Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.
Updated on Monday, August 3, 2015
CAN Capital has been lending to small businesses since 1998. In total, it has provided over $5 billion in working capital to small and medium sized businesses in over 540 unique industries over that time.
With a focus on technology, it has a proprietary risk algorithm it uses to determine whether or not a business qualifies for a small business loan. Its focus is on business strength, such as sales and time in business – not credit.
As it has lower eligibility requirements compared to other lenders, CAN Capital can be a great solution for businesses with less than one year in operating history. Larger loan amounts are also available to businesses with multiple locations. If either applies to you, read on for more details.
CAN Capital Small Business Loan Details
CAN Capital offers small business loans ranging from $2,500 to $250,000 for businesses with more than one location. Terms range from 6 to 18 months.
The APR range is heavily dependent upon the type of industry your business is in, how much cash flow you have, your time in business, and how much revenue your business generates.
Daily payments are made with this loan.
You can get an idea of what kind of loan you qualify for by using the calculator here. For example, if your gross monthly sales are $15,000, you might be eligible for a loan between $2,500 and $12,000 on terms of 6 to 18 months. If you choose to borrow $12,000 on a 12-month term, your daily payment will be $62, and you’ll end up paying back a total of $16,201.
Be aware the amounts displayed on the calculator don’t necessarily reflect the type of loan you’d actually be approved for.
The Pros and Cons of a CAN Capital Small Business Loan
Pro: CAN Capital recognizes that businesses may experience trouble when paying back their loans. It encourages business owners to reach out to their account manager as soon as possible to work out an alternative plan.
Con: The repayment terms offered are relatively short compared with other lenders. This might be okay for inventory-based businesses (if you expect to sell the inventory you purchased quickly), but others may need a longer amount of time to pay their loan back.
Pro: There’s no prepayment penalty, and CAN Capital takes this a step further by offering a 6% discount to customers who pay their loans off early. It’s the only small business lender to do that (to our knowledge). Paying your loan off faster results in less of your money going toward interest. This is important, as online small business loans tend to be on the expensive side.
Con: CAN isn’t fully transparent with its origination fee or APR ranges available to customers. If you’re approved for a loan, make sure to read over all the details to get a good sense of how much the loan will cost you.
Pro: If you know of other small businesses in need of financing and want to recommend CAN Capital after funding with it, you can get a bonus by referring a business that completes the funding process.
Con: When comparing the maximum loan sizes with other lenders, CAN Capital doesn’t offer much. There are a few lenders offering small business loans up to $500,000, so if your business needs more financing, this might not be your best solution.
Pro: CAN Capital is one of very few small business lenders that has a “live chat” option. This is great for quick customer service. It doesn’t require the back and forth of email, or playing phone tag.
What Businesses Are Eligible For a Loan With CAN Capital?
Your business should have stable gross monthly revenue of $4,500 or more, and must have an operating history of at least 3 months to qualify.
The minimum credit score needed is around 550, which is on the lower end of the spectrum. However, it’s best if you don’t have any open liens, judgments, or recent bankruptcies on your report.
CAN Capital funds loans with the following industries: salons and spas, restaurants, online stores, automotive, medical and dental offices, trade and services, and more. Its loans are available in all 50 states.
Application Process and Documents Needed
CAN Capital’s application can be completed in 15 minutes or less, and it can provide funding within 2 business days. You can also get pre-qualified in less than 10 minutes by filling out the form on its site. You should expect to hear back from a representative within 24 hours after applying.
It’s recommended to have the following information and documents available:
- Business tax ID
- Photo ID
- Last 3 months of business bank statements
- The first page of your previous year’s business tax return
Documentation is often the number one cause of the process being held up. Having these things ready to go will make the funding process go quicker.
The Fine Print
There is an origination fee with this loan, although the representative we spoke with only said “it can typically be waived.” If you choose to apply for a loan with CAN Capital, be sure to clarify that before going ahead with funding.
CAN Capital doesn’t need personal collateral, but a personal guarantee is required.
Which Businesses Benefit the Most from a Loan With CAN Capital?
Its requirement of only 3 months of operating history is great for newer businesses generating $4,500 per month in revenue. If you already have solid cash flow, CAN Capital may be the best lender to go with, as no other lenders have requirements that low. The minimum credit score requirement of 550 also makes its loans very accessible.
That being said, time in business is still important, so this loan certainly isn’t just for newer businesses. If you don’t need a large amount of financing and have a solid track record, you might be able to secure good terms with CAN Capital.
You can use the funds to purchase inventory, technology, equipment, tools, and other assets that will enhance the services you provide.
You can also choose to use the funds for expansion, renovations, research and development, or any regular expenses you need to catch up with.
Other Alternative Small Business Lenders
If your business needs more than $150,000 and has only one location, or if you don’t want a daily payment, there are other options out there you should look into.
Funding Circle requires a monthly payment and you can borrow $25,000 to $500,000. Interest rates range from 4.99% to 24.90%, and its origination fee ranges from 3.49% - 6.99%. Repayment terms of 3 to 120 months are offered, which is great if you need a lower monthly payment. Your business needs 2+ years of operating history, $150,000 in annual revenue, no recent bankruptcies, and a minimum credit score of 620 to qualify.
Bond Street offers semi-monthly payments (on the 1st and the 16th each month) with loans ranging from $50,000 to $1,000,000. Its origination fee is 3.00% - 5.00%, and APRs range from 8.00% to 25.00%. Repayment terms are 12 to 36 months, which aren’t the best, but are an improvement over the 2 years CAN Capital offers. Your business needs 2+ years of operating history, $200,000 in annual revenue, and a minimum credit score of 660 (this isn’t critically important) to qualify.
Shop Around for your Best Loan
We know searching for a loan can be a time consuming process, but if you aren’t in dire, immediate need of funds, you should take the time to figure out which lender will offer you your best deal. If you think you’ll need ongoing funds for projects, expansion, or inventory, you’ll want to build a good relationship with your lender. CAN Capital states over 70% of their customers eligible for a loan renewal end up proceeding with it, highlighting the importance of going with the right lender the first time around. You don’t want to have to go through this process again in the future, do you?
Shop around within a 30-day window and your credit won’t be affected as much as it would be if you took months to do it. Lenders expect you’ll be in contact with their competition, and it works to your favor as you can try and negotiate your terms.