To learn more about Credibly and decide if it’s right for your needs, please continue reading:
Some small business owners need quick funding but don’t have the credit score for more conventional business financing. Credibly is an alternative lending platform that seeks to solve both problems.
Business owners can apply to Credibly with a minimum credit score as low as 500. If approved, you can receive funds within two business days – same-day funding could be possible if everything goes right.
However, Credibly might not be the right fit for every business. You’ll need to meet their time in business and annual revenue requirements to qualify. Specifically, Credibly provides loans to businesses with a minimum annual revenue of $180,000. In addition, the lender’s rates and fees are higher than many traditional business loans.
If you’re considering Credibly for your business, we can help guide you with what you need to know, including the pros and cons and how to apply for small business loans. Specifically, we’ll answer these questions and more:
Credibly is a data-driven, online, fintech lending platform that specializes in short-term financing to support small business growth. Its main products are working capital financing and merchant cash advances, but it also provides access to other small business loans through its lender partners.
Credibly’s main selling points are quick access to funding and acceptance of lower credit scores. A small business owner with a credit score of 500 can get funding in as little as 48 hours. However, other factors could impact credit approval and funding time.
Credibly’s rates are higher than those of traditional banks and lenders but are generally competitive with short-term business lenders. Traditional banks often have stricter requirements, making it difficult for many small businesses to qualify for loans. Credibly, on the other hand, offers a more accessible and supportive alternative for funding. The company also provides a good deal of transparency with a useful and informative website.
The Michigan-based alternative lender launched in 2010 and has provided nearly $1 billion in financing to small and medium-sized businesses (SMBs). Most of its loan products are available in all 50 states, but there might be some restrictions for merchant cash advances.
Credibly small business loans include seven options, but it’s only a direct lender for working capital finance and merchant cash advances. Direct lending allows businesses to access a variety of financial products, catering to different needs and durations. Let’s look at the available products.
Key facts:
Credibly’s working capital loan is a short-term business loan designed to help you cover everyday expenses. Examples of how you can use the funds include purchasing inventory, making payroll, and paying rent. Direct lending offers more flexible options for working capital loans, allowing businesses to access a variety of financial products with relaxed eligibility requirements.
Working capital financing requires either daily or weekly repayment instead of monthly payments. Most loans also require collateral.
Key facts:
A merchant cash advance (MCA) is a financing structure in which you receive a large sum upfront, which is repaid with future card sales. It’s not a loan in the traditional sense, but rather, it’s a purchase of future receivables. Direct lending provides more accessible options for merchant cash advances, allowing businesses to access a variety of financial products with relaxed eligibility requirements.
Small businesses often turn to merchant cash advances when they can’t qualify for other forms of business financing. Since it’s not a loan but a transaction, most financing companies are willing to work with borrowers with less than stellar credit or a shorter time in business. A proven history of high-volume card sales is the most important qualifying factor for an MCA.
Credibly provides small business owners access to other small business loans through their lender partners. The company doesn’t provide much detail on these products, as the amounts, rates, and terms largely depend on the lender you would end up working with. Through direct lending, businesses can access a variety of financial products that cater to different needs and durations.
Here are the other loan options available when you apply through Credibly.
Long-Term Loans: Credibly markets a medium-term business expansion loan of up to $250,000 with terms of 18 or 24 months. They do not publish interest rates or fees. However, Credibly has a maximum loan term of ten years for long-term loans, providing flexibility for businesses seeking extended repayment periods.
Business Lines of Credit: Credibly provides access to revolving lines of credit up to $250,000. With a revolving line of credit, you only draw what you need from the available line of credit. You then repay the draw plus interest. This prevents you from drawing – and paying interest – on funds you don’t need. A line of credit operates like a credit card in many ways.
Equipment financing: The company indicates that business owners can get between $10,000 and $10 million for needed business equipment, which includes everything from computers to kitchen appliances to construction and manufacturing machinery. It does not provide details on terms, rates, or repayment for equipment financing.
SBA Loans: The US Small Business Administration (SBA) administers the SBA loan program. The SBA doesn’t approve or fund loans but sets guidelines for lenders and partially guarantees up to 85% of the loan amounts. With backing from the federal government, lenders have the security to offer high borrowing amounts at low interest rates and extended repayment terms.
SBA loans through Credibly’s lender network follow general SBA loan parameters, which are:
Invoice Factoring: Also called accounts receivable factoring, this business financing method is essentially selling unpaid invoices to a third-party factoring company. You receive an advance based on a percentage of the invoice’s value. The factoring company applies a discount rate, collects payment, and sends the remaining amount to you minus its fees. Like an MCA, invoice factoring is not a traditional loan but rather a sale of future receivables.
Equipment financing is a type of small business loan that allows business owners to purchase or lease equipment necessary for their operations. Credibly offers equipment financing options to help you acquire the necessary equipment to grow your business. Our equipment financing options are designed to be flexible and affordable, with repayment terms that can be tailored to your business’s needs.
With equipment financing from Credibly, you can:
Our equipment financing options are available to small business owners who meet our eligibility requirements, which include a minimum credit score of 500 and a minimum monthly revenue of $15,000. This type of financing can be a game-changer for small businesses looking to invest in essential tools and machinery without straining their cash flow.
Small business qualifications largely depend on the loan type. They might review business credit reports. Direct lending offers more relaxed eligibility requirements, allowing businesses to access various financial products tailored to different needs and durations.
Here are the minimum requirements by loan type:
To be eligible for a small business loan from Credibly, you must meet our eligibility requirements, which include:
By meeting these eligibility requirements, you can qualify for a small business loan from Credibly and access the financing you need to grow your business. These criteria ensure that they can provide loans to businesses with a proven track record of stability and revenue generation, helping secure financing for your business growth.
Its two main products, working capital financing and MCAs, use factor rates instead of traditional interest rates. Depending on the lender, other loans may use factor rates or an interest rate with an amortization schedule. Direct lending offers a variety of financial products, catering to different business needs and durations.
With a factor rate, you get flat interest applied at the time of the loan. This means you can’t save money on interest by paying it off early like you could with an APR.
Factor rates to make it easy to calculate your interest, though. Suppose you took out a loan or cash advance for $100,000 with a factor rate of 1.15. You’d multiply the principal by the factor rate to determine the full repayment amount:
$100,000 x 1.15 = $115,000
You’d pay $15,000 in interest to borrow $100k. You’d owe that interest whether you pay it off in 3, 6, 12, or 18 months. The repayment term only impacts how much you pay per repayment period.
In addition, it charges origination fees, although it calls the fee an “underwriting fee” for the merchant cash advance. Either way, you’d pay 2.5% of the loan or advance amount.
The working capital finance product requires collateral worth up to 90% of the loan’s value. You would still need to sign a personal guarantee, which means the lender could go after your personal assets in the case of a default.
The lender might also require a UCC-blanket lien for working capital finance. There are no collateral requirements for MCAs.
While the application process is not quite as lightning-fast as some online lenders, you can potentially complete and close the loan application within 24 hours.
Visit the website and follow these steps to apply. Direct lending offers a streamlined application process, making it easier for businesses to access various financial products with relaxed eligibility requirements.
The first step is to complete the initial online application. You’ll enter your name, phone number, and email address. Then, you’ll enter your business information and select which loan you want. It takes about ten minutes to complete.
If you prequalify, the next step is to discuss the loan application with a funding agent. The agent will go over the amounts, rates, and terms and also discuss the documentation requirements.
Be prepared to provide the following:
The loan moves the underwriting process after you supply the required documentation. If approved, Credibly will send you a loan offer or offers. Select the best one for your business needs and cash flow.
Once you accept an approved loan offer, the lender transfers the funds to your bank account. In some cases, you’ll receive same-day funding, but it could take up to 48 hours.
The company provides a unique “Quick Draw” program for borrowers who accept less than the total amount they qualify for. If you were approved for a larger amount but took less and realize you need more money, you can use Quick Draw to upgrade to the maximum available amount. Direct lending offers flexible repayment options, allowing businesses to access various financial products tailored to different needs and durations.
The company will verify that nothing has changed before authorizing the Quick Draw increase. Eligible businesses must submit the request within 45 days of the original funding date. Other terms and conditions may apply.
Working capital business loans follow either a weekly or daily repayment schedule. Weekly repayments have different qualifications, so you will know if it’s weekly or daily before signing the loan agreement. The lender will set up automatic payments using ACH transfers to help keep the repayment process running smoothly.
You’ll repay the merchant cash advance with a daily remittance of your debit and credit card sales. The remittance rate is the percentage of your sales that goes to the MCA company. You will set up your automatic remittance with the company beforehand. Repayment begins after you receive the advance amount.
Businesses that repay the MCA early could be eligible for an early remittance discount. Credibly does not state how much the discount is for. Online reviews state you must repay the total amount in a single transaction to qualify. Consult the lender before paying early to ensure you are eligible for the discount.
The lending platform does not provide information on renewals for MCAs for working capital loans. Repayment information for their other products is unavailable as it would depend on the lender you work with.
One of the main benefits is the low credit score requirement. While most MCA companies accept a lower credit score, you can access the working capital loan with a credit score as low as 500.
The pre-qualification process is quick and easy. You can complete the online application form in ten minutes and find out if you prequalify in as little as four hours.
After prequalifying, you can finalize the application process as soon as 24 hours. After accepting an offer, you will receive your funds within 48 hours.
The company’s Quick Draw program allows you to increase your funding amount if you took less than the maximum available. The lender attempts to provide the right amount of funding so that you can meet your goals without paying interest on money you don’t need.
Credibly provides access to up to seven business financing products, including the coveted SBA loan program. Despite the broad loan availability, it still provides specialization in merchant cash advances and working capital business loans.
MCAs are an expensive way to borrow money, no matter where you go. However, with the early remittance discount, the company offers the chance to save money.
All short-term business loans carry higher interest rates, and this lender is no exception. While its rates are mostly competitive with those of other short-term lenders, they could still skew towards the higher end of financing costs.
Part of the reason Credibly’s costs are higher is because of its fees. You’ll pay an origination fee of 2.5% on both the merchant cash advance and working capital loan. In addition, merchant cash advances carry a $50 per month admin fee.
While the credit score requirements are low, you’ll still need at least six months in business to be eligible. Credibly has relaxed eligibility requirements of six months in business, making it accessible to newer businesses. Perhaps the biggest barrier to approval is the $15,000 monthly revenue requirement.
Here’s a quick summary of the benefits and drawbacks of Credibly business loans.
Pros:
Cons:
Yes, Credibly is a legitimate and reputable online lender. The company has been accredited by the Better Business Bureau since 2010 and has an A+ rating. It’s rated 4.8 out of 5 on Trustpilot with over 1,300 reviews. Through direct lending, Credibly offers a variety of financial products that cater to different business needs and durations.
Credibly will only perform a soft credit pull during the prequalification process. This lets you see what financing is available without impacting your credit score.
Credibly has mostly positive reviews online, but there are some negative ones. Positive reviews primarily discuss the ease of applying, quick funding, and outstanding customer service. Some business owners even mention their funding agent by name.
Other positive comments discussed the lower eligibility requirements. Several reviews stated that they could get them funding when other lenders couldn’t.
The negative reviews discussed the higher financing costs. Some complained about being deferred to another lender in the company’s network.
Other small business owners complained about confusion regarding the repayment structures. One user mentioned getting a merchant cash advance when they thought they were getting a line of credit but admitted they didn’t read the fine print on the loan agreement.
As an SBA lender, the company participated in the now-defunct PPP loan program. Several users commented on the difficulty of getting approved or canceling their PPP loans. However, PPP loans had issues for many lenders and borrowers, and since the program is no longer in effect, we feel we can move past those complaints.
Yes, Credibly reports on-time payments to the three major credit bureaus.
It offers very low credit score requirements, but the time in business and monthly revenue requirements could disqualify some companies. Other issues discovered during underwriting may also trigger a denial.
If you applied and received a denial letter, it should explain the reason for the determination. If not, or if you need more information, contact the lender to discuss why they denied your loan application.
Fortunately, there are many online lenders and lending marketplaces to consider if Credibly denies your loan request. You can typically find lenders that provide merchant cash advances and working capital loans.
In addition, many lenders offer term loans, equipment financing, lines of credit, and invoice factoring. Although it might be more difficult to find online SBA lenders, there are still many options to consider for SBA loans.
Credibly is a viable lending option for business owners who need quick funding but don’t have the credit score to qualify for a traditional loan. Direct lending offers more accessible options compared to traditional banks, providing various business loan options with relaxed eligibility requirements. The costs are higher than some short-term lenders, but it may be worth it if you can’t get approved elsewhere.
Startups, businesses younger than six months old, or those earning less than $15k monthly must find a different lender. More established businesses with good to excellent credit can likely find cheaper alternatives with similar or faster funding times.
Based on user reviews, loans, rates, and customer feedback, we rate Credibly as 4 out of 5. It is a lender worth considering, but keep an eye on the rates to see if you can find a lower-cost option.
Disclaimer: The Credibly trademark is owned by Credibly and its use herein is for reference purposes only and it does not indicate sponsorship or endorsement from Credibly.
Fraud Disclosure:
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