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Reviews, Small Business

Wells Fargo Small Business Loan Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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There are many online lenders offering small business loans these days, and for good reason – banks are notorious for their long underwriting process. If you want to get funding quickly, a bank typically isn’t your best option.

Getting a small business loan with Wells Fargo won’t take months, but it may take a little longer than an online lender.

It offers quite a few small business loans that are worth a look, especially its Fast Flex and Wells Fargo Business Loan Term Loan. The Term Loan is the most basic of its small business loans, and a good fit for any business looking to expand or get working capital.

You don’t have to have any accounts with Wells Fargo to apply for a Term Loan, but you will need to apply in person, so having a branch nearby is ideal.

A Fast Flex loan can get you instant approval, but you need a Wells Fargo checking account with deposits over $50,000 open at least 1 year.

Wells Fargo Small Business Loan Details

With a Wells Fargo small business loan, you can borrow $10,000 to $100,000 on 2, 3, 4, or 5 year terms. Fixed APRs start at 7.5% – and vary based on the length of the loan and your credit history.

There’s a monthly repayment plan with this loan and a $150 opening fee. No collateral is required.

Fast Flex Loan Details

A Fast Flex loan has a short, 1 year term, and ranges from $10,000 – $35,000. You can apply online, get funds as soon as the next business day, but there is a one time $195 opening fee.

Interest rates start at 13.99%, not including the impact of the $195 fee.

Use this loan if you need money quickly, but expect to pay a higher rate and the higher upfront fee as the cost of faster money. It will be more expensive than a standard Wells Fargo Small Business Loan if you pay it off in a year, but it will be less expensive than many alternatives that can get you the money the next business day.

The Pros and Cons of a Wells Fargo Small Business Loan

Pro: Unlike other bank loans, this is an unsecured loan, so Wells Fargo doesn’t require any collateral.

Con: Wells Fargo will send a check directly to you once you’ve been funded. Most online lenders will deposit the amount you’ve been funded for directly into your business bank account. While Wells Fargo claims to have a quick process, this could slow things down a bit.

Pro: Many lenders are only offering loans up to one or two years. Having a five-year term could make payments much easier to manage, as they’ll be lower. This is beneficial when paying once a month, as payments will be larger.

Con: If getting paid by check wasn’t inconvenient enough, to apply for a small business loan with Wells Fargo, you also need to apply in person. While there are plenty of branches located in the United States, you might not have time to set up an appointment and go. Online lenders make it easier to apply as you can upload all your documentation through their portals.

Pro: The APR range isn’t bad at all when compared with other lenders. Some are as high as 40%, and 4.25% is a very low starting point.

What Businesses Are Eligible For a Loan With Wells Fargo?

Wells Fargo says this loan is “ideal for established business owners who want credit for business expansion, leasehold improvements, and other business opportunities.”

It further expands on this in its lending principles document. Wells Fargo takes the following into consideration when deciding whether or not to loan to a business:

  • Personal credit history of the primary business owner – timely payments and responsible use of credit are a must
  • Your company should have decent cash flow, enough to support making payments
  • Liquidity in the business – if you experience a slow season, Wells Fargo wants to make sure you have other means of repaying the loan
  • You have the best chance of being approved if you’ve been in business for at least 3 years
  • Your business credit should be clean. Wells Fargo won’t lend to businesses with judgments or liens in the past 10 years
  • Your business should be showing a profit, at least in the last two years
  • Ideally, you have five open lines of credit for a strong credit history

Even if you only meet most of these requirements, you still have a chance of being approved for a small business loan. Wells Fargo places a lot of emphasis on good, strong credit history as well as business cash flow. You need to be able to show that your business is capable of repaying the loan.

Application Process and Documents Needed

Wells Fargo offers a handy list of things you should have ready before applying on its website, but here are the most important things:

  • Business bank account number and balance (bring statements if possible)
  • Annual business revenue (having tax returns will help)
  • Personal bank account number and balance (for the owner applying)
  • Basic business and personal information

Wells Fargo states it takes around three business days to review your application and documents. Expect to hear back about an approval by then. Remember, you’ll get sent a check via express mail, so actually receiving the funds may take another day or so, and that’s if no additional documentation is needed.

If you’re not approved, it could take ten to fifteen days to hear back with an explanation of why you were denied.

The Fine Print

There are no prepayment penalties, annual fees, loan documentation fees, or closing fees associated with this loan.

However, there is an opening fee of $150. This can be waived if you choose to open a Wells Fargo Business Services Package, and include your loan as part of it. The additional benefit you get from opening an account with Wells Fargo is a 0.25% rate discount when you set up automatic payments.

Which Businesses Benefit the Most from a Loan With Wells Fargo?

Businesses with good cash flow and great business credit that also have owners with good personal credit will benefit the most. As stated, the business needs to show that it’s profitable. If you’re looking to expand because you’ve been experiencing rapid growth, now is a good time to apply for a loan.

If you’re struggling to pay off any debt you have, or worse, have liens or judgments against your business, you likely won’t qualify for a loan.

Additionally, business owners with a Wells Fargo branch nearby will benefit even more, as you must apply for a loan in person. The closer the branch, the more convenient it will be for you.

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Other Alternative Small Business Lenders

Wells Fargo does things a bit differently than online lenders. If you’re not a fan of having to drive to an appointment to receive a business loan, or don’t want to wait for a check to arrive in the mail, take a look at these alternative lenders.

Consider starting with LendingTree. The online marketplace empowers business owners to find the best deal for your business by allowing you to compare multiple financing options from various lenders in one place. You simply fill out a short form and may receive up to five business loan offers.

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LendingTree is our parent company

FundingCircle offers loans of $25,000 to $500,000 on terms of 6 to 60 months. Its interest rates range from 4.99% to 24.99%, and its origination fee ranges from 3.49% - 6.99%.

Your business must have over $150,000 in annual revenue and 2+ years of operating history. A profit must have been reported on one of the last two years’ tax returns. You must not have had any bankruptcies within the past 7 years, and no more than 5 tax liens in the past 10 years. A minimum credit score of 620 is needed to qualify.

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smartbiz SBA Loans offer financing on $30,000 to $5,000,000 with a terms of 120 to 300 months. APRs range from 6.25% to 8.50%, and the origination fee is 0.00% - 4.00%. You need at least two years in business (two years of tax returns must be filed), and positive cash flow. A minimum credit score of 600 is needed to qualify.

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Each of these alternatives also has a monthly payment.

Shop Around – It’s Worth the Time

While applying for a business loan online is easier than applying in person, it still pays to shop around for the best rates and terms. Small business loan programs vary wildly between lenders, and based on the industry your business is in, you could receive better rates from other lenders that have experience working with your industry.

If you think Wells Fargo has exceptional terms for your business, then it could be worth setting up an appointment to apply. However, don’t stop there – as long as you apply for business loans within a 30-day window, your credit won’t be impacted as much. Credit bureaus expect that you’ll shop around to find the best loan for your business, so take advantage.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Reviews, Small Business

Capital One Spark Cash Select for Business Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

Capital One Spark Cash Select for Business Review

Are you looking for a new business credit card? The Capital One® Spark® Cash Select for Business has competitive interest, cash back rewards and benefits that will protect your money and purchases.

The Credit Card Offer at a Glance

You need an Excellent/Good credit score to qualify for this, card, which is generally considered 750, or above. You must also be 18 years or older with a valid social security number or Tax ID. And if you already have a Capital One credit card it must be in good standing to be approved for the Capital One® Spark® Cash Select for Business.

Credit Card Rewards

There are two different ways to make cash back from your spending.

First, you can earn unlimited 1.5% Cash Back on every purchase. There’s no minimum that you need to spend in order to start redeeming your cash back. And you can choose to redeem it as a statement credit or check.

You can also earn a One-time $200 cash bonus once you spend $3,000 on purchases within 3 months from account opening. If you qualify for the extra bonus it’ll appear as a credit to your statement within 2 months.

Other Credit Card Benefits

The Capital One® Spark® Cash Select for Business comes with several valuable benefits. You can add employee cards to the account for free and earn cash back on their purchases. The card comes with $0 Fraud Liability, so if your card is lost or stolen you’re covered.

There’s a Purchase Security benefit that will replace, repair or reimburse you for items damaged or stolen within 90 days of purchase. And you can get extra warranty protection of up to a year on select items.

Fine Print and Fees

Overall this business card has very straightforward terms.  What you see is what you get and there are hardly any extra fees. For instance, foreign transactions don’t cost you anything. And there is a $0 annual fee and no balance transfer fee.

The fine print terms you need to be aware of come into play if you don’t pay your bill on time. Late fees can be up to $39. And the 0% APR intro deal will end if a payment is received late.

Penalty APR is 30.65% variable and will be applied to your account if two or more payments are late within a 12-month period. However you can be considered for standard APR once again if you make on-time payments afterwards for 12 consecutive months.

Pros and Cons

The big pros of this card are clearly the rewards and benefits.

Let’s face it. Business owners often make large purchases. So benefits like Purchase Security and extended warranties give you peace of mind because you’re covered if the unexpected happens. The unlimited 1.5% Cash Back on every purchase and lack of administrative fees will also save you money.

The only real con of this card is its eligibility requirements. If you don’t have excellent credit you’ll have to work on building it before you can apply.

Alternatives to the Capital One® Spark® Cash Select for Business

The Ink Business Cash℠ Credit Card from Chase is a business card with comparable benefits and rewards you should also consider.

Ink Business Cash℠ Credit Card

The Ink Business Cash℠ Credit Card lets you Earn $500 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening. Earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year. Earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year. Earn 1% cash back on all other card purchases with no limit to the amount you can earn..

Ink Business Cash℠ Credit Card

The information related to Ink Business Cash℠ Credit Card has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Ink Business Cash℠ Credit Card

Regular Purchase APR
14.74% - 20.74% Variable
Annual fee
$0
Rewards Rate
Earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year. Earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year. Earn 1% cash back on all other card purchases with no limit to the amount you can earn.

Out of the two cards, the Capital One® Spark® Cash Select for Business will benefit you the most if you travel internationally often. The Ink Business Cash℠ Credit Card charges a foreign transaction fee of 3% of each transaction in U.S. dollars. The Capital One® Spark® Cash Select for Business doesn’t charge a foreign transaction fee, so you can make international purchases without worrying about the extra cost.

Check Out Other Small Business Credit Cards Here.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Reviews, Small Business

LendingClub Small Business Loan Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Updated September 8, 2015

You might be familiar with LendingClub already, as it’s one of the leaders in the peer-to-peer lending industry. It’s well known for personal loans, but last year, it added small business loans to its product offerings.

Lending Club is also known for keeping rates down through its use of technology-based algorithms when determining when to lend. Human underwriters are barely touching the loans. As a result, savings in the form of lower rates are passed down to consumers and small business owners.

Let’s take a look.

LendingClub Small Business Loan Details

LendingClub allows you to borrow up to $500,000 with APRs ranging from 9.77% to 35.98% on terms of 12 to 60 months.

Fixed monthly payments are offered to help you manage your cash flow better.

Here’s a payment example from its website: if you borrow $50,000 on a 3 year term at 7.90% interest, and you have a 1.99% origination fee (totaling $995.00), you’ll actually receive $49,005.00 in your bank account and your monthly payment will be $1,564.51.

The Pros and Cons of a LendingClub Small Business Loan

Pro: LendingClub offers a great range of repayment terms – most small business loans offer 1 or 2 year repayment terms. This gives you a little more breathing room and might allow for lower monthly payments. LendingClub also presents its APRs as actual interest rates, rather than factor rates, which makes understanding your loan easier.

Con: LendingClub’s origination fee is on the higher side, depending on where you fall within the range. Many lenders have origination fees of around 3%. You’ll need to do the math to make sure that the loan is worth it if you have a 3.49% - 7.99% origination fee.

Pro: Unlike traditional loans with banks, LendingClub has a simple process. For example, it doesn’t require collateral for loans under $100,000, there are no appraisals done on the business, and visits to your business aren’t necessary.

Con: Only monthly payments are offered. While LendingClub says this helps businesses manage cash flow better, you need to analyze whether or not your business can handle such a big hit once a month. Sometimes, daily payments are less disruptive to cash flow as smaller payments are easier to handle.

Pro: LendingClub takes a more personal approach than other lenders, possibly because of its background in personal loans. If your business is experiencing a down period and you can’t afford to pay, it encourages borrowers to reach out to Client Advisors to work on alternative solutions.

What Businesses Are Eligible For a LendingClub Loan?

Your business must have two years in operating history, at least $75,000 in annual sales, and have no bankruptcies or tax liens within recent years. You must own 20% of the business and have fair or better personal credit to guarantee the loan.

LendingClub can’t loan to businesses in Iowa and Idaho.

There are no specific industries excluded on its website, but the ones it works with the most are: professional and personal services, retailers, restaurants, manufactures, automotive, health and wellness providers, wholesalers, and contractors.

Application Process and Documents Needed

When you apply for a small business loan with LendingClub, you’re getting a prequalification first. The application takes minutes to fill out, and you’ll receive multiple quotes upon completion.

The good thing about LendingClub is that it uses a soft credit pull at first to see if you’re eligible for a loan. That means your credit won’t be impacted. Only if you choose to move forward with an offer will a hard pull be used.

LendingClub states that once you’ve accepted a loan, you’ll be provided with a list of documents needed, and you can be funded in as little as 5 days total.

Only one guarantor can be on the loan, so if you own the business with someone else, decide who’s going to apply. Typically, it can help for the owner with better credit to apply.

You should have the following documents ready during the application process:

  • Bank statements from the last 3 months (include all business bank accounts used regularly)
  • Most recent business tax returns
  • IRS form 4506t (to verify you filed taxes)
  • Driver’s license/Photo ID
  • Business tax ID

LendingClub doesn’t specifically say what documents it might ask you for, but it pays to be prepared. The sooner you submit documentation, the sooner you’ll get funded. Documentation is usually what slows the process down.

The Fine Print

There are no prepayment penalties or hidden fees with LendingClub. There is a one-time origination fee of 3.49% - 7.99% to be aware of, though. You can see how origination fees correlate with interest rates on this page of its website.

If you’re late making a payment, a late fee of $15 or 5% of the unpaid amount (whichever is greater) will be charged to your account.

If a payment is unsuccessful, you’ll be charged a $15 fee for each failed attempt to get the payment.

If your loan is under $100,000, LendingClub doesn’t require any collateral. Loans over $100,000 require a UCC lien on the business’ liquid assets.

Also, keep in mind that you can’t withdraw your request for a loan once it has been issued.

Which Businesses Benefit the Most from a Loan With LendingClub?

Businesses that meet the minimum requirements – 2 years in business and $75,000+ in annual revenue – will benefit the most from applying with LendingClub.

Businesses that can handle one large payment per month might also benefit more, due to LendingClub’s monthly payment structure. If your business has been having a rough time, or is in a slow season, evaluate whether or not you can handle the payments.

It’s also worth analyzing the return you want to get with this loan. What are you planning on using it for? Are you expanding? Hiring new employees? Purchasing inventory or equipment? You want to make sure the rates and terms offered to you make sense depending on what the purpose of the loan is.

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Other Alternative Small Business Lenders

LendingClub is a bit unusual considering it’s a peer-to-peer lender. Institutional investors are responsible for funding these small business loans, not actual banks.

If you’d like to take a look at other peer-to-peer lenders, you can check out Dealstruck and Funding Circle.

Funding Circle is LendingClub’s closest competitor, offering loans from $25,000 to $500,000 on 6 to 60 month repayment terms. Its origination fees range from 3.49% - 6.99%, and interest rates range from 4.99% to 24.99%.

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Dealstruck is offering loans from $50,000 to $500,000 on terms of 12 to 48 months.

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Would you rather be funded by a single institution? OnDeck and Fundation are two other alternatives worth checking out.

OnDeck offers loans between $5,000 and $500,000 on terms of 3 to 36 months. Its origination fee is 2.50% - 4.00%, and you only need one year in business and $100,000 annual revenue to qualify. OnDeck loans come with fixed daily payments.

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Fundation offers loans up to $100,000 for working capital, and up to $500,000 for business expansion. 12 – 48 month terms are available for its working capital loan, while 2, 3, and 4-year terms are available for its business expansion loan. APRs range from 8.99% to 29.99%. Fundation allows for twice a month payments.

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Shopping Around Can Be Worth the Trouble

As a small business owner, you’re probably low on time as it is. The thought of applying with a bunch of different lenders to chase down the best rates and terms might not seem appealing. However, if you really need the money and are low on reserves, then you should be thinking about the financial health of your business.

Lower interest rates have the potential to save you thousands. It’s worth shopping around to find the best deal for you and your business, and if you do so within 30 days, your credit score is minimally affected. Applying with lenders like LendingClub is even better because you can receive quotes without having your credit impacted.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.