Fora FinancialÂ (read our review) is one of the more reliable online lenders in the business. While they don’t necessarily excel in any one area, they do provide short-term loans and merchant cash advances at fairly reasonable (for the industry) rates and are willing to work with new businesses. If Fora doesn’t sound like your cup of tea, what other options are available?
Here are some business funding alternatives to Fora Financial.
Square customers looking for small loans with low rates
|Time in business:||N/A|
Square (read our review) isn’t primarily known for loans, but they do offer some of their point of sale hardware customers loans ranging in size from $500 to $100,000.
These loans come at lower rates (1.1 – 1.16) than you’ll probably get from Fora, and Square’s payment processing infrastructure makes it easy to set up the automated repayment process. If you’re looking for convenience and don’t mind your payment services company also being your lender, it’s a pretty good deal.
How To Apply For A Square Capital Loan
Unfortunately, the process for determining who is eligible for a Square Capital loan is a bit opaque. Rather than apply at your leisure, Square will, at their leisure, send email notifications to qualifying customers. That means that you may not qualify for funding through Square Capital when you need it.
If you do receive an offer, the process is extremely easy. You decide how much you want from the options offered, then Square will use the information they already have on file to process your application. In some cases they may ask for additional documents.
It’s best to consider Square Capital as a perk that comes with being a Square customer.
New businesses looking for a transparent lender
|Time in business:||6 months|
|Revenue:||$15K/yr + avg. daily balance over $1K for expansion loans|
It can be hard for new businesses to get funding right out of the gate. One of the nice things about Fora is that they’re willing to work with businesses that have been around for only three months.
Credibly (read our review) isn’t quite so lenient, but they are willing to work with businesses that have only been in business for six months. Like Fora, Credibly offers some variety in their financial products, although they’re more focused on installment loans than merchant cash advances. Expect slightly more stringent lending guidelines than you will find with Fora.
One nice aspect of Credibly is that they’re more transparent than most of their competitors, making it a little easier to know what you’re getting into. Credibly’s rates are comparable to Fora’s, falling between 1.09 and 1.36.
How To Apply For A Credibly Loan
You can begin your Credibly application online on their website. This is essentially a screening process. If you make the cut, you’ll be contacted by a representative who will prompt you to provide the following information:
- Business lease or mortgage agreement
- Picture ID of all owners
- Business tax returns
- Bank statements for the last three months
- Basic personal information including Social Security number
Credibly’s easy qualifications and above-average transparency make it a decent choice for new businesses without a lot of options.
Businesses looking for a flexible funder
|Time in business:||1 yr / NA(invoice factoring)|
|Credit score:||600/ NA (invoice factoring)|
|Revenue:||$10K/month / NA (invoice factoring)|
Breakout CapitalÂ (read our review) offers a number of short-term funding solutions for new businesses. In fact, flexibility is one of their biggest draws.
Breakout’s loans operate on a principle similar to a line of credit, making it easy to tap additional funding in the future without racking up punishing fees or double-dipping. While Breakout’s rates are still on the high side — as are those of most online lenders — the company takes pains not to pull too many unexpected fees or terms of service changes.
They also offer a niche form of financing that can be useful to businesses that want to borrow against their unpaid invoices. Invoice factoring allows businesses to sell unpaid invoices to a lender at a discount. Rather than owing interest, you’ll sign over your invoices to Breakout, who will then advance you a percentage of the invoice’s worth. The advantage here is that you can bypass credit checks and similar prerequisites. You just need to have invoices to sell. Note that Breakout doesn’t provide invoice factoring in-house, but rather partners with invoice factoring companies to offer the service.
How To Apply For A Breakout Capital Loan
You can fill out a truncated application at Breakout Capital’s website, or bypass that part and contact them by phone. Expect to have to provide documents that establish your identity, your business’s details, and your revenue. Breakout will then determine which of their products you qualify for.
Breakout is a great option for businesses that need flexible lending. Both their lines of credit and invoice factoring give you control over when and if you want to tap your credit resources. This freedom comes at a premium, however.
Profitable businesses with decent credit, businesses looking for a line of credit
|Time in business:||1 year, some exemptions for 6 months|
|Revenue:||$100K (for 6 month consideration)|
Street Shares (read our review) may sound like an arcade game, but they’re actually among the more conservative online lenders, offering installment loans and lines of credit.
The credit requirements here are a bit higher than many of their competitors, but businesses with good credit can take advantage of Street Shares’ lower rates and weekly (rather than daily) repayment process.
Profitable companies should take special notice as Street Shares will work with companies that are less than a year old, provided they’ve earned $100,000 in revenue at the time of application.
Street Shares charges interest just like a bank loan. You’re looking at APRs between 7 – 39.99%.
How To Apply For A Street Shares Loan
Like most online lenders, Street Shares lets you begin your application on their website. There you can submit some basic information about yourself, your business, and the financial products you’re interested in.
If you’re approved, you’ll be contacted by a representative and asked to provide additional information. The documents will vary depending on the product (if you’re provided with multiple loan offers, you can decide between them).
Street Shares is a little harder to qualify for than some of the other options here, but their competitive rates and the flexibility of their products make them a good choice for businesses that can make the cut.
New companies needing a flexible lending plan
|Time in business:||3 – 6 months|
|Credit score:||530 – 600|
BlueVine (read our review) operates in a similar niche to Breakout capitals, offering both lines of credit and invoice factoring. Note above that the lower “time in business” and “credit score” requirement ranges are for invoice factoring, while the higher ones are for lines of credit. The line of credit product isn’t available to businesses based in Kentucky, Tennessee, Nevada, Vermont, New Hampshire, or either of the Dakotas.
BlueVine only assesses a fee (1.5%) on their lines of credit when you draw upon them, but you’ll want to make sure you pay them off quickly. Interest accumulates weekly at a rate of 0.3% to 1.5% (this is not an APR).
BlueVine does their invoice factoring in-house. If you choose to use this service, they’ll set up an account that will receive your invoice payments from B2B transactions. When you receive an invoice, you can then decide whether or not you want an advance on it. If you choose to, Bluevine will advance you between 85% – 90% of its value. When the invoice is paid, you’ll get a rebate on the remaining amount, minus any accumulated fees.
How To Apply For A BlueVine Loan
You can begin the application on BlueVine’s website by creating an account and answering some questions about your business. You’ll then have to provide read-only access to your bank account or three months worth of bank statements. You can create invoices in BlueVine’s interface or connect your QuickBooks, Xero, or FreshBooks account.
In addition to the usual information like income and creditworthiness, BlueVine also considers your transaction volume and advertising strategy.
New businesses that haven’t had much time to establish themselves, but have good fundamentals, can find a lot of flexibility with BlueVine.
Alternative lending is a highly competitive market with a huge number of options for businesses looking for non-traditional sources of funding. Finding a lender that will meet your needs at a reasonable rate can take some work, but it’s worth the effort.
Need more information? Check out our small business loan comparison.
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