To learn more about LendingPoint and decide if it’s right for your needs, please continue reading:
Small business owners have more lender options than ever before. However, business loan lenders often require several months, if not years, of business history to qualify.
There are many fewer options for startup business loans. One riskier but still viable option is using personal loans to fund startup expenses.
LendingPoint is an online lender specializing in personal loans with lower qualifications than banks and much faster funding times. In addition, the online lender recently added some small business point-of-sale partnerships for companies to offer their customers term loans to pay for goods and services.
However, the online lender won’t work for every business or startup need. We can help you decide if LendingPoint’s options could work for your startup or sales process by covering the benefits, drawbacks, and application process.
Specifically, we’ll answer these questions and more:
LendingPoint offers loans and some merchant financing. It is a direct lender based out of Atlanta, Georgia. The company launched in 2016 as a personal loan lender and has since funded over $8 billion for consumers. LendingPoint has lower minimum loan amounts than many of its competitors.
LendingPoint’s main product is personal loans, but it has recently added small business merchant point-of-sale lending solutions. These options allow small businesses to offer financing terms to customers. LendingPoint personal loans stand out for their unique features.
LendingPoint offers personal loans with loan amounts ranging from $1,000 to $36,500, providing a broad spectrum to meet various financial needs. Borrowers can choose repayment terms from 24 to 72 months, allowing for flexibility in managing their monthly payments. This flexibility can be particularly beneficial for those looking to balance their loan repayment with other financial obligations.
It’s important to note that the minimum loan amount may vary by state. For instance, the minimum loan amount in Georgia is $3,500, while in Colorado, it is $3,001. This variation ensures that LendingPoint’s offerings are tailored to meet state-specific regulations and borrower needs.
LendingPoint offers business loans designed to help small businesses grow and expand. These loans can be used for various purposes, including debt consolidation, equipment purchases, and hiring new employees. With flexible repayment terms and competitive interest rates, LendingPoint’s business loans are an attractive option for small business owners looking to invest in their company’s future.
The application process is fast and easy, with decisions made in seconds, allowing businesses to quickly access the funds they need. However, it’s important to note that LendingPoint’s business loans may have higher interest rates and fees than those of other lenders. Therefore, it’s essential to carefully review the terms and conditions before applying to ensure that the loan aligns with your business’s financial goals and capabilities.
Founded in 2014 and headquartered in Georgia, LendingPoint has established itself as a reputable player in the personal loan market. The company holds an A+ rating from the Better Business Bureau and is accredited by the organization, reflecting its commitment to customer satisfaction and ethical business practices.
LendingPoint has also received an “Excellent” rating on Trustpilot, 4.8 out of 5 stars based on over 8,500 reviews, further underscoring its positive reputation among borrowers. LendingPoint’s mobile app has received high ratings, with an average of 4.2 stars on Google Play and 4.8 stars on the Apple App Store. The app offers features like budget assistance and loan management. In 2023, the Consumer Financial Protection Bureau received 49 complaints related to LendingPoint personal loans, but the company responded to all but one of the complaints in a timely manner. This responsiveness demonstrates LendingPoint’s dedication to addressing customer concerns and maintaining a high standard of service.
The financing company offers personal loans, which could be used for business in specific situations. It also offers merchant point-of-sale financing.
Let’s review how both programs work.
It’s important to note that minimum loan amounts can differ by state, affecting how much you can borrow depending on your location. Additionally, understanding the monthly payment during the loan application process is crucial, as it allows you to customize the terms that influence this payment.
Before we discuss using LendingPoint’s personal loans for business purposes, it is important to note that you should always separate your personal and business finances. Using personal loans for business carries increased risk.
The only time it might be advisable is when you’re an entrepreneur in the early startup stages and need fast access to capital to get your business going. We’ll discuss qualifications in the next section, but in addition to needing fast funding to start a business, LendingPoint loans are geared toward borrowers with credit scores in the 600-680 range.
When first getting your company off the ground, your business won’t have the revenue history that most business financing options require. A small personal loan can help bridge the gap until you qualify for a business lender.
Outside of business purposes, most consumer borrowers use personal loan funds for emergency expenses, medical or dental bills, home improvement projects, debt consolidation, and more. Funds from a LendingPoint loan can also be used for vacations, weddings, and other large expenses.
The online lender’s foray into small business provides merchant financing solutions. Small businesses can partner with LendingPoint to offer financing terms to customers at checkout.
LendingPoint offers customers an unsecured term loan to pay for goods or services. The lender pays you directly and then collects payment (principal and interest) from your customers.
Partners can offer the financing option with a link at the point of sale or by emailing the link. Customers can apply for financing, and LendingPoint handles the underwriting and approval process.
The program offers the following amounts: $500 – $20,000. It allows other merchants to sign up but is marketed explicitly to healthcare and contractors.
Healthcare clients include medical, veterinary, and dental providers. Patients can apply for a term loan to cover the costs of procedures, medicine, and more.
Contractor clients include those who provide exterior and interior home improvement services or maintenance and repair. Homeowners can use the loan to fund improvement or repair projects. Offering financing allows contractors to attract more customers and offer more services.
LendingPoint also offers a program for banks and credit unions to provide the company’s personal loans to their customers. Traditional financial services companies can obtain another funding source in their product suite.
The company doesn’t publish qualifications for its small business products.
Here are the qualifications for a LendingPoint loan:
The company doesn’t provide loans in Nevada or West Virginia. Its products are available in the other 48 states, and LendingPoint personal loans are available to borrowers in all states except Nevada and West Virginia.
When you initially apply, the company will perform a soft credit pull, which won’t affect your credit. This prequalification step helps you check the estimated rate without impacting your credit score. During prequalification, LendingPoint performs a soft credit inquiry that does not affect your credit score.
A hard credit check is conducted to officially apply for a LendingPoint loan, which can temporarily affect your credit score. LendingPoint reports payments to only two of the three major credit bureaus, which can affect how future lenders perceive credit history compared to rivals who report to all three bureaus. LendingPoint does not allow co-signers, securing, or joint loans, whereas other lenders often offer these options.
While the online lender doesn’t set a minimum credit score, most online reviews suggest the company specializes in lending to individuals with a personal credit score in the 600-680 range. LendingPoint requires a minimum credit score of 640 to qualify for a loan and typically requires a minimum credit history of 2 years.
The lender may charge an origination fee for personal loans ranging from 0% to 8%. The fee is based on your credit history, borrowing amount, and terms. LendingPoint charges an origination fee of up to 10%, which is common among lenders targeting fair- and bad-credit borrowers, while some competitors charge lower fees.
It will add the origination fee amount to your payback total. For example, if you receive a $10,000 loan with a 5% origination fee, the total repayment amount becomes $10,500. However, you can request that the $500 be deducted from your disbursement. Depending on the state, LendingPoint also charges a late fee of 5% of the payment amount, or $30.
Since the company doesn’t offer business loans in the traditional sense, it doesn’t have a business loan affiliate program. ISOs and business loan brokers cannot offer the lender’s loan services to their small business clients.
The company does not provide an application for merchant point-of-sale financing or platform lending. Small business owners should complete the contact form to start a conversation with the lender.
Applying for a LendingPoint personal loan is quick and easy. You can start the loan process by filling out the online application or calling the lender to apply by phone.
Once pre-approved, you can select the funding option and repayment structure that works for you. The loan then moves to final underwriting.
During underwriting, you might be asked to provide the following documents:
To qualify for a personal loan, you must meet specific criteria, including having a valid bank account. Borrowers must be at least 18 years old and have a valid government-issued ID to apply for a loan. LendingPoint accepts income from various sources, including employment and benefits, to qualify borrowers.
If approved, the lender sends your funds to your bank account via ACH transfer within one non-holiday business day. This quick funding process ensures borrowers can access their funds promptly after approval. LendingPoint typically funds loans as soon as the next business day after acceptance.
Your loan agreement will indicate your first payment due date and repayment frequency. You can set up automatic payments to avoid missing a due date.
The lender does not charge prepayment penalties if you repay the loan early. You can set up payments and make extra payments in the payment portal.
After six months of on-time payments, the lender may re-evaluate your loan and try to get a lower interest rate. In some cases, taking out a second loan with the company might be possible.
Small businesses that use this financing option are not obligated after receiving their payment. The loan service is between LendingPoint and your customers, and you are not liable if the customer defaults on the loan.
The company’s merchant product allows businesses to offer financing options to their customers. Providing financing helps you attract more clients and close more sales.
LendingPoint’s personal loans can provide startup financing in some situations. The loans are easy to qualify for and quick to fund.
The most significant drawback is that the lender doesn’t offer business loans in the traditional sense. Its financing options are mainly its personal loan product, which is geared towards helping a business’s customers pay for goods and services.
Personal loans are also a risky way to finance a startup business, and the lender’s origination fee is quite steep.
Pros
Cons:
LendingPoint is a legitimate online lender that provides personal loans and some small business financing options. It’s Better Business Bureau (BBB) accredited and has an A rating on the watchdog site. The lender is also a verified company on Trustpilot. LendingPoint responds to negative reviews with personalized responses from representatives. The company’s customer service hours are Monday through Friday from 8 a.m. to 9 p.m. ET and Saturdays from 10 a.m. to 4 p.m. ET.
LendingPoint has garnered an excellent reputation among its customers, boasting an average rating of 4.8 out of 5 stars on Trustpilot based on over 8,500 reviews. Many customers praise the company’s helpful customer service representatives, who are often highlighted for their responsiveness and support throughout the loan process. The fast and easy application process is another frequently mentioned benefit, with many borrowers appreciating the quick turnaround time for loan approvals and fund disbursement.
Additionally, some customers have reported being able to secure a lower interest rate after making six months of on-time payments, which can significantly reduce the overall cost of the loan. However, some customers have reported issues with the payment schedule and high interest rates, indicating that reviewing the loan terms carefully before committing is essential. Negative reviews about LendingPoint mainly stem from misunderstandings regarding the payment schedule or financial distress, indicating clarity issues for a small portion of users.
The LendingPoint underwriting process examines your credit and income histories. Low credit scores could trigger a denial while it doesn’t set minimum credit score requirements. LendingPoint uses artificial intelligence and data models to offer loans based on various factors, including job and financial history, income, and credit improvement.
In addition, issues in your credit or employment history could also cause the company to deny you. Even if you were initially pre-approved, you could be denied during final underwriting.
If you were denied, you would receive an email regarding the decision, including instructions for requesting a statement of specific reasons. You can also call the lender for more information.
Fortunately, small business owners have many online lender options specifically dedicated to small business loans. Since LendingPoint’s personal loans shouldn’t be used as business financing except in specific startup situations, you will likely find much better business loan options for your company with an actual business lender.
You should be able to find an alternative lender or business lending facilitator that can offer the following small business loans:
LendingPoint is best suited for aspiring entrepreneurs willing to risk using a personal loan for startup costs. It could also be a viable option if you are a contractor or healthcare provider looking to offer financing options for your customers.
Established businesses with a funding need should seek a small business lender offering actual business loans. You also have other options for providing buy now, pay later options for your customers.
While the lender is a reasonable option for online personal loans, we cannot rate it as a business lender since it technically doesn’t offer business loans. Even its point-of-sale financing option is an unsecured personal term loan used to purchase goods and services.
LendingPoint tends to have higher interest rates than some other lenders due to its focus on borrowers with lower credit scores. We highly recommend looking for other lenders for business financing options.
Disclaimer: The LendingPoint trademark is owned by LendingPoint LLC, and its use herein is for reference purposes only, and it does not indicate sponsorship or endorsement from LendingPoint LLC.
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