Alternative Lending Options: Finding the Top Non-Bank Business Loans

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Starting a business can be difficult. Finding funding for a business can be even harder. If you want to work with the best business financing companies, you’ll have to do some research, but it will be worth it.

Being in business can be stressful enough, so it’s a good idea to find a lender that is flexible, responsive and can offer the best terms and rates for the financial products you’ll need to support your business. Check out these twelve alternative lending options and discover which one best fits your financial situation.

Choosing the right alternative lending company

You’ll want to be very selective when considering alternative lending companies. Understanding the terms they offer is important so you are not locked into a deal that isn’t right for you or your business.

For example, if you are looking for equipment financing, but you are working with a lender that specializes in lines of credit, you may not get the best rates and terms available for your business. A lender that requires you to personally pledge assets is not a great fit for you if you don’t own anything to pledge.

Another consideration is working with a lender that understands your industry. The underwriting process is designed to mitigate risk for lending institutions. If they do not understand your business or industry, they may deem it risky.

Some things to consider when looking for the best alternative lending option:

  • Type of financing offered: This includes lines of credit, equipment financing, etc.
  • Terms: This includes interest rates, application fees, length of loans, etc.
  • Requirements: Personal credit score or amount of time in business
  • Speed: How quickly can a lender fund your loan?

The good news is that there are plenty of players, old and new, in the small business financing space. Once you understand your needs, you can get rates and terms from a few lenders and then choose the one that works best for you and your business.

OnDeck Capital

Loans offered: OnDeck Capital offers offers small business loans to U.S.-based companies. OnDeck Capital’s products include business loans, lines of credit and equipment financing.

Terms: OnDeck Capital’s short-term loans range from 3 to 12 months. Its long-term loans are from 15 to 36 months.

Fees: For the terms loan, there are origination fees based on whether you’ve gotten a loan from OnDeck before.

  • 1st loan: 2.5 to 4 percent of loan amount
  • 2nd loan: 1.25 to 3 percent of loan amount
  • 3rd+ loan: 0 to 3 percent of loan amount

The line of credit has a $20 monthly maintenance fee. The fee is waived for six months if you draw $5,000 or more in the first five days after opening your account.

Requirements: You must be in business at least one year and have over $100,000 in revenue over the last 12 months. A personal credit score of over 600 is required. Your business cannot be in one of the restricted industries OnDeck Capital will not lend to.

Time to funding: Loan funds can be disbursed as fast as one business day.

OnDeck

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CAN Capital

Loans offered: CAN Capital provides term loans and merchant cash advances.

Terms: Loan terms last from 6 to 18 months.

Fees: There is a 0.00% - 3.00% origination fee for term loans. MCAs have a $395 administrative fee.

Requirements: Term loans require a personal guarantee from the owner and more than six months in business. The business should have at least $150,000 in gross revenues. MCAs don’t require any collateral.

Time to funding: Funds can be in your account in as little as two days.

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Credibly

Loans offered: Credibly offers working capital loans, business expansion loans and MCAs.

Terms: Working capital loan terms are from 6 to 18 months. Business expansion loan terms are for 18 or 24 months.

Fees: For all loans, there is a one-time setup amount that is 0.00% - 2.50% percent of the loan or total cash advance.

Requirements: For the working capital loan and MCA, Credibly requires the applicant to have a FICO score of 500 or higher, more than six months in business and $15,000-plus in average monthly bank deposits. The business expansion loan requires applicants to have a FICO score of at least 600, more than three years in business and $15,000-plus in average monthly bank deposits along with $3,000-plus in average daily balances.

Time to funding: You can receive funds in your account as soon as the same day.

Credibly

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All loans through Credibly are originated by WebBank, member FDIC.

National Funding

Loans offered: National Funding offers small business loans, along with equipment financing and leasing. For the small business loans, National Funding as a number of options:

Terms: Small business loans are for amounts between $5,000 and $500,000.

Fees: Information not available online.

Requirements: Small business loans require at least one year in business, $100,000 in annual gross sales and three months of bank statements. Equipment financing and leasing requires at least six months in business, a FICO score over 620 and an equipment quote from a vendor.

Time to funding: Funds can be received in as little as one day.

National Funding

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Fora Financial

Loans offered: Fora Financial offers small business loans and MCAs.

Terms: The term on Fora Financial’s small business loans is up to 15 months. The MCA doesn’t have a set term.

Fees: Fees are based on individual and/or business credit profiles and determined at the time of approval.

Requirements: The small business loans requirements include: at least six months in business, $12,000 minimum in gross sales and no open bankruptcies.

Time to funding: You can receive funds in as little as 72 hours after your loan approval.

Fora Financial

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The Business Backer

Loans offered: The Business Backer offers term loans, MCAs, lines of credit and SBA loans.

Terms: Terms will depend on the type of loan you choose:

  • Term loans for $5,000 to $350,000 have one- to three-year terms
  • MCAs for $5,000 to $200,000 have daily weekly or semi-monthly payments
  • Business lines of credit for $5,000 to $150,000 have one- to two-year terms
  • SBA loans from $3,000 to $350,000 have terms up to 10 years

Fees: Fees vary based on loan product.

Requirements: Businesses must have a minimum of one year in operation and $180,000 in annual gross revenue. Then you can begin the prequalification process for a loan.

Time to funding: Once you accept The Business Backer’s offer of funding, typical closing times are only a few business days.

The Business Backer

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BlueVine

Loans offered: BlueVine offers invoice factoring and lines of credit.

Terms: Lines of credit for up to $250,000 can be paid back weekly over six or 12 months. Invoicing factoring limits can go as high as $5 million.

Fees: Fees are based on individual and/or credit profiles and determined at the time of approval.

Requirements: For the BlueVine line of credit, you’ll need a FICO score of 600 or higher, more than six months in business and at least $100,000 in revenue. For invoice factoring, you will need a FICO score of at least 530, more than three months in business and $100,000 in annual revenue. Your business must serve other business customers.

Time to funding: BlueVine responds to applications within 24 hours. For funding, you can choose between ACH electronic transfers or bank wire transfers. ACH transfers usually appear the next business day, but could take up to three days.

BlueVine

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Forward Financing

Loans offered: Forward Financing offers a variety of financing options up to $300,000 based on your business needs. To find out the products you are eligible for along with related rates, terms and fees, you must complete a loan application with Forward Financing.

Terms: Term varies based on business and product.

Fees: Fees vary based on business and product.

Requirements:

  • Owner’s name
  • Owner’s Social Security number
  • Business name
  • Business employer ID or tax ID
  • Recent bank statements for the business

Time to funding: Information not available online.

Forward Financing

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Kabbage

Loans offered: Kabbage has several small business financing options of to $250,000. Unsecured loan products include:

  • Business lines of credit
  • Working capital loans
  • Online loans
  • Professional loans
  • Commercial loans
  • Short-term business loans
  • Inventory loans

Secured loan products include:

  • Equipment loans
  • Merchant cash advance
  • Factoring
  • SBA loans

Terms: Kabbage offers 6– and 18-month terms for its loan options.

Fees: Your fee rate will be between 8.00% and 24.00% of the principal loan amount and is determined based on your business performance factors.

Requirements: You must have at least one year in business and have at least $50,000 in annual revenue or $4,200 per month over the last three months.

Time to funding: Approval can take minutes. After that, once the loan agreement is signed, funds are sent to an account of your choosing. Loans deposited via a PayPal account can be in your account in minutes.
Loans deposited to your business checking account can take up to three days to process, depending on your bank. You may also withdraw funds using your Kabbage Card. The loan proceeds are issued immediately in this case.

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Reliant Funding

Loans offered: Reliant Funding offers short-term loans, MCAs and equipment loans.

Terms: Terms and rates depend on the loan type and your business credit profile.

Fees: Information not available online.

Requirements: Must be in business with current owner for at least one year and have at least $100,000 per year in revenue with no open bankruptcies.

Time to funding: Loans can be disbursed as soon as one day.

Reliant Funding

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Expansion Capital

Loans offered: Expansion Capital offers various small business loan products from $5,000 to $500,000. Amount and terms will vary based on individual business qualifications.

Terms: Loans are offered for 4 to 12 months.

Fees: Terms, fees and rates may vary by application. To find out the amount you qualify for, along with related terms, complete an application.

Requirements: Must be in business for more than six months, have a personal credit score of at least 500 and annual sales of at least $100,000. The business must not operate in any restricted categories set forth by Expansion Capital.

Time to funding: You can receive a quote on your loan within 24 hours. Money can be deposited in your account as little as two business days.

Expansion Capital

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Rapid Finance

Loans offered: Rapid Finance has lending products that cover: small business loans, SBA bridge loans, MCAs and lines of credit.

Terms: Small business loan terms are up to 60 months and funding amounts range from $5,000 to $1,000,000.

Fees: Fees will vary based on the product and your business credit profile.

Requirements: For small business loans and MCAs, you must be in business for two years or longer and have monthly revenue of at $5,000 or more.

Time to funding: You can receive funds in as little as one day.

Rapid Finance

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Aja McClanahan
Aja McClanahan |

Aja McClanahan is a writer at MagnifyMoney. You can email Aja here

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