k that need guidance on the available options. You can use the self-service option to navigate funding opportunities or connect with a representative for a guided approach.
Established businesses with excellent credit and high annual revenue can qualify for more advantageous business financing options. Also, if you need urgent funding, you might want to consider a different alternative lending marketplace.
Based on the available information, we rate BusinessLoans.com at a 3.8 out of 5. It has an excellent online reputation and can provide up to $3 million in business funding. But the complete lack of transparency on costs, terms, and loan structures is a concern.
Disclaimer: The BusinessLoans.com trademark is owned by BusinessLoans.com LLC, and its use herein is for reference purposes only, and it does not indicate sponsorship or endorsement from BusinessLoans.com LLC.
Fraud Disclosure:
Please be aware that individuals have been fraudulently misrepresenting to business owners (and others) that United Capital Source, Inc. (“UCS”) can assist small businesses in receiving government grants and other forgivable business loans, when in fact those grants or loans do not exist or are not available. These individuals have ulterior motives and are engaging in the unauthorized use of the names, trademarks, domain names, and logos of UCS in an attempt to commit fraud upon unsuspecting small business owners.
UCS will never communicate with a prospective client on Facebook, Facebook Messenger, or any other type of social media. Further, any email communications will always come from an official UCS email address and not a Gmail, Yahoo, or other email domain. If you believe you have been contacted by someone posing as an employee of UCS, please email [email protected].
