Credibly 2020 Review
Credibly Review 2020
As a small business owner, chances are high that at some point, you will need funding for your company. Whether you are looking to expand, need to make unexpected repairs, or want to stay afloat during tough economic times, the right loan can make or break your business.
What is Credibly?
Credibly is a highly rated small business lender, designed to provide funding options for companies in various stages of growth. There is a wide range of loan amounts with quick approval, flexible repayment terms, and reasonable underwriting requirements.
Currently, Credibly offers three small business financing products internally, along with additional business financing solutions through its partner network:
- Working capital loans
- Business expansion loans
- Merchant cash advances
- Lines of Credit, SBA Programs, Invoice Factoring, Equipment Financing, etc.
Each of these serves a unique purpose depending on the history of your business, where you currently stand, and what you intend to do with the funding.
Between the three internal funding options, qualifying small business can receive anywhere from $5,000 to $400,000, in as little as one business day, but Credibly’s external products extend up to $5,000,000. Funding through Credibly is much faster than a traditional small business loan through a bank, making it possible to reach your goals and get the capital you need now.
Credibly Loan Options
Credibly currently offer three funding products for small business owners: working capital loans, business expansion loans, and merchant cash advances.
Which you choose depends on what your business needs, how much cash is required, and the repayment terms you can afford. Between the three, though, you are likely to find the funding option that serves you best.
Let’s discuss each of the three options and what they entail, so you can know which is the right option for you and your small business.
Credibly Working Capital Loans
- Loans up to $400,000
- Term lengths between 6-18 months
- Factor rates as low as 1.15
Let’s say you’re the owner of a healthy small business. You have been running your company for some time now, building a satisfied customer base that translates into a steady, reliable revenue stream.
But now you’re looking for small business funding, whether to do something like expand your company, purchase new equipment, hire new workers, or even buy out a competitor. In this case, a working capital loan is probably the best Credibly product for you.
Working capital loans are flexible, short-term funding options, offering either daily or weekly repayment terms. These simple loans are available from as little as $25,100 all the way up to $400,000, with repayment terms ranging from six months up to 18 months.
They are designed with established, secure small businesses in mind. Even though they are called working capital loans, the funds actually don’t have to be used as working capital at all, making them a good choice for many of your company’s capital needs.
If your business doesn’t have steady income or is prone to seasonal revenue fluctuations, however, you may have trouble getting approved for this product. Also, while working capital loans are flexible and fast, their factor rates might not be your lowest-cost option.
Qualifying for a Credibly Working Capital Loan
In order to qualify for a working capital loan through Credibly, your small business will need to meet certain criteria. Credibly requires that your small company:
- Be based in the United States
- Have been in business for at least six months
- Have a credit score of at least 500
There are requirements for your company’s bank account, too. These include receiving at least $15,000 in monthly deposits, holding a minimum average daily balance of $1,000+, and having no more than seven negative balance days in a month.
While meeting this criteria does not automatically mean you’re approved for funding through Credibly, they are the minimum requirements in order to move forward with a working capital loan application.
You should note that businesses with more than $250,000 in combined tax liens and/or judgements will not qualify for funding through Credibly, according to the current underwriting policies. Additionally, applicants with open bankruptcies, or more than two bankruptcy filings in the last 10 years, will be denied.
Credibly Business Expansion Loan
- Loans up to $400,000
- Term lengths of 18 or 24 months
- Rates between 9.99% and 36.00%
Your company has been around for a few years, and you’re officially a “seasoned” business owner. You have a proven track record of success and responsible business management, but are looking to fund something new, and you want a competitive interest rate in the process.
Enter the business expansion loan.
Business expansion loans are designed to provide longer-term funding solutions for established small businesses that have been around for at least three years. Loans are available from $50,000 to $400,000, with terms of either 18 or 24 months and automatic weekly payments.
With longer loan term and set interest rates, Credibly’s business expansion loan offers small businesses a path toward steady growth, without the arduous process of most bank loans.
With that said, this loan is not intended for newer businesses or those with revenue fluctuations. While terms are fixed with interest rates as low as 9.00%, rates this loan can be as high as 36.00% depending on creditworthiness. If you’re on the higher end of that spectrum, you’re better off shopping for more competitive loan products.
Qualifying for a Credibly Business Expansion Loan
Business expansion loans through Credibly are designed for established businesses. In order to be approved for funding, your company will need to meet certain requirements.
- Have been in business for at least three years
- Have a FICO credit score of 600+
- Receive average monthly deposits of $15,000 or more
- Have an average daily bank account balance of $3,000+
As with the working capital loan, your application will be denied if your business has an open bankruptcy filing or more than two filings in the last 10 years. You’ll also be automatically denied if your business has a combined tax lien/judgement balance of $250,000 or more.
Unlike with the working capital loan, however, there is a much stricter bank account requirement when applying for a business expansion loan. With this funding option, your business bank account cannot have any negative balance/NSF days (if you’ll remember, the working capital loan allowed for up to seven).
Credibly Merchant Cash Advance
- Loans between $5,000 and $400,000
- Term lengths of 3-18 months
- Factor rates as low as 1.15
The third funding option through Credibly is the merchant cash advance, which is designed for businesses with lower credit scores and/or fluctuating revenues. If you need funding fast, and for a variety of uses, this might be the best option for your company.
Merchant cash advances are short-term solutions for small businesses with fluctuating revenue. Advances are available from $5,000 to $400,000, with terms of 3-18 months and automatic daily payments that are calculated as a percentage of your revenue.
This repayment option ensures that you are working to pay down your debt without compromising the success of your business with a set payment that you may not always be able to make.
Qualifying for a Credibly Merchant Cash Advance
To be approved for a Credibly merchant cash advance, you’ll need to have:
- Been in business for 6+ months
- A FICO credit score of 500+
- Average monthly deposits of $15,000 or more
No personal guaranty is required for MCAs. If your business has an open bankruptcy filing, or more than two in the last 10 years, you’ll be auto-denied. You’ll also be denied if you have $250,000+ in combined tax liens/judgements.
Credibly’s Other Financing Solutions
- Lines of credit, invoice factoring, SBA programs, and equipment financing up to $5,000,000
- Term lengths up to 5 years
- FICOs as low as 500
- Factor rates as low as 1.15
Credibly also partners with other lenders in order to ensure the most comprehensive product coverage. With financing solutions for any need or lifecycle stage, Credibly can ensure that you are getting the most tailored financing plan for your specific needs.
Applying for Funding
Before you can be approved for funding through Credibly, you’ll be required to provide certain documents.
Regardless of the product you choose, you’ll need to submit:
- A signed and completed application for funding
- Your business’ most recent bank statements (past three months)
- A lease agreement or mortgage statement for your business, depending on whether you own or rent
- Government-issued photo IDs for all business owners (cannot be expired)
If your loan application is for $100,000+, you’ll also need to provide your business’ most recent tax return.
Credibly boasts a 24-hour approval process. Once their underwriters have had a chance to review your application and accompanying documentation, they will reach out with an answer or to request more information. Once approved, you can receive funds in your account as soon as the same business day.
You’ll pay a one-time fee of 2.5% for any of Credibly’s three product options, which is fairly common. This fee will be applied against the total loan amount at funding. For Credibly’s suite of external products, the specific lender’s fee will be applied.
Additionally, there is a $50 monthly admin fee for merchant cash advance accounts.
Interest Rates at Credibly
Only one of Credibly’s loan products is based on APR: the business expansion loan.
With the business expansion loan, you’ll be offered an interest rate ranging from 9.00% to 36.00%, depending on creditworthiness and other underwriting factors.
While 9.00% is a pretty competitive small business loan rate, 36.00% may not be the best you can find. If your goal is to pay as little interest as possible, it might be worth shopping around before committing to a high-interest business loan.
Conversely, if you are in need of capital fast in order to propel your business, Credibly offers quick funding that traditional small business loans typically cannot match.
The other two funding options — working capital loans and merchant cash advances — do not operate on interest rates. Instead, they are offered with what’s called factor rates.
Calculating your total loan cost based on the factor rate is fairly simple. Just take your total loan amount and multiply it by the factor rate to get your total out-of-pocket cost after the loan is repaid.
For example, if you take out a $250,000 working capital loan at a factor rate of 1.22, simply multiply 250,000 by 1.22. The answer (305,000) is your total cost of capital; in other words, you will pay $305,000 over the life of that loan.
Factor rates don’t just include interest. They also take into account origination fees and any other expenses that may be involved with your loan. So in the example above, you’ll be paying a total of $55,000 on top of your borrowed amount, which includes your 2.5% origination fee and interest charges.
Because factor rates are calculated against the original disbursement amount, they apply to your loan a bit differently than a traditional interest rate. The factor rate calculation is actually added to your loan balance at the very beginning of the term, rather than being calculated monthly or annually.
Even if you make additional principal payments on the loan, you won’t actually reduce the fees and interest paid. In fact, extra payments won’t save you any money at all -- you’ll simply pay down the debt faster.
Credibly: The Application Process
As with any small business loan, you’ll find the application process to be a bit more involved than, say, a personal loan. Even still, applying for funding through Credibly is pretty straightforward, and unlike many alternative lenders, their business consultants are available to guide you through the process. And with 24-hour approval and soft credit pull, it’s also quick and relatively risk-free.
Applying online takes only minutes. You’ll need to provide some very basic information, including your:
- Email and phone number
- Company name
- Business start date
- Requested funding amount
- Monthly sales volume
- Ownership percentage
Once you click Submit, Credibly will open a loan application for you. One of their representatives will contact you by phone to discuss funding options and gather more information. (This submission will not affect your credit in any way, either.)
At that time, you’ll be asked to provide additional documentation, to include your driver’s license, three months of bank statements, and a voided check.
If you want to get the ball rolling even faster, you can also apply online at this time without waiting for a representative to reach out. This involves filling out a form with additional information, and upload requested documents to speed the process up.
When a Credibly representative reaches out, you’ll learn about the funding options being offered to you. After investigating your business, they will let you know how much you can borrow, the products for which you qualify, and the terms of your potential funding.
Is Credibly Legit?
Founded in Michigan in 2010, Credibly is one of the younger small business lenders around. However, they have provided more than $1B in fast, reliable funding to small businesses around the country for the past decade… and they have the accolades to show for it, becoming the only company in its space to win servicing rights to a competitor's portfolio and complete an asset-backed securitization.
As of this writing, Credibly has an A+ rating with the Better Business Bureau and has been accredited since 2010. Not only that, but Credibly also has 4.7 stars out of 5 on Trustpilot, with an “Excellent” rating after 400+ consumer reviews. They also have a 4.9/5 rating on Lending Tree.
Credibly: The Pros
Thinking about applying for funding through Credibly? Here’s why this lender might be the right choice for your small business.
It’s pretty easy to qualify
No matter where your business stands, there is likely a Credibly product for you. Funding is available for businesses as young as six months and with credit scores of only 500.
24-hour approval process
Enjoy 24-hour approval when you apply for funding through Credibly.
Pre-approval is available in as little as 48 hours
Want to get prequalified for your loan? Submit an application and get a decision — on up to $400,000 in funding (or even $5 million) — in as little as 48 hours.
Funding is available same-day in some cases
Once approved, you may be able to receive funds in your account as early as the same business day.
Rates can be quite competitive for creditworthy borrowers
Interest rates on business expansion loans start at only 9.00% for qualified borrowers, making them quite competitive in the world of small business loans.
No collateral is required
Credibly does not require collateral for any of its funding products at this time.
Automatic daily or weekly deductions make repayment easy
Regardless of which product you choose, automatic drafts (either daily or weekly, depending on the loan type) make repayment easy and hands-free.
Credibly: The Cons
If you’re considering one of the three funding options from Credibly, there are a few things to keep in mind before you apply.
Products aren’t available in every state
Business expansion loans and working capital loans are unavailable in certain states (CO, DE, GA, MI, MO, NV, NJ, ND, OK, OR, SD, TX, VT). There, you’ll only be able to apply for merchant cash advances and some of their external financing solutions.
Businesses with open bankruptcies will be denied
No matter which product you’re considering, you’ll be automatically denied if your business has an open bankruptcy or one that hasn’t been discharged or dismissed for at least six months. Additionally, businesses with more than two bankruptcy filings in the last 10 years will be denied.
Factor rates are applied to two of the three products
While the business expansion loan is offered with an interest rate, both the working capital loan and merchant cash advance are offered with factor rates. This prevents borrowers from making additional principal payments to save money on interest.
Personal guaranty required
If you plan to take out a working capital or business expansion loan, you’ll be expected to sign a personal guaranty agreement. Even though the funding is for a small business, you’ll remain personally liable if your company cannot repay the loan.
Origination Fees are a Bit High
All three Credibly funding options will incur a 2.5% origination fee. While this isn’t the highest around, it is higher than some of Credibly’s closest competitors (for example, National Funding charges 2%).
While some lenders waive origination fees altogether, they are still pretty common. However, even a fraction of a percent can really add up if you’re taking out a large loan for your business.
The Bottom Line
Getting money for your growing small business can be tricky, especially if you need funding fast.
Whether your needs are short- or long-term, Credibly has a product to suit. They offer three funding options — business expansion loans, working capital loans, and merchant cash advances — all designed to offer you as much as $400,000 for your company.
Credibly works with small businesses as young as six months and with FICO credit scores of only 500. Approvals are offered in only 24 hours, with funding available as quickly as the same business day. This makes Credibly a great lender to consider if you cannot get approved (or don’t want to wait for) a traditional bank loan.
Interest rates on business expansion loans are as low as 9.00%, though they go as high as 36.00%. Factor rates on working capital loans and merchant cash advances start at only 1.15, and the origination fee on all three products is 2.5% of the total loan amount.
If you’re looking for flexible funding for your small business and multiple product options, Credibly is certainly worth the look. Especially if you need cash fast to expand, hire new employees, or even take advantage of a great opportunity. Credibly’s funding is much faster than a traditional loan, their application takes only minutes, and with one of the most comprehensive product suites in the industry they can help you assess nearly every option available to you.
With that said, it’s always smart to shop around. If you aren’t in a bind and don’t need the money tomorrow, compare your offer with those of traditional lenders and even your local banks. You might be able to save some money along the way.
To learn more about Credibly’s products or apply for small business funding, visit the Credibly website.
Frequently Asked Questions
Will pre-qualifying for a loan affect my credit?
In order to prequalify for a loan, Credibly will utilize a soft pull of your credit. This does not affect your score. However, if and when you decide to move forward with funding, they will also conduct a hard pull, which will be reported to the credit bureaus as an inquiry.
Is collateral necessary for Credibly loan products?
Some lenders will require a business to put up some form of security on their loan. Credibly does not require you to pledge collateral.
Will I be personally responsible for my Credibly business loan?
Though Credibly funding is intended for business purposes, a personal guaranty is required. This means that if your business has trouble repaying your loan, you agree to be held personally responsible for the debt.
How long does it take to receive the money?
The entire process of applying for funding, going through the underwriting process, and receiving funds can be done in as little as a business day, though the timeframe can vary based on individual factors. Credibly offers 24-hour approval on loan applications (assuming that additional information or documentation is not requested), and funds can be deposited as early as the same business day when you are approved.
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|Credit Score Required||500|
|Minimum Loan Amount||$5,000|
|Max Loan Amount||$400,000|
|Minimum Monthly Revenue||$15,000|
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