[2022 Update: StreetShares no longer offers small business financing, which is a shame because they had an excellent product line. The company now focuses on its Atlas platform, which provides a technology solution for banks and credit unions servicing small business customers.
The following lender review analyzes the loan products the company used to offer, but keep in mind that this is all out of date now.]
StreetShares connects business owners to financing programs to help their companies grow. The lending platform began as a financing solution for veterans-owned businesses but expanded to include financing for all small businesses.
If you’re a small business owner considering financing through StreetShares, we can help guide you with answers to these questions:
StreetShares is a financial technology (fintech) lending platform connecting business owners to investment lenders through its peer-to-peer network. The company launched in 2014.
The company’s founders are veterans as well as experienced bankers. They formed StreetShares to help military veterans secure small business loans to grow their companies.
In 2016, the online lender expanded its loan products to include any creditworthy business. In 2018, StreetShares began collaborating with credit unions and community lenders to service small business customers.
That collaboration resulted in the development of the Atlas platform. Atlas is a robust fintech platform for community banks and credit unions. StreetShares also participated in the paycheck protection program (PPP) loan program during the Covid-19 pandemic.
The company is based in California and participates in the California Finance Lender Loans program under the Department of Financial Protection and Innovation. MerdianLink® acquired the company in March 2022.
StreetShares provides access to small business term loans, business lines of credit, and contract financing. Let’s review the various loan options.
StreetShares offers both secured and unsecured term loans ranging from $2,000 to $100,000 with terms between 3 and 36 months. The actual amount you qualify for depends on your annual revenue.
Typically, StreetShares loan amounts equal 20% of your annual revenue up to the loan cap of $100,000. Unsecured loans don’t have collateral attached, while secured loans include collateral.
The company also charges an origination fee on term loans, which is either 3.95% or 4.95%, depending on your loan amount and credit.
StreetShares’ business line of credit ranges from $5,000 to $100,000 with terms between 3 and 36 months. Interest rates run between 6.5%-39%.
Borrowers must make a minimum draw of $5,000 within the first 60 days after the company funds the line of credit. While there is no origination fee for a line of credit, the company does charge a 2.95% draw fee.
If your small business receives a government contract, it might be weeks before you receive the payment. StreetShares’ contract financing turns the invoice into immediate working capital.
The company essentially purchases the government invoice from you. Your business receives 90% of the contract amount upfront, and StreetShares retains 1% as their fee. The remaining 9% is paid out to you when the government agency pays the invoice.
The qualifications are the same for the term loan and business line of credit. Applicants must meet these requirements:
In addition to the minimum qualifications, borrows must meet basic eligibility requirements.
StreetShares requires applicants to have a business bank account unless they’re sole proprietors. Applicants must own at least 21% of the business for loans under $50,000. Applicants must own at least 51% of the business for loans over $50,000.
StreetShares reviews your business credit score using the Small Business Financial Exchange (SBFE) but does not set a minimum business credit score requirement. The company does require at least three years since any bankruptcy.
While StreetShares doesn’t require collateral on all business loans, it does require a personal guarantee. Depending on your business’s creditworthiness, it may require multiple guarantors.
StreetShares’ APRs range from 7% to 39%, and the company will never go over 39%, making it one of the more affordable short-term lenders. The company provides fast funding, typically 2-5 business days, but not as fast as some alternative lenders. For comparison, some lenders offer next-day or same-day funding.
The company helps veteran-owned businesses, and it’s suitable for new businesses. A small business only needs six months of business history to qualify.
There are some restrictions on the availability of StreetShares business loans. The company won’t provide funding to businesses operating from a home address.
Sole proprietorships in Nevada, North Dakota, South Dakota, Nebraska, Wisconsin, New York, and Delaware are not eligible for StreetShares. In addition, partnerships in New York aren’t eligible for the term loan.
StreetShares does not provide funding to the following industries:
All applicants start by completing an online application to determine pre-eligibility. After that, you might need to provide additional information. The total time to apply, from the online application to the final credit decision, takes less than a week.
Complete the StreetShares online application. You will provide basic information about your business, such as your business’s name, address, phone number, and email address.
You’ll also indicate how much you’re looking to borrow. Applicants also need to provide some personal information, such as their social security number. Applicants must own at least 21% of the business to apply and 51% of the business if they’re looking for a loan over $50k.
If the company determines you’re eligible, the next step is to provide documentation. The specific documents you need to provide depend on the loan type, but you should be prepared to provide the following:
StreetShares will perform a soft credit pull.
After providing the necessary documentation, the StreetShares underwriting team completes the review of your application. Since the company is a peer-to-peer lending network, you will likely receive multiple offers from their lending partners. Select the loan that best meets your needs and budget.
StreetShares transfers the money to your business checking account once you accept an offer. The funding time after accepting an offer is generally 2-3 business days.
Borrowers repay StreetShares in automatic weekly installments. The weekly payments begin precisely one week from when you receive the funds.
StreetShares loans are amortizing, and there’s no prepayment penalty, so paying off the loan early saves on interest. Borrowers become eligible for renewal on loans or lines of credit after 6 months or after repaying 60% of the borrowed amount.
Borrowers with the business line of credit must draw funds from their line within 60 days and are limited to 3 draws in a 60-day period. The minimum draw amount is $5,000.
When drawing funds from your line of credit, there is a 2.95% draw fee. Repayment follows the same schedule as term loans with automatic weekly payments.
For contract financing, the amount you borrowed is repaid when the government pays the invoice. StreetShares will retain their 1% fee and issue the remaining funds to you.
StreetShares was built with military veterans in mind. While the company doesn’t explicitly state veterans receive better options, it still understands and addresses the unique concerns of veterans-turned-business-owners.
The company also offers a relatively quick and painless application process, like other alternative lenders. StreetShares also funds loans quickly, as most approved borrowers receive their money in 2-5 business days.
Business loans from StreetShares are generally more affordable than other short-term lenders. Qualified businesses get an APR as low as 7%, and no APR exceeds 39%, depending on your credit. Since the loans are fully amortized, you can also save money on interest when you pay the loan off early.
StreetShares business loans are also suitable for younger businesses. You only need 6 months of business history to qualify, whereas some lenders require a minimum of 2 years.
The maximum loan amount is $100,000, which limits what small business owners can do with the funds. The actual amount you receive is only 20% of your annual income.
There seems to be some inconsistency around the company’s customer service. While several users are happy with the service, others state the company is challenging to reach and only provides vague information about what’s available.
The limitations by state and industry also present a disadvantage for small businesses in those areas or sectors. The funding speed is an advantage compared to traditional lenders and a disadvantage compared to other alternative lenders.
The company does not provide funding to business owners with a credit score below 600. In addition, you cannot build your credit score when paying off a StreetShares loan.
We prepared a pro and con list for a quick summary.
Pros:
Cons:
Yes, StreetShares is a legitimate and trustworthy company. It has an A+ rating with the better business bureau and a 2.8 out of 5 rating on Trustpilot.
The company signed the Small Business Borrower’s Bill of Rights, which is a list of rights from the Small Business Lending Coalition intended to protect business owners. It demonstrates the company’s willingness to provide transparent service.
Positive reviews discuss the ease of the application process and the speed of funding. While StreetShares is not as fast as some alternative fintech lenders, it’s significantly faster than a traditional lending institution.
Several users found the customer service team extremely helpful and knowledgeable. Other users commented that they felt customer service overpromised and underdelivered on available loan products and amounts.
Some customers complained about high fees and frequent repayments. Others complained about being denied due to their industry or state.
Yes, StreetShares offers lending options to non-veteran business owners. While the company was founded on the mission of supporting veteran business owners, it expanded to all small businesses in 2016.
StreetShares still markets heavily to veterans, however. Some online reviews suggest veterans have a lower credit score requirement than non-veterans. The company’s website states that veterans make the best business owners due to the leadership skills developed in military experience.
The company’s Patriot Business Line of Credit is branded for veterans. In addition, the company offers promotions in conjunction with USAA Bank, which is a banking institution exclusive to military veterans. In addition, the company offers some exclusive benefits, such as veteran business bonds.
No, StreetShares does not report to credit bureaus. Small business owners looking to build their credit by making on-time payments on a business loan must find a different lender.
No, StreetShares only offers business financing.
StreetShares is generally easier to qualify for, but you might be denied if you don’t meet the minimum requirements. In addition, you won’t get funded if you’re in a restricted state or industry.
It’s also possible that the company’s underwriting team finds something, such as a cash flow issue, that could trigger a denial. Applicants can reapply in 60 days if they’re denied.
If you applied and received a denial letter, then that should explain why the reason for the denial. If not, or if you need further information, you can contact StreetShares to discuss it in further detail.
If StreetShares doesn’t work for your business, there are plenty of other lenders to consider. You should be able to find a business term loan or business line of credit. There are also options for bad credit business loans if you were denied because your credit score is below 600.
StreetShares is best for newer small businesses that don’t have the credit score to qualify for a traditional business loan. Veteran-owned businesses also benefit from the company’s product lines.
More established businesses with good credit scores can find higher borrowing amounts and better rates. However, if you need the money quickly and the $100k limit is not a problem, then StreetShares makes sense as a lending option.
Based on user reviews, loan products, and the company’s reputation, we rate StreetShares at 3.3 out of 5. The company is excellent for a quick and easy application, and we love the company’s mission of supporting veterans who sacrificed so much. The company loses points for the loan limits and inconsistent customer service.
2022 Update: StreetShares stopped offering small business financing and now focuses on its Atlas platform. Community lenders and credit unions can visit the StreetShares website to learn more about their opportunities with Atlas. The Atlas platform also includes a small business owner hub providing resources and loan payment options to business owners.
Disclaimer: The StreetShares trademark is owned by StreetShares Inc. and its use herein is for reference purposes only and it does not indicate sponsorship or endorsement from StreetShares Inc.
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.
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