Top 7 Payroll Options for Small Businesses

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All businesses, whether large or small, must be able to effectively manage its payroll activities. If an employee is not paid on time or correctly, there could be serious legal consequences, not to mention the likelihood of increased staff turnover. Isn’t it about time that you make the effort to tame the chaotic payroll, benefits and human resource management processes? Of course, there is more to the payroll function than just ensuring employees are paid.

Some of the key payroll activities are:

  • Strict adherence to existing employment, wage, compensation and tax laws (withholding and payroll taxes).

  • Tracking and updating employee data, such as compensation, hours worked, vacation and sick time.

If your company cannot perform these activities accurately and on time, you certainly need to consider outsourcing some or even all of them.

It is interesting to note that over 30% of small businesses in the U.S. are fined annually by the IRS and other regulatory agencies for simple and avoidable payroll-related errors. It’s clear that small businesses need to find the ways and means to effectively manage their payroll-related activities in order to avoid paying these unnecessary fines; some of the more common fines include failure to account for proper tax withholdings, retirement deductions and other benefits. Moreover, almost all the businesses guilty of these transgressions have this in common—dependency on rigid payroll filing policies or else adopting the wrong payroll software solutions. That is the reason why it is important to choose a payroll system that is affordable and which meets your company’s needs. A good and effective payroll software will put your mind at ease and you will worry less about legal errors, clerical inconsistencies, or other tax-related mistakes.

That said, it’s not easy to choose the right payroll software, one which is not only affordable, but which has relevant features, is user-friendly, and offers exceptional customer service. Of course, if your business has only few staff members, a full payroll service provider will probably not be necessary. Instead, for a small monthly fee, you can use some of the services provided by a full service provider. To help you choose the right software for your company, we looked at the top 7 payroll options for small businesses.

Intuit Payroll Software

Some customers have described Intuit Payroll as the best payroll software available in the market, due to its outstanding QuickBooks and accounting features, and because it is extremely user-friendly. A positive reputation makes this software a good value for your money. It also offers different options, depending on the size of your company, and a 30-day free trial is usually available.

The first option is the Basic Subscription Plan. Under this plan the software feature calculates all your employee payroll taxes for $20 a month plus $2 per month per employee. Many consider this a reasonable cost, considering the spectrum of quality services. Intuit’s next option is the Advanced Subscription Plan, which has more enhanced features including tax filing services. Its subscription fee is $32 per month plus $2 per month per employee.

Intuit’s Premium Plan costs $79 per month. Under the Premium Plan, the payroll processing is fully automated and your payroll filling services is always on autopilot. With this plan, you have the ability to integrate data and information from other payroll services systems to your existing database systems. The plan also comes with high level of accuracy combined with features from other plans. Recently, certain HR-related features, such as complex employee compensation and compliance services were added. With that in mind, if you engage Intuit Payroll, you should expect the following:

  • Automatic tax calculation and filing, depending on your subscription plan.

  • Anti-tax penalty guarantee policy.

  • No fees on any direct deposit to your employees.

  • Unique and optional integration with your QuickBooks.

  • Mobile apps to run your payroll processes from your iPhone or Android.

Gusto Software

Gusto (formerly known as Zen payroll), is a cloud-based payroll solution designed to primarily serve small and medium-size businesses. It provides you with the necessary tools to effectively manage your core human resource needs. It is a fully equipped payroll, tax compliance and benefits administration management platform. It also offers products and services that will help you insure your business, payroll-related, and employees, in one easy-to-use integrated platform.

Gusto software provides expert guidance when you want to buy health insurance, integrate an existing insurance plan with your payroll, or if you need assistance with add-ons like life insurance, commuter benefits and 401(k) plans. The software is designed to automatically calculate and pay your payroll taxes, and ensure compliance with all federal, state and local agencies. It also has fully developed automation to deal with the W-2s and 1099s. Its differentiating features will reduce your HR burden as it will give you the power to easily manage your payroll protocols, employee benefits and other employee compensation processes. This means a fully integrated HR system within a single platform. This, therefore, leads to less paperwork for you, more convenience for your workers, and less time wasted.

Gusto also offers several Subscription Plans. Its Core Plan is the most basic service plan with the fewest features. It costs $39 a month with an additional $6 charge per month per employee. The plan comes with features that include a full service payroll system that allows for employee self-service, direct deposit payments, health benefits, and other employees’ compensation administration. The Gusto Complete Plan is also $39 a month, but there is an additional $12 fee per month per employee. In addition to the features it offers under the Core Plan, the Complete Plan offers employee onboarding resources, a complete paid time off administration system, as well as employee directories and surveys.

The Concierge Plan has all the features offered under the Gusto Complete Plan. However, it offers extra features for HR management and it provides you with HR experts who will assist you as the need arises. This plan is recommended for relatively large businesses at a cost of $149 per month, with an additional $12 per month per employee. It also offers other important HR resources such as HR handbooks, guides, and advanced training. Other overall features include:

  • College saving plans.

  • Workers insurance services.

  • Commuters’ compensation and benefits.

  • Health savings accounts.

OnPay Software

OnPay is an easy-to use yet affordable and comprehensive payroll software that offers scalable payroll solutions to relatively small and medium-size businesses. Just like most payroll software, OnPay software streamlines the payroll and payment processes and automates your tax filling. Key features of this software is the new hiring reporting, automated payroll taxation, employee self-onboarding, access to past pay stubs and tax forms. OnPay offers you an employee management feature that enables employees to better plan for their own retirement. The software also allows for easy integration with third-party software applications and systems.

OnPay offers a monthly subscription plan at a fee of $36 per month, with an additional $4 fee for each employee per month. The employees covered under the Subscription Plan can either be full time or part time workers. OnPay offers a free trial of their services for the first month of the plan which allows you to run your payroll processes for free and test the effectiveness, user-friendliness and affordability of the features before opting for a monthly subscription. In case the software features do not meet your needs, you are allowed to cancel the subscription at no cost.

While it may appear that the features offered by OnPay are somewhat basic, it is the software’s strength which is key, because of its ability to provide its core services effectively and in a user-friendly manner. It is also cost-effective, simply because of how it bundles and prices its service packages, taking into account the number of employees. Generally the software offers the following payroll and human resource management services:

  • Comprehensive payroll processes.

  • Payroll deductions; OnPay will calculate all the deductions, including percentage deductions, retirement contributions and insurance deductions.

  • Employee payment options, i.e., direct deposits, pay checks, and prepaid cards.

  • Tax deductions; OnPay software will accurately calculate your company payroll taxes and pay them on time.

  • Report new hires; as required by the government, OnPay will handle all reporting tasks as it relates to new hires, including name, Social Security number, ID numbers and their respective addresses.

Sage Software

Sage is a world-recognized company that provides enterprise resources planning software. Sage offers numerous financial management solutions designed to cater for your unique needs. For example, Sage Master Builder and Sage Timberline are well known accounting software in the construction industry; they offer construction-specific software features for activities such as equipment tracking, job costing and more. Other products of Sage are Accpac, ERP x3, MAS 90/200 and MIP Fund Accounting. Sage’s products not only provide support to manufacturing, service and distribution companies, but also offer specialized help to specific manufacturing industries.

Most of Sage’s software features are different from those offered by other software providers. Some have described it as “Intuit 2.0” with fewer features. The difference between Sage and Intuit is pricing and the number of employees; Sage charges a monthly fee of $49.95 and additional fee of $1.75 per month for each employee. If your business has less than 10 employees, the $49.95 plan with $1.75 for each employee will likely be your best option. In case your business outgrows that plan, or if your employees exceed 10, Sage will provide you with a customized plan to meet your needs. The customized plan and price will also depend on how often you intend to run your payroll processes.

Just like any other industry, every program or company must have its unique and differentiating features. Beside providing affordable prices to small businesses, Sage’s software has features that allow you to track employee time and attendance, and prepare payroll and taxes. More importantly, it allows you to submit employees’ payroll details via phone or fax. This standard plan will also offer you unlimited access to payroll consultancy from payroll experts—a likely reason why the company has the highest customer retention rate in the industry.

Namely Software

Namely is a unique software that provides you with a single comprehensive system for managing your payroll, human resources, tax compliance, and other benefits all under a single platform. Just like many other payroll platforms, Namely is a cloud-based software that enables small and big businesses to manage both simple and complex HR compliance needs. Basically, this software enables you to streamline and manage your payroll processes, benefits and employee management. Unfortunately, Namely does not disclose the prices of it services upfront; this information will be made available to you as and when you contact them. Below are some of the services you will receive if you opt for the Namely software:

  • Full service payroll process that allows you calculate and make deductions as soon as a new employee comes on board.

  • Tax Filing; once you sign up, the software will handle all of your local and federal taxes. That means less data entry for you and, consequently, fewer costly errors. It will also present your employees with a payroll deduction document to enable them understand how deductions were made.

  • Payroll reporting; this unique feature is unavailable in most payroll systems. It allows your HR department to view the workers information and how it is relates to the performance of the business. In addition to reviewing the number of hours worked and payroll deductions, it also analyzes the overall staff turnover.

  • Time management; Namely is designed to help you track the number of working hours in your organization so that you can better manage labor costs. As a result, you will have a 360° view of your workforce performance and costs.

Paycor Software

Paycor is a strategically designed integrated human capital platform that offers small and medium-size businesses payroll, human resources and extensive recruitment solutions. Its all-in-one HRIS system offers payroll and tax compliance, onboarding, recruiting, reporting and time-keeping that can be easily managed. The software offers solid features at affordable prices that can meet the needs of most small businesses. It also allows entrepreneurs to upgrade their subscription plan as they scale their business. Paycor does not have defined prices, thus potential new clients should reach out to them for a customized quote. Generally, though, small business will incur a $49 fee per payroll cycle with a $3 charge per employee. Employers have 24/7 access to Paycor customer service, though a company’s employees will be directed to contact the HR department directly if there is a problem or question. All in all, Paycor provides a good value for the cost when you consider the following services:

  • Automated payroll entry.

  • Tax compliance services.

  • Direct deposit to your employees.

  • Integration of 401(K) plans in their systems.

  • Human resource consultancy on demand.

  • Time and attendance management.

Xero Payroll Software

Like Gusto, Xero offers payroll software service solutions around the globe. Their services include automated payroll systems, tax filing and compliance, and other human resource management services. Xero offers a 2-month free trial period so that you can adequately assess their capabilities over more than one payroll period. If you are satisfied with the service after the trial period, the subscription plan bears a fee of $39 a month, with an additional $6 per month per employee. Besides its easy-to-use interface, the software allows multiple users’ connection from different locations. Its accounting features also eliminates the need for you to hire an accountant or bookkeeper. In general, you will receive the following services after signing up for the subscription plan:

  • Automated payroll service if your business operates within the 50 states.

  • Accurate federal and local tax fillings.

  • Free direct deposits.

  • Benefits and contribution management.


The aforementioned payroll software options can help your small business cut operational costs by reducing the number of employees required in HR, as well as the financial and accounting departments. Regardless of the size of your business, its location or industry, or the number of employees you have or plan to have, it’s a near certainty that one of these vendors will meet your payroll and HR needs.


Should I Use a Payroll Service for my Small Business?

Labor laws are regularly updated, tax requirements keep evolving, and employer contributions and employee benefits are ever-changing. All have a significant impact on payroll management, a challenging task to keep up with for any size business, and especially true if you are a small business owner without adequately trained staff to handle payroll-related needs. This can pose a huge problem for businesses which may wind up in the cross hairs of an IRS audit. In fact, annually, over 30% of all businesses are fined by some regulatory body for either filing the required information late or for incorrect payroll returns. These fines can cost businesses billions of dollars per calendar year, and that doesn’t begin to address the related costs, i.e. accounting, legal fees as well as other indirect damages such as credibility and reputation.

Fortunately, as the saying goes, for every problem, there is likely to be a solution and that is where payroll service providers fill the void. These providers promise to eliminate the difficulties and hassles that lead to mistakes, which eventually could result in fines and penalties. While payroll service providers are obviously helpful and economically viable for large companies, the daunting question remains: do small businesses really need a payroll service? Before we answer that, let’s first analyze the potential benefits and probable challenges before deciding whether or not to seek the assistance of a payroll service provider.

Factors to Consider

Payroll Service Provider Qualifications and Experience

Today, there are hundreds of internet-based companies which claim to offer payroll services. As expected, the majority do not offer quality services or else they have questionable integrity issues. To start, research the providers’ experience, find out how long they have been in the payroll services business, and then check the user reviews they have received thus far. It is advisable to choose a provider who has been around for at least three years because stability and quality is important in selecting a provider. While this background check process may cost a significant amount of resources for a small enterprise, it is worth having a reputable payroll provider that you are confident will be around in the future.

Costs of the Payroll Services Provided

As a small business, you want value for every dollar spent. This means you should select a provider that is capable of offering an improved service at an affordable price. To get this economic value, you must first evaluate the entire cost (and ensure there are no hidden costs) and the quality of the package, and then compare it to that of other service providers. Do not make the mistake of analyzing everything in terms of only cost, as some may appear a real bargain on paper, but the actuality is they offer a poor service. In other words, have a comprehensive price comparison list and select a suitable provider for your business. Remember the old adage—you get what you pay for.

How do you select a suitable provider for your business? Identify your company’s needs and look for a service provider that can meet your requirements at an affordable cost, with no hidden charges. Avoid any company that doesn’t offer a direct and conclusive price structure as they are more likely to surprise you with hidden fees. Other than that, expect prices to vary depending on the package you choose and the number of employees on your payroll. You should also be able to upgrade or downgrade the package as and when your business needs changes.

Options and Features

As a small business, you probably do not need a premium package. It is always advisable to start at the lowest subscription level and upgrade to a higher one later, depending on your experience and business needs. In most cases, small enterprises just need a provider that assures them of basic and accurate payroll accounting services. Regardless of the level, however, the following are critical features that should be a part of any package:

  • Automatic tax calculation and filing.
  • Affordable fees on direct deposits to workers accounts.
  • Accounting capabilities for insurances and other employee related benefits.
  • Swift integration with regulatory agencies.

Customer Service and Support

A provider with a top-notch customer service team is always integral to having a successful payroll system. You will always want to have prompt support from a customer service provider which has sound knowledge and experience resolving payroll challenges and problems That is why it is critical to check the provider reviews and customer service ratings. Beyond that, check their guidelines, such as payroll set up and integration support. Ensure that they provide 24/7 support which should not be limited to only one communication channel, but multiple avenues such as phone, email or online chat. This will give you a clear idea about their customer support capabilities, i.e. seriousness, attitudes, and policies.


We live in an age where data security has become a hot-button issue, as well it should be. Employers and employees alike won’t wish to have their tax and personal information exposed, for any reason, whether it is human error or fraud. Your payroll services provider should be equally as concerned, as the costs for a data breach can be significantly greater than just monetarily. So, research and choose a reputable provider capable of protecting the integrity of your data. You could also ask for recommendations from the providers’ past and present clients so as to avoid untrustworthy service providers that may expose or exploit employees’ information to fraudulent activities.

User Experience

Complex and rigid systems are always challenging to use. Look for a provider that offers simple and easy to use software that allow employees to log in and access information. To ensure this is the case, seek out a service provider that will offer a free trial so that you can test the user experience of a system and choose a suitable package that meets your staff’s abilities and experience. This way, you save time and resources that may have been used in the learning curve.


A small business with financial limitations should always buy a system which offers flexible choices in relation to data storage, report and file printing. It is important to check for a provider that will allow for the flexible and easy integration with your other features, such as time and attendance software systems. This way, you will eliminate duplication and payroll errors, and decrease unnecessary labor costs. It would also allow a company to assess and improve their performance metrics.

Reasons to Use a Payroll Service Provider

Depending on your business needs, there are several reasons your company may choose to engage the services of a of payroll services provider; those reasons could include:

Enhanced Accuracy – The two primary reasons to engage a payroll services provider is first, to ensure that your employees are paid exactly what they are due, and on a timely basis, and second, that your company submits timely and accurate payroll information to the IRS and other regulatory agencies. Both tasks can be challenging, thus raising the need for a payroll services provider which will guarantee accuracy.

Compliance Services – Regulatory guidelines are not limited only to tax laws; there are also multiple employee registration, privacy issues and security regulations to consider. Most payroll service systems now offer access to the legal expertise needed, as part and parcel of their payroll package. They ensure that your business’ payroll activities don’t unintentionally expose the employee’s data, in relation to the legal framework set. This feature can save a small enterprise a significant amount of time and resources and, at the same time, ensure legal compliance with complex payroll and tax regulations.

Lower Payroll Costs – An alternative to hiring a payroll service provider would be to hire, in-house, someone who can capably handle all of the payroll-related tasks. The costs of salary, and related benefits, for that person (or persons, depending on the number of staff) plus consideration for a replacement when that person is ill or on vacation, can mount up considerably. A comparison of the costs for the engagement of a payroll services provider versus the annual costs of an in-house employee can and likely will show quite a disparity.

Productivity and convenience

Engaging a payroll services provider can allow your HR staff, which might otherwise be tasked with payroll-related duties, to concentrate on those other activities which would improve the human resource performance and productivity in your business. As regards convenience, most payroll service providers will allow managers to update their employees’ wages and benefits information, as well as other pertinent data, online, from any location, and at their convenience.

Access to other services

Some providers will offer payroll service packages bundled with other related services such as contract generation and contractor services. Others might come with robust human resource management systems that, if needed, would present a significant cost savings as opposed to buying them separately.

Downside to Engaging a Payroll Services Provider

We would be remiss if we didn’t mention that there are some downsides to using a payroll services provider; some of those downsides include:

Loss of control – Though the minutia of the responsibilities would be controlled by the payroll services provider that you have engaged, most online platforms can still accord you some control as you can input some of employees’ particulars, as and when needed.

Accuracy concerns – A reputable payroll services provider will stand behind their work and guarantee accuracy, but understand that calculation errors or mistakes in filing requirements can and do happen. The ability to log into the payroll system to review or sign off on transactions and to input employee data changes, as needed, can go a long way to ensuring accuracy.

Data security breaches – Ensure the provider you ultimately choose has stringent controls in place to minimize any potential breaches of security.

Unnecessary or hidden costs – While the bundled packages may seem like a great bargain, they really only are if you absolutely need them. Don’t pay for something you don’t or won’t need. Instead, choose customizable services that suit your business needs and capabilities at an affordable cost.

Final Thoughts

We are in a technological revolution where modern human resource systems and services are built on the principles of efficiency and quality. However, these developments may come at a price too dear for most small businesses or startups. Once again, this begs the question: Do small businesses really need payroll services? The simple answer is “yes,” as it is more accurate, as well as cost and time effective than traditional payroll management. However, you must be aware of your business’ needs, the number of employees, and your company’s financial capabilities even before you think about outsourcing payroll activities. You also have a snapshot of possible problems you may encounter if you choose to engage these services. The downside, however, does not take away the real results and positive benefits that other small businesses have enjoyed from a quality payroll service provider.


6 Factors That Keep You From Getting a Small Business Loan

According to the National Small Business Association (NSBA), 99.7% of all employer firms in the United States are made up of small companies. The 2017 Year-End Economic Report released by the NSBA shows that 73% of small businesses were able to obtain adequate financing. However, that also means more than one-quarter had a problem getting the funding they needed.

Of those that had inadequate financing, around one-third of the small firms reported being unable to grow or expand their operations. Other negative effects experienced by such companies included being unable to finance increased sales or additional inventory needed to meet demand, as well as having to make the difficult decision to reduce the number of their employees or reduce their benefits.

For many small businesses, business loans are an essential financing tool to maintain or expand their operations. The money can be used to take care of different kinds of business expenses, such as payroll, rent, and inventory. Unfortunately, not all interested business owners qualify for small business loans. Why is that? Below, we look at 6 factors that keep entrepreneurs from getting a small business loan.

1. Poor or inadequate credit history

When you apply for a business loan, many lenders look at your credit history, and even though you are borrowing money for business use, lenders will look not just at your business credit score, but at your personal credit score as well to determine how creditworthy you are. If your credit history shows that you are not diligent when it comes to paying back debts, your application might get declined.

Having credit issues does not mean a person is irresponsible; many people have a poor credit history because of things that are beyond their control, such as illness or divorce. Nevertheless, having a credit score below 700 can be a roadblock when it comes to getting small business loans. Once your score rises above 720, however, your chances of being approved for a loan and getting a good interest rate also rise dramatically.

If you’re one of the entrepreneurs having a hard time qualifying for loans due to your spotty credit history, rest assured that this barrier is not permanent.

To have a better idea of how lenders see you, get copies of your business and personal credit reports. Different credit reporting companies sometimes have different data, and different lenders look at different reports, so get a copy from all the major reporting agencies to cover all your bases.

Each year, you can request a free copy of your personal credit report from each of the three major reporting agencies (Experian, Equifax, and TransUnion). For your business credit report, meanwhile, you can get a copy from Experian, Dun & Bradstreet, and Equifax.

If you have been attentive to all your financial obligations but still have a low credit score, the problem might just be due to a minor clerical error, so check the reports meticulously to see if there are any inaccuracies. If you find an error, send the company a letter requesting for the error to be corrected.

Meanwhile, if there really were lapses in your efforts to pay bills and debts in the past, you can improve your credit score over time by paying off your existing debts, paying bills on time, and resolving tax liens and late payments.

On the other hand, if your problem is not so much poor credit, but lack of credit, you can build up your business credit by asking your creditors and suppliers to report your payment history to the major reporting agencies. You can also try asking your establishment’s landlord or getting small loans first then paying them off on time.

If you need a sizable business loan right away and cannot wait for your credit score to improve, you can get funding from alternative lenders that do not care much about the borrowers’ credit scores, preferably while you work to repair your credit profile.

2. Insufficient cash flow

Cash flow — how much money you have left over each month, after paying all expenses — is another major factor when it comes to small business loans. Lenders will look at your cash flow to gauge the health of your company and the likelihood that you will be able to pay them back in full and on time. Limited cash flow can therefore keep you from getting the loan that you need.

Lenders use the debt service coverage ratio (DSCR) to determine how much a loan applicant can afford to borrow. To calculate your DSCR, divide your monthly free cash flow by the monthly loan payment. So, for example, if you have $10,000 in free cash flow and your monthly payment is $7,500, then your DSCR is 1.33.

A DSCR of 1 means your cash flow is equal to the monthly loan payment; a ratio below 1 indicates that your debt is greater than your cash flow and that your loan application will be denied.

While some lenders consider a ratio of 1 as acceptable, most require at least 1.25 and prefer a score above 1.5.

Knowing your ratio enables you to determine if you need to boost the financial standing of your business first before approaching lenders. If so, you can look for ways to increase revenues and reduce expenses. By knowing your ratio, you can also figure out how much to borrow to increase the odds of getting approved.

If you’re not sure of your business’s current financial position, you can consult a financial planner for help.

3. Not having a solid plan for your business

Many small businesses only have an informal business plan and some don’t even have any plan at all.

Unfortunately, not having a solid business plan can get in the way of securing a business loan. Lenders want to do business with entrepreneurs who have definite plans, not those who only have half-baked ones.

If you still have not made a comprehensive plan for your business, start now — before submitting any loan applications. Spend the time and effort needed to come up with a carefully considered document discussing your company, your market, and the products or services you provide, as well as the financial information and projections. If you need help, you can ask a business plan expert to evaluate if your plan would be appealing enough to lenders.

It also pays to be clear about the kind of loan you want, how much you want to borrow, and how you intend to use the money. Being specific about these things can help persuade the lenders that you will use the funds wisely and that you have a concrete idea on how to grow your company using the money that you will receive.

So instead of just borrowing $200,000 to use as working capital, you can break it down and say you need $50,000 to buy additional furniture, $80,000 for inventory, $20,000 for marketing, and $50,000 to hire additional workers.

4. Being disorganized with your records and documents

Being sloppy and disorganized in your bookkeeping can make things difficult when it’s time to apply for a small business loan, so avoid practices such as inconsistent filing of tax returns and mixing business and personal bills.

If you find keeping organized financial records yourself challenging, consider hiring a professional bookkeeper or accountant, or purchasing business finance software. In any case, maintaining good records will help you not just during tax time or when you need a loan, but will enable you to always have an accurate view of your company’s financial health.

When it comes to business loans, make sure you have all the needed paperwork ready before sending in your loan application. Not submitting all requirements can prolong the processing time of your application and can even get your application rejected.

Some of the documents typically required by lenders include:

  • business plan
  • collateral
  • balance sheets
  • profits and loss statements
  • income tax returns
  • personal and business bank statements
  • loan history
  • accounts payable and receivable
  • legal papers, such as business licenses and registrations

Another thing that can get your application declined are careless mistakes, such as missing information or conflicting entries. Therefore, make sure to fill out the application correctly and completely, and review everything carefully before submitting.

5. Lack of collateral

Some lenders — especially traditional ones such as banks and credit unions — evaluate a loan applicant’s ability to repay by requiring two sources of repayment: the company’s cash flow and a secondary source, which is usually collateral.

These lenders want collateral to back the loan, even if the borrower has a good debt service ratio and a high credit score.

Collateral makes the lenders comfortable because they know that if needed, they can sell the collateral to get their money back. Having an asset on the line also encourages borrowers to pay back the loans. In addition, an entrepreneur willing to back his loan with assets also tells lenders that the entrepreneur has enough faith in his skills and his business to risk losing an important property.

And not only do lenders want collateral, they want the right type of collateral. It has to be easy to value and also easy for the lender to sell in case the borrower fails to make payments.

The collateral can be in the form of business or personal assets, such as a real estate property or bank deposits. For some kinds of loans, the equipment and other assets you will purchase with the borrowed funds will also act as collateral.

Aside from collateral, many lenders also require business owners to sign a personal guarantee. This guarantee states that if ever the business fails to pay back the loan, then the borrower is personally liable. This is the reason why lenders place a high value not just on business credit score, but personal credit score as well.

6. The nature and age of your business

Lenders consider some types of businesses as riskier than others, so the nature of your company can affect your odds of getting a small business loan. If your application does get approved, you may get a higher interest rate because of the perceived risk.

How long your company has been in business also affects your chances of getting a loan and the interest rate you get. Banks and other conventional lenders are unlikely to lend money to businesses that are less than two years old.

Having a business that has been operating for less than two years does not mean you’re completely out of luck, though. Nowadays, there are many alternative lenders willing to lend money to businesses that have been around for only several months. The loan amount depends on the company’s monthly revenue.

Keep in mind, though, that businesses that are not yet considered established will get a higher interest rate, so avoid borrowing money in your first two years of doing business, if possible. If you really need a loan, make sure that the higher monthly payments won’t throttle your cash flow to the point of negatively affecting your business operations.

Bottom Line

Getting a small business loan can be a daunting task, especially if you’re borrowing from banks and other traditional lenders. Factors such as poor credit, limited cash flow, lack of a solid plan or collateral, disorganized business habits, and being a new business can keep you from qualifying for business loans.

The best time to prepare to borrow money is when you don’t need it yet, so you can determine and address any potential issues that will prevent you from being approved. If you start preparing early enough, you might be able to raise your credit score, improve an anemic cash flow, craft a detailed business plan, and assemble all the needed paperwork.

If one or more of the 6 factors listed above are keeping you from getting a traditional small business loan, know that you still have other options to get the funding you need. You can borrow from online lenders, peer-to-peer lending sites or merchant cash advance firms. These funding sources typically have fewer requirements and faster processing time.


Liberty SBF Review

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Liberty SBF was established in 2011 and is headquartered in Philadelphia, PA, with satellite offices in Detroit, and Los Angeles. This relative upstart is a multi-pronged commercial real estate lender which prides itself on being able to address the needs and challenges that face small businesses in what is considered a challenging credit environment. Despite their relative newness to the non-bank lending industry, they are able to provide several different types of commercial loans for small businesses which they feel can meet most needs. Those loans types include traditional SBA loans (in particular 504 loans), as well as conventional term loans and bridge loans. Regardless of the small business’ credit need, simple or complex, they have the staff and wherewithal to handle most types of transactions, including debt refinancing, partner buyouts and quick-close acquisitions.

For property acquisitions, as a small balance commercial lender, Liberty SBF is able to provide low-cost financing, at a fixed interest rate, for borrowers nationwide. They can assist with acquisition financing or refinancing of owner-occupied properties intended for self-storage, office, medical, industrial, hotels, multi-use or special use properties. Generally, the commercial real estate loans must be for a minimum of $1,000,000 and a maximum of $15,000,000; the Loan-to-Value or LTV rate is 90%. Liberty SBF has a syndicate of approved banks, SBA loan intermediaries and other non-bank lenders with which it partners in order to originate SBA 504 loans.

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  • Can provide financing for up to 90% of the property value for the SBA 504 loan
  • Offers small balance commercial financing of owner-occupied properties often not well served by the traditional commercial real estate lending market
  • Interest rates and fees, though variable and dependent upon the situation, are relatively transparent on the company website
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  • Funding, especially for SBA loans, may take longer than 30 days (in some cases up to 90 days)
  • The Debt Service Coverage Ratio (or DSCR) must be a minimum of 1.20
  • Property to be financed must be owner-occupied (51% or more)

Liberty SBF offers three types of loans to small businesses; namely, conventional term loans, SBA (504) loans and bridge financing. They specialize in the niche market of small balance commercial real estate loans which have traditionally been under-served. Small balance commercial loans are essentially acquisition loans in an amount too low to even be considered by the more traditional commercial bank lenders. The underwriting criteria for these types of loans tends to be less stringent than large balance loans, thus the approval rate is often better.


Services Offered & Types of Funding

Conventional Term Loans

Types of Loans Details
Loan Purpose: Acquisition and/or refinance of properties that are owner-occupied (at 51% minimum) for multi- and special-use purposes as well as the hospitality industry.
Restrictions: Properties must be located within a Metropolitan Statistical Area (orMSA) within the United States and its territories which show strong economic signs and meet specific fundamentals for the property type
Amount of Loan: From $750,000 to $7.5 million
Loan Terms: Up to 10 years
Amortization: Up to 30 years
Recourse: Full recourse

Bridge Loan

Types of Loans Details
Loan Purpose: Acquisition and/or refinance of properties that are owner-occupied (at 51% minimum) for multi- and special-use purposes as well as the hospitality industry.
Restrictions: Properties must be located within a Metropolitan Statistical Area (or MSA) within the United States and its territories which show strong economic signs and meet specific fundamentals for the property type.
Amount of Loan: From $1 million up to $14 million
Loan Terms: Up to 25 years
Amortization: Up to 25 years
Recourse: Full recourse
LTV Rate: Up to 90% of the appraised value

SBA Loan

Types of Loans Details
Loan Purpose: Bridge financing for debt refinancing and/or restructure, DPO financing,quick-close acquisitions, or partner buyouts.
Property types: Manufactured housing, multi-family housing, office, hotel, or retail properties
Eligible Locations: Up to 12 months of interest only payments
Amount of Loan: From $1 million (maximum is unknown)
Loan Terms: Up to 12 months of interest only payments
Recourse: Non-recourse
LTV Rate:
Up to 70% of the appraised value of the property, or 75% of the appraised value for a multi-family property.

Liberty SBF Review


Rates and Fees


Liberty SBF loan rates are comparable to other lenders which also provide conventional and SBA 504 loans. Where they will differ is in the “packaging fees” they charge. From the Liberty SBF website, the following fees may be assessed on the conventional and SBA 504 loans:

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  • Processing Fee :    $1,500
  • Deposit for Expenses :   $15,000
  • Prepayment Penalty :  Assessed if loan is repaid within the first five years (amount unknown)
  • The bridge loan does not have any disclosed fees per se but Liberty SBF does set the rate for a bridge loan at LIBOR + 6.99%.

Borrower Qualifications


Liberty SBF Bank says that they finance their loans directly from their balance sheet, thus their philosophy regarding credit is based on strict underwriting standards. However, they also recognize that each borrower is unique and are willing to work with a small business owner to explore creative solutions.

In general, Liberty SBF requires that the borrower have had a minimum of two years profitable operations in their small business venture. A credit score of at least 620 is also required of the owner or principal of the company. The “sponsor,” as Liberty SBF calls the company principal, is also expected to be a creditworthy individual who has “sufficient liquidity and net worth” though that is not well defined. Last but not least, for SBA 504 loans, the company’s financial statements should provide evidence that they have sufficient resources to retire the debt, with the Debt Service Coverage Ratio set at a minimum of 1.20x (and 1.30x for conventional loans).

As regards collateral, Liberty SBF will require a clean title to the property being acquired or refinanced; no other collateral will be required. It is not clear if a Guaranty will be required of the company’s principals.

Application Process


There is very little information regarding the application process on the Liberty SBF website; prospective borrowers are encouraged to contact a lending officer to assist with the process. To that end, they can be contacted directly via their website by completing and submitting the online form. One can also reach them via email or by phone, and they have a social media presence on Linkedin as well as Facebook.

Help & Support


Liberty SBF services and acts as asset manager for all of the loans that it originates and which are held in their portfolio. There is very little information on the Liberty SBF website as to the their support and help in the process of obtaining a small business loan from them.

User Reviews


There is little “noise” about this non-traditional lender online outside of a single reputable source which reviewed their services (and praised them as an exceptional lender in the 504 space) and Liberty SBF’s own website.


Final Thoughts


Liberty SBF caters to a market that has been traditionally under-served by large traditional commercial banks and lenders. They work with a niche market comprised primarily of small business owners who want to acquire, refinance or obtain a bridge loan for commercial property which, due to their small amount (i.e. less than $15 million) essentially flies under the radar of the large traditional lenders.

While the website itself may be lacking, it’s refreshing to see that they are upfront about their offerings in terms of loan amounts, rates, length of term, fees, etc. Obviously, every client will have a different outcome, largely based on the company’s and principal’s creditworthiness, but to give Liberty SBF credit where it’s due, they seem willing to make an effort to provide creative financing as and where needed.

This is clearly a company that doesn’t believe in the “hard sell” as is evidenced by their website. A simple contact form and page is what it takes to begin the process. That is not necessarily a bad thing, however, especially if one has been aggressively chased by others in the lending space when it is only information being sought.

There is nothing online about Liberty SBF which sparks any kind of suspicion or doubt to this reviewer. If your credit needs have been largely ignored by the big lenders because your loan request isn’t worth their consideration, Liberty SBF would be well worth a call.


Torro Review

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Torro is a business loan provider that is dedicated to solving cash flow and working capital needs for small businesses and entrepreneurs. Founded in 2012, Torro has grown to specialize in small business, new business, and even startup loans, catering to the needs of individuals hoping to jumpstart and expand their businesses. Torro specializes in connecting small business owners with their network of private investors, independent brokerages, and lenders. The company prides itself on granting fast approvals for all types of business loans (with funding approval given in as little as one hour), as well as reliable service. In addition to loans, Torro also offers consultations for small businesses and startups.

With one click and a few form fields between you and a list of potential lenders, the application process is simple. Once your application has been submitted, they search a wide network of providers to find funding for your business needs. Torro’s loan matching process makes it easy to find the funding your company needs. Approval is fast, and funding is usually received within 48 hours. In over 6 years of business, Torro has served as a reliable small business lending platform and became a Better Business Bureau accredited business on October 23rd, 2015.

Torro Review

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  • Easy online application
  • Offers bad credit business loans
  • No collateral required
  • Fast approval and funding
  • Funding for startups and high-risk
  • Available in all 50 states
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  • Young company
  • Limited information on the website
  • Limited support

Services Offered & Types of Funding

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  • Type of funding – Line of credit / Merchant Cash Advance
  • Age of business / Minimum time in business – Funding for Startups and Existing Businesses
  • Loan amount – $5,000 – $575,000
  • Minimum credit score – None
  • Time until funding – as little as 24 hours
  • Repayment terms – 12-48 months


With hundreds of funding solution options available not every business qualifies for each solution. Generally, most businesses only qualify for 1-3 funding programs and Torro has narrowed all funding options down to 2 easy categories.

New Businesses and Startup Loans

Of all the things starting a business demands, finding funding is certainly at the top of the list. There are dozens of types of loans and lenders in the market, and each will claim that they’re the best for you. With a quick 3-step process Torro can assist you and your startup in obtaining $25,000-$125,000 in unsecured working capital. This is ideal for entrepreneurs seeking startup funds and the approval is determined off the business owner, partners and investors personal credit.

Small Business Loans for Existing Businesses

Small-business loans are typically issued only for businesses with a year or more of history and revenue. Among the financing options for entrepreneurs who qualify for this type of loan Torro can setup merchant cash advances and lines of credit.

If you’re worried about whether you can get a business loan with bad credit, you should know that not all hope is lost. Torro provide loans to people with a poor business or personal credit score. Just keep in mind that your interest rate and other fees will go up depending on that company’s confidence in your credit.

Merchant Cash Advance

Merchant cash advance is one option for small business financing – if you have a business with outstanding invoices. With a merchant cash advance, you obtain funds by ‘selling’ your future credit and debit card receipts to Torro. Torro advances you a cash lump sum for these receipts and determines the amount you must pay back over time. In this case, Torro arranges with the credit/debit card companies to receive a fixed percentage of your daily receipts to pay back this amount. The actual time it takes to pay off your advance will depend upon the volume of credit/debit card proceeds coming in.

At Torro, they don’t restrict how you use your merchant funding. While your business may benefit from financing for new equipment, another business may need it for payroll. Torro provides the merchant funding, and you choose how to utilize it. You can utilize your merchant cash advance to fill inventory orders, upgrade equipment, expand your business, have cash for payroll, pay for marketing developments, invest in new technologies, recruit new employees and even start a renovation project.

Getting a merchant cash advance with Torro is fast and easy compared to traditional bank loans. To apply, just complete a few simple questions online or over the phone. Tell Torro about your business and your needs privately and confidentially. No collateral is required, and you can receive an approval, in most cases, on the same day!

You can get a Torro merchant cash advance for amounts ranging from $5000 to $750,000, and you can use it for all your financing needs.

Lines of Credit

Torro is a leading online lender that offers a variety of small business loan and line of credit options. You can apply for a business line of credit with Torro in less than 10 minutes.

Every small business experience cash flow challenges. Since cash flow fluctuations are a natural part of doing business, rather than trying to avoid them, an alternative approach would be to actively manage your cash flow by using a line of credit.

A line of credit is a given amount of money you can borrow when you need it and repay back when you don’t. It is different from a loan because you don’t have to use it, but you can use it as a buffer or a fallback option if you have unexpected cash flow issues brought about by late paying clients, unplanned for expenses, or simply by seasonal cycles. Line of credit funds may be borrowed, repaid, and borrowed again and can also be a great way to start building or bolstering your business credit score. Interest rates for line of credit tend to be a little bit lower as as well. Otherwise, the qualification process for Lines of Credit and MCA’s are the same.

Borrower Qualifications


Torro doesn’t have a concrete list of basic requirements. The application process itself is composed of a short questionnaire that only takes a few minutes to complete. Each loan type has its own guidelines for qualification, and individual lenders often consider additional factors.

An existing business looking to qualify must:
  • Be in good standing
  • Have a valid tax ID number
  • Have a valid business address and phone number
  • Have a valid and verifiable U.S. bank account
  • 3 to 36 months of personal bank statements may be required
  • Must not reflect more than 6 credit inquiries within past 90 days
  • Provide a verifiable business or personal credit history and may need to provide proof of properly files tax returns for past 2 to 5 years.
  • May need to submit your previous four paycheck stubs. In order to qualify for a startup loan, you must: Be a legally-filed business entity in good standing
  • Present a business plan and a statement of how funds will be used
  • Provide personal tax returns for the previous two years or three to 36 months of personal bank statements
  • Provide proof of income
  • present past business references (landlords, employees, etc.)

In either case, collateral may be required if credit minimums are not met. Some lenders may ask for other documentation or proof of assets depending on the loan type for which you apply. A minimum credit score of 650 is required in certain cases, by certain lenders, which might be prohibitive for some startups or businesses with less than ideal credit, but other financial information may be accepted as an alternative.

Rates and Fees


Besides the interest rate charged for each loan, LoanMe has also has an origination fee, which is not uncommon for online lenders. That fee varies from as little as 5% to as much as 10% for most of the loans it offers. Regardless, there is a minimum origination fee of $500 for any loan from LoanMe. For prime loan packages for California borrowers, the origination fee is a flat 15% of the loan amount. That fee is deducted from the loan proceeds, so the amount disbursed to you will be the loan amount minus the origination fee costs. LoanMe does not charge a fee for early payment of the loan, whether in part or in full. As is typical of the industry, a late fee will be assessed if payments are late by a specific number of days as stated in the contract. LoanMe encourages its borrowers to reach out to them early on in the process if they know there will be a problem with a future payment

Application Process


Torro offers a quick application process that can see customers getting funded within 2 days. This is pretty much standard among online, alternative lenders. To apply for funding from Torro, click the “Claim Your Funding Now” button on any page of the site, choose the desired loan type, and enter some basic information:

  • Business name and industry
  • First and last name
  • Email address
  • Business and mobile phone ZIP code
  • Length of time in business
  • Average monthly income
  • Monthly credit card sales volume if applicable
  • Credit score
  • Whether

After Torro receives the information they need to match your file to the best funding program available, underwriting generally happens on the same day. Within just a few short hours you will have an offer on your file and Torro will connect you with a financial product that’s right for you. Once approved you will be able to access the capital in as little as 24 hours!

Torro uses TrustGuard along with SSL technology and PCI scanning to encrypt all customer information before transmission. Confidentiality is required from all their employees and third-party lending affiliates with whom your information must be shared over the course of the funding process. Complete security and privacy details are laid out in Torro’s privacy policy.

Torro Reviews

Help & Support


Torro business funding is not a bank but an alternative solution focused on solving cash flow and working capital needs for small businesses. By engaging with torro you can be assured that your team of funding specialist working your account will narrow down the right funding solution for your business.
If you have questions about any part of the application or lending process, help is available via phone Monday through Friday from 8 am to 5 pm PST. Customers can also get in touch with Torro by live chat or email. Live chat on their website site can provide immediate help when you’re in need of quick answers before applying or while you’re filling out an application. If a staff member is not available by live chat, you can leave a message so that they can contact you later.
However, the site lacks a lot of detailed information provided by similar lenders. For instance, you won’t find a blog or an FAQ page. Still, their well-trained experienced team of advisors will help you and assist you throughout the entire process so perhaps those pages aren’t entirely necessary.

User Reviews


Compared to other lending platforms that tend to reflect an excessive volume of complaints, the majority of the feedback we found relating to Torro was positive.

Torro have 185 reviews on the website Trustpilot, with 91% of them giving Torro an “excellent” 5-star rating. Of the 5-star reviews, the claim was primarily due to ease of applying, smooth fast turn around and no hastle. Consumers write that the team explained almost everything they needed to know and they were able to get the business funded quickly. We further analyzed the 5 (out of 185) bad (one star) Torro reviews and it seems that the main concern is related to the high cost of the loan and that funding was quite expensive, but this shouldn’t come as a surprise to the loan taker.

Final Thoughts


As with many online loan matching services, Torro’s application process is simple. Torro asks for only a few pieces of personal and business information, and applications may be approved in under an hour.

The company may prove to be an exceptionally good option for those seeking loan services for startups and new businesses. Operating as one of the best small business lending networks, Torro offers some of the lowest APRs when compared to other online lending platforms and offers superior customer service. if you are having a difficult time acquiring a small business loan, then we encourage you to check out Torro for your business needs.


IOU Financial Review

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IOU Financial is a short-term loan provider catering to successful small businesses with a healthy cash flow. With its headquarters in Montreal, Canada, and a North American operations center in Atlanta, Georgia, IOU Financial has funded over $600 million in loans since 2009. It operates as a 100% paperless company (which won’t affect your loan application, but is just plain awesome). Loans up to $300k are available for clients with a credit score of 600 or higher. As with other short-term lenders, eligibility requirements are pretty lenient, while rates are relatively high. Therefore, check if you qualify for other small business loans with lower rates before deciding on a short-term loan with a company like IOU Financial. Bear in mind that making high daily repayments can be a big strain on your small business.

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  • No hidden fees and terms, very transparent compared to other lenders
  • No prepayment penalties
  • Easy application process with quick pre-approval online or via phone
  • Possibility to renew your loan once you are 40% paid down if you need more than the maximum loan amount of $300,000
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  • Relatively high origination and other fees
  • Daily/weekly repayments can be difficult to handle for small businesses with irregular cash flow
  • Funding usually takes longer than the promised 24-48 hours

Services Offered & Types of Funding

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    Loans up to $300k are available for clients with a credit score of 600 or highe

  • Type of funding short-term loans
  • Minimum time in business 1 year
  • Loan amount $5,000 – $300,000
  • Age of business 1+ year
  • Minimum credit score 600
  • Time until funding 24-48 hours
  • Repayment terms 6-18 months

IOU Financial offers short-term loans with repayment terms from 6-18 months. The company divides their products into two sections. The first one is their so-called core product, which are term loans between $5,000-$150,000 with repayment terms that can be 6, 9, or 12 months, and fixed daily payments. The second one is their mid market product, which are loans between $70,000-$300,000, with repayment terms of 12, 15 or 18 months. With this type of loan you can potentially qualify for weekly instead of daily payments.

If somewhere down the line you realize the maximum loan amount of $300,000 is not enough, IOU Financial offers the option to easily renew your loan once you have paid back at least 40% of your original loan. Depending on your previous repayment history, you may be offered lower rates and higher loan amounts for your new loan.

One thing that stood out during this IOU Financial review is the company’s which helps you estimate how much you will be able to borrow and at what costs. It also shows you the amount of money you save in case you should decide to pay back your loan before your loan term period ends.

Rates and Fees

While IOU Financial’s rates and fees are not low, they are competitive. However, comparing the costs of IOU Financial’s loans to the products offered by other short-term lenders can be a little tricky since this company builds all fees, except the administration fee, into the factor rate you will be quoted. This includes the origination fee of of 8.8% of the loan amount, which is built into your repayment schedule, unlike with other lenders who usually deduct the fee from your overall loan amount. If your loan amount is $15,000, for example, a fee of $1,320.00 will be added to your loan amount. If the loan is renewed, the origination fee is reduced to 7.8% of the loan amount.

A Non Sufficient Funds fee (NSF fee) of $25 will be charged if your daily loan payment fails due to insufficient funds in your business account. Furthermore, if you decide to change bank accounts, you may incur an additional fee. A one-time administrative fee of $349.00 is charged for the general costs of managing your loan. IOU Financial also calculates a guarantee fee, assessed on your loan relative to the risk involved. It should be noted that payments are only made on business days, so you won’t be making any loan repayments on weekends or public holidays.

Let us look at an example. If you choose a loan of $5,000 with a loan term of 12 months, you will have 252 payments of $25 – $26 and your total payback will amount to $6,363 – $6,638. If you opt for a shorter term, IOU Financial will reduce their flat fees. If you choose the minimum loan term of 6 months for your loan amount of $5,000, you will be looking at 126 daily payments of $46 – $46, with the total payback amount being $5,763 – $5,788.

Another example of a bigger sized loan: a loan amount of $150,000 over the maximum loan term period of 18 months will mean 378 daily payments of $549 – $557 and a total payback amount of $207,633 – $210,633. If you opt for the shorter loan term of 15 months, for example, you will be looking at 315 daily payments of $632 – $639 and a total payback amount of $199,010 – $201,260.

One of the positive aspects of getting a loan with IOU Financial is the fact that the company does not charge a prepayment penalty. Whereas many other small business loan providers will charge you a penalty for paying back your loan early, with IOU Financial you only pay interest for the actual time you are using the loan.

IOU Financial

Borrower Qualifications

If you are interested in applying for a small business loan at IOU Financial, you will have to meet a few requirements that are a little bit more strict compared to other short-term lenders. First of all, you will be asked to prove ownership of your business that equals at least 80%, or 50% if the business is co-owned with a spouse. To qualify for an IOU Financial small business loan, your business must be at least one year old, and must be fairly successful: you are expected to show an annual revenue of at least $100,000, with 10 or more deposits generated per month into your business bank account. IOU Financial also requires a $3,000 average daily balance over a three-month period as well as a personal guarantee.

Application Process

One of the clear advantages we discovered during this IOU Financial review is the quick and straightforward application process. While applying for a loan at a regular bank can take weeks and reqire a mountain of paperwork, IOU Financial proudly advertises a “3-minute application”, with a decision made within seconds. When you start the application process, there is an automated approval system that assesses your financial realities. This step involves filling out an online questionnaire, which takes just a few minutes. Those who prefer to go over this questionnaire on the phone are invited to call the helpline and fill in the answers with the assistance of an IOU Financial representative. If you meet all the required criteria and have all the documents needed for the application, you will be asked to call a company representative on the phone for a live closing process. Once you have accepted the loan, funding can be granted to you within a day or two, though it can sometimes take a bit longer. On their website, IOU Financial claims that most positive applications are processed within a maximum time frame of 48 hours, the company’s pre-approval rate being quite high at 80%. To check your eligibility for a small business loan, IOU Financial performs a soft credit pull, meaning that you don’t need to worry about your credit score being affected.

In order to make the application process as smooth as possible, make sure to have the following documents ready: three months of bank statements if applying for loans with 6-12 month terms, six months of bank statements and full tax returns if applying for loans with 12-18 month terms, a voided check, and your driver’s license.

If you apply for a small business loan with IOU Financial and it turns out that you do not qualify, you can re-apply 30 days after your first application. Just make sure to address the issues that made them reject you in the first place.

Help & Support

Getting in touch with an IOU Financial rep is easy. There is a blue envelope icon on the bottom right corner of each page allowing you to quickly send a message. Alternatively, you can call the company’s support team directly, which will get you a faster response. However, whereas many clients praise the professionalism and competence of IOU Financial’s support staff, others say the exact opposite, which suggests a certain inconsistency in the quality of their customer support.

The website is easy to navigate, with a clear structure and an appealing look. You will find a range of interesting material on small businesses, including a blog and informative videos.

User Reviews

Positive customer reviews often mention the helpful customer support IOU Financial provides. The company’s representatives are said to be competent, friendly, and easily reached. Many reviewers also point out the seamless application process which, many borrowers say is more transparent than with other comparable small business loan providers.
Comments bearing criticism suddenly experiences irregular cash flow.

We also looked at the National Funding reviews that were posted at BBB (with total of 28 reviews at the time of this National Funding review). The BBB gives National Funding an A+ ranking, but the average ranking is 3 stars and there are 46 customers complaints (in addition to the 28 reviews). Most of the complaints against National Funding referenced the company’s overly aggressive marketing teams, which can certainly be frustrating for applicants. However, complaints against the company that aren’t relevant to the actual funding and transfer of the loan are, in our opinion, a bit more comforting than those against companies whose borrowers had actual problems with their loan procurement or terms.

The majority of user reviews that address customer service are positive and this might be the reason why National Funding received recognition in 2013, 2014, 2015, 2016, and 2017 by Inc. Magazine and the San Diego Business Journal as one of the fastest growing companies both locally and nationwide.

Final Thoughts

A small business loan with a short-term loan provider like IOU Financial will obviously never be as affordable as a long-term loan with more traditional lenders, but as far as short-term lenders go, IOU Financial is a solid company with transparent terms and fees that provides competitive rates compared to many other lenders in this field. When doing research for this IOU Financial review we were happy to see the emphasis the company puts on their prepayment incentives: whereas many other short-term loan providers put a penalty on prepayments, IOU Financial encourages its clients to pay back their loans early, even providing a calculator that shows how much one can save by doing so.

While the application process is pretty fast and straightforward, we need to mention that there are other short-term lenders out there who require even less time and effort to apply. Whereas with many of IOU Financial’s direct competitors funding can be granted within 24 hours, this company usually takes at least 48 before funding is secured. While this is still pretty quick, it may be a consideration for some small business owners looking for extremely fast cash.


Quarter Spot Review

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Founded in 2013, QuarterSpot, is an alternative lender that offers short-term loans to small businesses. Unlike other short-term lenders, QuarterSpot loans are fully amortizing, which means that your daily or weekly payments go to both interest and principle. If you’re able to pay your loan ahead of schedule, you’ll be able to save on avoided interest without incurring a prepayment penalty. In other words, with QuarterSpot, you can actually save on interest by paying your loan back early.

QuarterSpot aims to help businesses thrive with quick and affordable funding that comes with attractive terms. QuarterSpot offers short-term loans in amounts ranging from $5,000 to $250,000. The lender offers 9, 12 and 18-month term loans with annual percentage rates ranging from 30% to 70%.

During the course of this QuarterSpot review we were impressed to discover that if you need fast financing for your small business, QuarterSpot could be a good fit. They rely heavily on technology to make quick and informed decisions about your eligibility, so you’ll have as little as 24 hours, to funding.

As long as you can prove financial stability with your bank statements, QuarterSpot allows you to use the funds for all business purposes. For this reason, customers come to QuarterSpot for their working capital as well as equipment financing needs.

This lender also offers the option of repaying on a weekly basis, an arrangement many merchants find easier to handle than the standard daily repayments common in the industry.

QuarterSpot is very flexible when it comes to loan requirements and they evaluate borrowers by analyzing their bank transaction history, essentially looking at it as a real-time profit-and-loss statement. This gives the lender a better understanding of the strength of a business. This means that even if you have bad or poor credit score, QuarterSpot may provide you the cash you need to run your business. Nevertheless, borrowers with good credit and strong business financials may qualify for better loan terms.

QuarterSpot’s loans are unsecured, so they don’t require collateral. but the company may go after your business assets if you default on your loan.

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  • No prepayment penalty
  • Bad credit loans available
  • Transparent terms and fees
  • Funding within 24 hours
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  • High cost of borrowing
  • Personal guarantee
  • High origination fe

Services Offered & Types of Funding

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  • Type of funding – Small business loans / Equipment financing and leasing
  • Age of business / Minimum time in business – 1 year + revenue of at least US$ 200K/year
  • Loan amount – $5,000 – $250,000
  • Minimum credit score – 550
  • Time until funding – as little as 24 hours
  • Repayment terms – 9-18 months
Types of Loans Loan Amount Loan Term Time to Funds Interest Rate
Short Term Loan $5,000-250,000 9-18 months As Soon as 24 Hours 1.11 – 1.38 factor fee

For businesses seeking a lender that offers speed, convenience and ease of qualifying, QuarterSpot is a good option.

Qualifying for a loan at a traditional bank takes time and requires you to have great credit and, often, collateral. QuarterSpot has an easy application process with minimal paperwork, high approval rates and funding in 24 hours. In exchange, QuarterSpot has higher borrowing costs than banks.

You can use QuarterSpot’s short-term loan to cover unexpected costs, finance a short-term project, or even capitalize on a new business opportunity. One of the main advantages that we saw when we conducted our research is that QuarterSpot doesn’t charge a prepayment fee, so you can pay back your loan early. In addition to that, instead of focusing on credit score, QuarterSpot uses a secure login to access three to 24 months of bank account transaction data, the company doesn’t do a hard credit pull, so applying for a loan won’t hurt your credit.

The industries most commonly funded by QuarterSpot include restaurants, professional offices (dentistry, law, physicians), automotive repair, and beauty salons.

QuarterSpot cannot fund businesses in the following industries:

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  • Administration of:
  • education programs
  • housing programs
  • human resource programs
  • public health programs
  • management consulting services
  • Agriculture, forestry, fishing, and hunting
  • Financial investment
  • Ambulatory health care services
  • Motor vehicle wholesalers and dealers
  • Boat dealers
  • Business to business electronic markets
  • Business, professional, labor, or political organizations
  • Collections agencies
  • Credit intermediation and related activities
  • Fire protection
  • Insurance carriers
  • Logging and tree production
  • Nonresidential property managers
  • Telecommunications
  • Rail transportation

Rates and Fees

QuarterSpot charges a flat fee instead of a variable interest rate. This means that the amount you have to repay is determined ahead of time. For example, if you are borrowing $50K, and you have a flat fee of 1.25, you will have to repay $62.5K ($50,000 x 1.25 = $62,500). Repayments are made on a daily or weekly basis and are directly debited from your business bank account.

QuarterSpot flat fee rates range between 1.1 to 1.4. That means that for every dollar borrowed, you’ll have to repay between $1.10 and $1.40.

QuarterSpot charges an origination fee of 6 – 9%. These fees are charged as part of the “cost” of processing and managing your loan. We encourage you to specifically check these fees before signing any agreement with this lender.

One thing to know about a QuarterSpot loan is that it’s a fully amortizing loan. While other lenders penalize you by charging a fixed amount of interest even if you pay off your loan early, there’s no prepayment penalty, so you won’t be charged extra for paying your loan off early. In fact, you’ll avoid interest payments if you pay your loan off early.

Borrower Qualifications

QuarterSpot offers small business loans to companies in almost every corner of the country. However, QuarterSpot does not work with businesses that are based in: North Dakota, Rhode Island, South Dakota, and Vermont. In addition to this, QuarterSpot does not work with businesses that operate out of a home address and that have more than 5 NSF days in a three-month period.

QuarterSpot does not check your business credit score and any business owner can apply for funding with QuarterSpot.

Basic requirements to get a business loan through QuarterSpot include:

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  • Minimum of 12 months in business
  • Minimum of 2 employees
  • Gross revenue averaging at least $200,000 ($16,000/month)
  • 3 months business bank statements must be provided
  • A voided business check
  • Copy of your driver’s license
  • QuarterSpot requires you have a business bank account that has a minimum average balance of $2,000 and at least 10 monthly deposits.
  • QuarterSpot will not lend to borrowers who have declared bankruptcy in the past 2 years.
  • $100,000 or less in tax liens.
  • QuarterSpot requires borrowers to own at least 50% of the business in question.

QuarterSpot requires a personal guarantee, which puts your personal assets on the line if you default on your loan. And while it doesn’t require a lien upfront, if you default on the loan, the company reserves the right to file a UCC lien on the business, which essentially means you’re putting up your business as collateral.

Application Process

You begin the process by applying via the QuarterSpot’s website, where you will be asked to submit basic information about yourself and your business. Once you’ve submitted basic information about your finance, including your social security number and last three months of business bank statements, QuarterSpot will conditionally approve you for underwriting. QuarterSpot only performs a soft pull on your credit, which will not have an impact on your score.

When you’ve submitted all the necessary documentation, your information will be sent to the underwriting department. An underwriter will look over your information and make the final decision regarding terms and fees. In certain circumstances, QuarterSpot might ask for more information before making their decision. A loan offer should arrive within 24 hours following the receipt of all the requested information. QuarterSpot will send you a link to an approval form that will allow you to make adjustments to elements like the amount you’re borrowing, your term length, and payment frequency. If you’re satisfied with the terms of the loan, you can review the legal and formal terms and conditions of the loan and sign the document electronically. If you receive and accept an offer from them, QuarterSpot can deposit the funds in your bank account in less than an hour.

The time from application to funding normally takes two or three days, largely depending upon how long it takes for you to submit the necessary documentation. If QuarterSpot rejects your application, you’ll be able to re-apply after 60 days.

Help & Support

QuarterSpot’s headquarters are centrally located in California. You can reach QuarterSpot by phone, email or through their website. You can also interact with QuarterSpot on Twitter. QuarterSpot’s staff are passionate about helping small business owners. They’re quick to answer and listen to their customers to solve true financial needs, and their focus is 100% on offering customers fast, painless, and affordable loans.

QuarterSpot has a FAQ page to answer your questions about its loan process and you can find customer testimonials section of their website that provides real examples of how QuarterSpot loans have benefited small businesses.

User Reviews

During this QuarterSpot review it was surprising to see that the company has only 19 reviews on the website Trustpilot, with 79% of them giving QuarterSpot an “excellent” 5-star rating. Of the 5-star reviews, the claim was primarily due to ease of applying, transparency, and customer support along with a secure online process and a great renewal department that communicates with you as your portfolio grows, making it easy to qualify for more capital when you need it. We further analyzed the 2 (out of 19) bad (one star) QuarterSpot reviews and it seems that the main concern is related to the high cost of the loan, which is something that we have mentioned during our review as well, but this shouldn’t come as a surprise to the borrower. Though many other lenders have more reviews out there, the low number of reviews shouldn’t necessarily be a negative sign – it could just mean that the company isn’t aggressively pursuing reviews at this time, or that its borrowers are more focused on building their businesses than writing reviews.

We also looked at the A+ ranking granted to QuarterSpot by the BBB which is a very good indicator of the company’s professionalism.

Final Thoughts

If you need fast financing for your small business, QuarterSpot could be a good fit. They rely heavily on technology to make quick and informed decisions about your eligibility, so you’ll have a fast time to funding.

Though QuarterSpot has a minimum FICO requirement of 550 for a personal credit score,

Instead of focusing heavily on credit score, QuarterSpot also looks at your recent bank transactions to get a fuller picture of your company’s finances. Your bank statements are reviewed as a real-time profit-and-loss statement, which gives the lender a better understanding of the strength of a business. The company doesn’t do a hard credit pull, so applying for a loan won’t hurt your credit.

We especially appreciated that QuarterSpot loans are fully amortizing. This lets the borrower save on interest by paying back the loan early. The company doesn’t charge a prepayment penalty.

We would not recommend QuarterSpot for every business, because the flat borrowing fees are very expensive. However, because QuarterSpot has eliminated some of the pain points of borrowing money for such a short period of time, this lender is worth considering if you don’t have access to less expensive forms of debt.


Fundera Review

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Fundera has been in the business of making loans happen since 2013. Based out of New York City, they serve as go-betweens for small businesses owners and credit providers in the alternative lending space. Though there are other companies that also act as a loan facilitators or middlemen, but the difference is that Fundera has vetted all of its credit providers to ensure that they meet certain criteria. Given that exclusivity, Fundera has far fewer partners than its competitors. Nonetheless, Fundera believes that the options they provide are broad enough that most borrowers will be able to find a match to satisfy their credit needs.

The funding products that are available to Fundera’s borrowers are quite varied, running the gamut from the simple short-term installment loan, to the traditional working capital line of credit and on to the less-conventional invoice factoring. Fundera states that most of the loans it is able to facilitate are of a short-term nature of generally, less than two years, though longer-term loans are not unheard of and will certainly be dependent upon the borrower’s qualifications and credit strength.

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  • Borrower requirements vary depending on lender
  • Offers wide range of small business loan products
  • Startups are not immediately excluded
  • Fundera’s partner lenders are carefully screened
  • Terms and fees are transparent
  • Strong reputation in the public arena
  • Website helpful in understanding borrower options
  • Fundera committed to borrower’s bill of rights
  • Fundera’s eligibility tracker automatically assesses new products for previously ineligible borrowers
  • Application can be completed through QuickBook or Xero
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  • Interest rates and factor rates can be high
  • Additional fees may be assessed, depending on the lender
  • Fundera’s pre-qualification is no assurance of a loan approval
  • Funding can take as long as two weeks

Services Offered & Types of Funding


As stated, Fundera is not a lender, but acts as the middleman between a borrower and one of many potential lenders. All of those lenders have been carefully screened by Fundera to meet its high standards and to ensure that there is no violation of the Small Business Borrower’s Bill of Rights (which Fundera has signed onto and which essentially states that certain standards of fairness, transparency and borrower’s rights will be paramount in the lending process).

Fundera’s partner/lenders are some of the biggest names in both the traditional and alternative lending space.

Given that the lender/partners are varied, they are able to provide the widest range of products that should satisfy the needs of most borrowers.

Those products include, but are not limited to, the following:

Short-term loan

      • Duration of less than one year
      • Typically a flat fee multiplied by the loan amount
      • Repayments are more frequent, sometimes daily

Installment loan

      • Duration of more than one year
      • Interest charged as an APR (typically)
      • Repayments are typically monthly but may be weekly

Invoice Factoring

      • Lender may purchase up to 80% of eligible invoices
      • Rates may be high and charged on a daily rate (factor)
      • Repayments are usually quite frequent (often daily)

Merchant Cash Advance

      • Rates may be high and charged daily (as a factor)
      • Repayment is usually daily and may vary depending
      • Opportunity for non-sufficient funds charge high if receivables can’t cover daily payment

Line of Credit

      • Maturity of each draw will vary depending on your specific terms and conditions
      • Interest charged only on actual amount outstanding, not available
      • Repayments typically increase availability of funds

Equipment Loan

      • Duration usually longer than one year
      • Loans are typically fully amortized with interest charged as an APR
      • Loan secured by equipment purchased (which typically lowers the APR)
      • Repayments are typically on a monthly basis

SBA Startup Loan

      • Can act as lender on behalf of Small Business Administration
      • Loans are guaranteed by the SBA
      • Start-up loans can be as high as $1 million for eligible borrowers
      • Terms can vary from 6 months to as many as 10 years
      • Rates and loan terms are generally favorable

SBA Loan

    • Can act as a lender on behalf of the Small Business Administration
    • Loans are guaranteed by the SBA
    • Borrower requirements are more stringent than alternative lenders
    • Interest rates and loan terms are usually very favorable

Rates and Fees


Because Fundera’s partner/lenders set the rates and fees for any offer they make to a borrower, there is no clarity as to how much a borrower will ultimately pay for a loan. Fundera itself does not charge any fee to the borrower for applying for a loan through them. However, they do charge a fee to their partner/lender if a loan is approved and funded. Whether or not those fees are passed through to the borrower is dependent upon the lender, but should be disclosed in the borrower agreement, nonetheless.

When a lender makes an offer to a borrower, they are required to disclose the interest rate to be charged and any applicable fees. Those fees could include the following:

Origination fee

      • This may be a fixed price or else a percentage of the loan amount
      • May be deducted from the loan proceeds

Documentation fee

      • This is for document preparation, and may include cost for filing liens against assets

Maintenance or subscription fee

      • A recurring charge to monitor and maintain the loan

Late charges

      • Usually a fixed amount, assessed after a specific number of days of non-payment have elapsed

NSF fee (for a returned check)

Guarantee fee

  • Applicable to SBA loans over a certain threshold
  • May or may not be passed on to borrower

Draw fee

  • Applicable to lines of credit, generally

Prepayment penalty

  • Usually a percentile charge for repaying your loan early

Borrower Qualifications


While there are no hard and fast rules for a borrower’s requirements, Fundera has put together a snapshot of a typical borrower. Essentially, it is a business which has been in operation for more than two years, with gross monthly sales of around $10,000, and an owner with a FICO score of 620 (or better). Now, that’s not to infer that not meeting that standard is a deal-breaker; every one of Fundera’s network partners will have particular borrower requirements which, in some cases, may be considerably more relaxed.

Fundera says that the lenders it has vetted are typically willing to take on the risks and complexities typically associated with small business funding. As such, the criteria that the underwriters will use to assess a borrower’s creditworthiness are likely to be broad-based and, in some cases, non-traditional. For example, they may look at a company’s social media presence, or whether or not the company uses specific accounting software or have a checking account or banking relationship with one of their own partners. Given that Fundera’s lenders are more willing to take on a relationship that could be deemed higher risk, it will often come with higher rates of interest and/or fees.

Application Process


It’s a 4-step process on the Fundera website to apply for a small business loan product.The first step is creating an account on the Fundera landing page and then self-reporting basic information about you and your company (contact information, credit score, revenue, length of operation, information about the type of business, etc.).

Once submitted, you’re automatically moved onto the second step. Here, a lending specialist from Fundera will contact you to get any additional information to support your request. From there, a list of potential lenders and available options will be provided to you. Fundera doesn’t want to leave you hanging at this crucial juncture, so if you need help in assessing which is the best suited to meet your needs, you’re encouraged to contact your Fundera specialist who will work with you. If you prefer to go it alone, they offer the use a loan calculator which they have on the Fundera website.

The third step is to move forward with your lender of choice. You may be required to fill out an application with the lender you’ve chosen. They, in turn, will be in touch with you if they have additional questions or require specific documentation to support your application. The Fundera FAQ page suggests that that documentation will be largely dependent upon the type of funding the borrower is seeking, and could include the following:

  • Several months of bank statements
  • Access (read-only) to online accounting software
  • Several months of credit card statements
  • Copies of federal tax returns
  • Copy of your most recent financial statements
  • Verification of rental space
  • Valid state-issued identification

Once your lender’s underwriter is satisfied with the information you provided, they will move forward with the process and make a formal offer. In some cases, you may even receive offers from more than one lender, especially if you have the creditworthiness to back up your request, in which case you will have to assess which lender offers you the better deal.

That leads us to the fourth step; upon your acceptance of the offer, the loan amount will be transmitted to you in the manner in which both parties had previously agreed.

Help & Support


Fundera’s customer service specialists are available Monday through Friday, by email, phone or live chat via their website. They also have a presence on social media through which you can contact them for questions which are more basic and not account specific. Their FAQ page is exceptionally detailed with answers to many different types of inquiries, while the Fundera blog has a whole host of articles and posts which can help small business owners in formulating a working strategy for their company. They also have guides, how-to’s and tips for still more guidance. In short, they want to ensure that you are getting the most out of your small business loan.

User Reviews


Fundera has an AAA+ ranking with the Better Business Bureau. On the website Trustpilot, of the 463 reviews, 84% have given them a 5-star rating. Of the 4% of 1-star reviews, it is clear that the reviewers did not understand that Fundera was merely the middleman in the process. Most of the complaints were about delays from the lender, or requests for additional information before a decision could be made. Fundera only pledges to connect a borrower with a lender; they cannot compel the lender to make a loan. Some reviewers complained about the pulled credit history; Fundera responded that they only do a soft pull which does not impact a borrower’s credit history; however, once a lender takes over the process a hard pull on your credit is generally a necessity. One of the things most noticeable in all of the negative reviews was the absence of complaints about aggressive marketing tactics and incessant, harassing phone calls; Fundera states clearly that is it not a lead-driven company and does not sell your information to third parties.

Final Thoughts


Fundera clearly seems to be one of the better facilitators in the lending space for small business owners. The fact that it pre-screens both its potential borrowers and its partner/lenders makes the likelihood of a good match that much greater. While there have been some complaints about a borrower’s pre-qualification not moving into the approval stage, that is typical of any lender in the industry; each will have its own underwriting criteria that will need to have been met.

The absence of aggressive marketing tactics is also a nice change of pace from the norm; Fundera pretty much allows the borrower to drive the process without hounding them for a response. The only exception is Fundera’s promise to periodically review the information on an otherwise ineligible borrower with a view to helping with a new product some time in the future.

All in all, the advantages for using Fundera far outweigh the negatives. They don’t come right out and say that they provide one-stop-shopping, but that is what they do and they do it very well.


Forward Financing Review

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Every small business owner has hopes and dreams and aspirations – face it, if they didn’t, they’d be working for someone else! Many times, however, while they have the desire and the will, they don’t have the means or money to turn a business dream into reality. So where does a business owner go when his own personal credit is far from good, but he has a viable plan of action and a decent revenue stream? To the alternative lender market for small businesses, that’s where. And that’s where Forward Financing comes in.

Forward Financing caters to small businesses of a certain nature:

  • Some start-up or fairly-young businesses (operations of one year are acceptable)
  • Businesses whose owners have only mediocre credit scores (FICO score of only 500 is not unusual)
  • Businesses that might have a greater cash need (maximum loans of $300,000 which is more than many other lenders offer)
  • Businesses with an otherwise exclusionary loan purpose (there are very few restrictions on use of funds)
  • Businesses which have a need for as much upfront cash as possible (the upfront fee, though tiered, is less than the percentage origination fee charged by many rivals)

Forward Financing sets itself apart from other alternative lenders in that is it intended to be an outlet for small businesses, and, in some cases, start-ups, which might a less than stellar credit history. The company is one of only a few in the industry that has effectively provided relief for cash-strapped companies which don’t have good credit; the drawback, of course, is that the fees are generally much higher than traditional lenders. But during this Forward Financing review we found that its borrowers usually understand their precarious predicament and generally do speak very highly of the company (despite the high fees), as evidenced by online reviews.

Another thing that we found interesting during this Forward Financing review is that the lender offers loans in every state, while many lenders exclude some states. Still, there are some businesses that will not be eligible for a Forward Financing loan, including gambling, casinos, cannabis dealers, weapons dealers, janitorial services, financial services companies and cell phone companies.

Forward Financing was established in Boston, MA in 2012; since then, the company has financed more than $300 million across the United States and has had over 6,000 borrowers. Not long ago, Inc. Magazine said ranked them the 15th fastest growing entity in America, and the 3rd in the sector. From 2014 to 2017, the company grew nearly 13,000%, generating annual revenues of $28.3 million.

Forward Financing offers only two types of loans; a short-term loan (up to 12 months, only) and a merchant cash advance loan (also, of a relatively short duration). Because the terms are so short, the catch is that their rates are generally on the higher end. The company touts itself as being able to fund a loan quickly, sometimes in as little as 24 hours. That’s great when you’re in desperate need of fast cash but there’s a caveat, of course. The short-term nature of either loan means repayment will also be quick, but perhaps not painless. Both types of loan require daily repayments, either through an automatic debit of your checking account (in the case of the short-term loan) or else against your future receivables (in the case of the MCA).

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  • Loans up to $300,000
  • Funding available for newish businesses
  • Borrowers with a “poor” credit score are still under consideration
  • Few restrictions on use of funds
  • Permits loan renewals after six months
  • Willing to take a subordinate lien position (in cases where collateral is required)
  • Willing to work with borrower with negative average daily balance in bank account
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  • Maximum repayment term is 12 months
  • Factor rates are higher than the industry average
  • No interest forgiveness on loan renewal

Services Offered & Types of Funding


Types of Loans Minimum
Loan Amount
Loan Amount
Interest Rate Processing Fee Repayment Terms Collateral Required
Short-term Loan $5,000 $300,000 Factor rate: ranging from 1.3x to 1.5x Tiered* 4 to 12 months; fixed rate repayment automatically, each business day None Personal Guaranty
Merchant Cash Advance $5,000 $300,000 Factor rate: ranging from 1.3x to 1.5x Tiered* 4 to 12 months; pre-agreed percentage of daily credit card sales “held back” then repaid next business day UCC-1 Lien on a case-by-case basis

Rates and Fees


Forward Financing charges a “factor” rate on its loans, which ranges from 1.3x to 1.5x. To determine your actual cost, multiply your loan amount by the factor rate. The amount over the original loan amount is your cost. For example, a $5,000 loan at a factor rate of 1.3x would be a total repayment of $6,500 while a factor rate of 1.5x would be $7,500. In the former, you’re paying $1,500 extra in interest while for the latter, you’re paying $2,500 in interest. Remember, this is over a maximum of 12 months, and it doesn’t include the processing fee.

Repayment terms of the loans depends on the loan type. If you opt for a short-term loan, repayment will be a fixed amount and will be repaid daily from the designated bank account. In that way, the amortized loan will be fully repaid at the end of the agreed term.

If you take a merchant cash advance, the daily repayments will vary, and will depend upon the previous day’s sales. A percentage of those sales will be agreed upon prior to the first payment, and that amount will be “held back” and repaid on the next working day. In this case, the amounts repaid daily will vary; when sales are higher, the repaid amount will be higher, while lower sales will mean a lower payment. Given that, the actual repayment of the loan could be sooner or later than the 4 to 12 months duration.

The processing charged by Forward Financing is an upfront flat fee (similar to an origination fee). However, unlike some lenders that charge a percentage of the loan amount, Forward Financing’s processing fee is tiered and dependent on the amount of the loan as follows:

Loan up to $10,000 $300
Loan up to $25,000 $495
Loan up to $50,000 $795
Loan up to $100,000 $995
Loans > $100,000 up to $300,000 *Contact Forward Financing for fee

Forward Financing does have a prepayment penalty if you decide to pay your loan off before the agreed upon deadline. Their website does not disclose this amount but understand that the fee could be significant enough to wipe out any potential benefits you might have gotten from prepaying.

Borrower Qualifications


Forward Financing’s borrower qualifications are among the most “lenient” in the industry, which is a boon for borrowers with “iffy” credit.

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  • Minimum credit score of 500 for the business owner
  • Company in business for at least one year
  • Annual revenue of $150,000 required
  • Monthly minimum of $10,000 in deposits into business bank account
  • Maximum of eight days with a negative ending balance in the most recent month (as confirmed by recent bank statements)

Application Process


For any loan from Forward Financing, the first step is completion of a few online questions which should take less than 10 minutes or so. It begins with you providing the following information:

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The Basics:

    • How much money do you need?
    • When did your business begin operations?
    • Are you the business owner? (If there is more than one, you will need to specify that.)

About the Business:

    • What is your business’ legal name?
    • What is the contact information, i.e. address and phone number of your business?
    • Do you have a company website and if so, what is the link?
    • What industry is your business identified with?
    • What is your Federal Tax ID number?
    • What are your monthly revenues?

About you (and other owners):

    • What is your full name?
    • What is your date of birth?
    • What is your contact information; i.e. home address, phone number, email address, phone number
    • What is your Social Security number?

About the Loan:

  • What is the purpose of the loan?
  • Can you upload recent business bank statements (last three months)?

Once you’ve submitted the application, it moves to the review stage which takes about an hour. In making a loan determination, the company uses a revenue-based model, focusing on cash flow. Depending on the type of loan, they will also consider either the average daily balance of the business checking account (for the term loan) or the average sales (both debit and credit cards) for a merchant cash advance. Given their focus, a poor FICO score is usually not a deal breaker.

If approved, you’ll be contacted by a representative of Forward Financing who will give you the offer terms of your loan. You will have to review your options and can choose to accept the loan (or not). If you accept, Forward Financing will move forward with the loan agreement and other documentation for your signature. Once everything is signed and neat and tidy, they will arrange to fund the loan (minus the applicable processing fee).

Help & Support


After the loan has been approved, Forward Financing will assign each borrower a dedicated advisor who can help smooth out any wrinkles in the process of funding and repayments. The Forward Financing website is very “vanilla,” meaning it has very little useful information. However, the team of employees at Forward Funding is often given very high marks for their knowledge and assistance, so any questions should be directed to them, either over the phone or by email.

User Reviews


On the website Trustpilot, 89% of Forward Financing’s 397 reviews were “exceptional,” and given a 5-star rating; another 9% considered the company, “great,” while 1% said they were only “average.” Another 1% gave Forward Financing a “poor” or 1-star rating. Most reviewers of the “exceptional” ratings cited the ease of the process, the quick turnaround to funding, great customer service, and joy at being approved despite having poor credit. There are a number of “verified orders” which could provide some legitimacy except for the fact that in most of the cases they were invited to write the testimonial by Forward Financing. Of the bad reviews, Forward Financing reached out in each instance to connect with the reviewer in an attempt to get some clarity.

Final Thoughts


It’s difficult enough to find funding when your credit is decent, and even more difficult when you’ve had financial or credit difficulties in the past. But if you’ve reached a stage in your business that you just need a leg up, regardless of the costs, then Forward Funding might be the boost your business needs. Yes, their factoring rates are higher than the industry average, and granted, their loan duration is significantly shorter, but for those businesses who need money yesterday, this might be your only shot. As an advantage, finishing with the loan payments quickly will free up your money for future expenses. The good reviews by their borrowers on their turnaround time, transparency and funding times suggest they’re in the game to stay, so if you can handle the terms, Forward Financing might give you the step forward your company needs.


Lendio Review

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Lendio is a free online service that helps business owners to get loans to support their professional goals. The company was founded in 2011 as a way to offer small business owners a quicker way to get funded. With a network of over 75 lenders offering multiple loan products, Lendio’s online search tool provides offers from a wide variety of lenders and matches them with what a small business owner is seeking.

Lendio’s marketplace is what sets the company apart from other small business lenders. The marketplace brings all options together in one place to address every business need including lines of credit, short-term specialty financing, long-term, low-interest traditional loans and merchant cash advances. Lendio can support your business activity and growth, whether you need to pay for equipment or commercial real estate, fund a business acquisition or pursue other business goals.

Lendio’s technology makes small business lending simple and decreases the amount of time and effort it takes to secure funding. Lendio claims on their website that while banks turn down 80% of their applicants, they find funding for more than 65% of the small business that apply with them. Lendio does not originate business loans. Rather, this service operates more like a “business funding matchmaker”. You tell Lendio who you are and what your needs are and they will provide you with the best solution.

One thing that really struck me during the course of this Lendio review is how deeply the company wants every small business to succeed. I was very impressed that for every loan facilitated on Lendio’s marketplace platform, Lendio contributes a percentage of funds to low-income entrepreneurs around the world through

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  • 10 different loan types
  • Relaxed credit score requirements
  • 1-7 day time to funding
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  • Complicated terms and fees
  • Some loans require extra documentation
  • Prepayment penalties

Services Offered & Types of Funding

Types of Loans Loan Amount Loan Term Time to Funds Interest Rate
Business Line of Credit $1,000 – $500,000 1-2 Year Maturity 1-2 Weeks 8-24%
SBA Loan $50,000-5,000,000 10-25 Years 30-90 Days Prime+
Short Term Loan $2,500-500,000 1-3 Years As Soon as 24 Hours As Low as 8%
Business Term Loan $5,000-2,000,000 1-5 Years As Soon as 24 Hours As Low as 6%
Merchant Cash Advance $5,000-200,000 Up to 2 Years As Soon as 24 Hours As Low as 18%
Business Credit Card $1,000 – 500,000 1 – 2 Year Maturity 1 – 2 Weeks 8 – 24%
Equipment Financing $5,000-5,000,000 1-5 Years As Soon As 24 Hours As Low as 7.5%
Commercial Mortgage $250,000-$5,000,000 20-25 Year As Soon as 45 Days 4.25-6%
Accounts Receivable Financing Up to 80% of Receivables Up to 1 Year As Soon as 24 Hours As Low as 5%
Startup Loan $500-$750,000 Up to 25 Years 2-4 Weeks 0-17%
Business Acquisition Loan $5,000-5,000,000 Revolving or 10-25 Years As Soon As 30 Days As Low As 5.5%

Business Line of Credit

A business line of credit is one of the most flexible forms of financing. You can use it for just about any small business need: buying equipment, hiring staff, increasing inventory, adding a second location, paying invoices, installing a cappuccino machine, and more.

If you are interested in business line of credit offered by Lendio’s lenders, you’ll typically need to be in business at least 6 months and have $50,000 or more in annual revenue. You’ll also need a credit score of 560 or higher. The interest rate offered by Lendio’s lenders may be as low as 6%. If for example In this sense, Lendio’s interest rates are definitely competitive.

SBA Loan

For many small business owners, an SBA loan can be the perfect loan to cover just about every need of your small business. These loans are partly guaranteed by the U.S. Small Business Administration. Because lenders have much less risk in the case of a default, they’re more likely to provide funds to entrepreneurs like you.

SBA loans are known for being more paperwork intensive, with a much longer time to funds and a higher percentage of rejection than direct online lenders.

Lendio offers helps small businesses get one of three SBA loan offerings. You can opt for a standard SBA 7(a) Loan ($25,000 to $350,000) to buy land/cover construction costs/buy or extend existing business/buy machinery or refinance your existing debt, with a term length of up to 10 years. Lendio can also help you get an SBA 504 Loan to finance fixed assets such as land, building and even long-term machinery. If you need immediate cash, Lendio can help you with an SBA Express Loan if you meet the necessary requirements.

Positive customer reviews often mention the helpful customer support IOU Financial provides. The company’s representatives are said to be competent, friendly, and easily reached. Many reviewers also point out the seamless application process which, many borrowers say is more transparent than with other comparable small business loan providers.

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Lendio’s experts know that no matter how much planning you do, small business ownership is full of surprises and this why Lendio ‘s marketplace include lenders who can provide financing in as little as 24 hours. You can use it to cover unexpected costs, survive a slump, finance a short-term project, or even capitalize on a new business opportunity. If you have solid credit and you’ve been in business for two years or more, you have a good chance of qualifying for a short-term loan.

Business Term Loan

A business term loan is the most stable, flexible way to get more working capital to grow your business. Business term loans are set up to meet almost any unique business need. You can leverage your loan for everything from capital improvements to financing new equipment to hiring more staff.

Lendio’s experts understand your need to determine how much finance you can afford and will match you with a loan that bares a fixed interest rate or fixed flat fee, which means your payments will stay the same over the lifetime of your 1-5 year term.

Merchant Cash Advance

When you need cash quickly, this type of financing enables you to borrow against future earnings and get the cash you need when you need it. One of the best things we found during our Lendio review is that you can often get a merchant cash advance funded in just 24 hours. In most cases, you won’t need to submit a mountain of financial documents, your lender will simply want to review your past 4-6 months of bank statements or receivables.

Business Credit Card

If you don’t qualify for a small business loan or you’re just not ready for one, a business credit card from a Lendio lender may be the way to go. A credit card enables you to increase your working capital and get fast access to cash when you need it. You’ll typically need a credit score of 680 or higher to qualify for a business credit card.

Equipment Financing

There are small business equipment financing options for nearly every industry. Big or small, basic or complicated – whatever you need, Lendio can help you cover the costs. To get equipment financing, you’ll typically need to be in business at least 12 months, have $50,000 or more in annual revenue, and have a credit score of 650 or higher.

When you apply for an equipment financing loan on Lendio’s platform, you can expect an interest rate as low as 7.50%. As an example: if you borrow $30,000, your monthly payment will be $380 with an interest rate of 9.00% and an overall APR of 10.34% for a loan term period of 10 years.

Commercial Mortgage

A commercial mortgage can help you buy, build, expand or remodel your business. You can also use Lendio’s commercial mortgage offering to refinance your existing mortgage. Because a commercial mortgage is an asset-based loan, the loan amount and rate of your commercial mortgage will usually be based on your credit and the value of the property you’re using as collateral.

Accounts Receivable Financing

If you own a business, you probably know what it’s like to have people owe you money. That’s where accounts receivable financing (also sometimes referring to as invoice factoring) comes in. You can gain quick access to cash by selling your purchase orders or receivables, so you can get back to business as usual. For this type of funding, your credit rating isn’t very relevant. The factoring company will be more focused on the credit of the company that owes you money, as it’s the crucial factor that determines how likely the factoring company is to get paid.

Startup Loan

If you’re just starting out, getting access to the capital you need will enable you to hire staff, lease office space, increase inventory, buy equipment, or simply cover monthly expenses while you’re growing. To qualify for a startup loan with one of Lendio’s lenders, you typically need to be in business for at least 6 months and have a credit score of 680 or higher.

Business Acquisition Loan

Buying an existing business or franchise should help you accelerate your business growth, but you may need funding to make this possible. A business acquisition loan is the loan that will help you buy an existing business or franchise. Be prepared to show records of the business’s financial performance and valuation, as well as a business plan and financial projections. When you apply for business acquisition loan on Lendio’s platform, you can get an interest rate as low as 5.5% – which means you’ll save a bundle of cash over the lifetime of your loan.

*ForwardLine has a maximum amount of $150,000 that they are able to loan to borrowers who meet their criteria. For amounts greater than $150,000 (and up to $2,000,000), the approved loan will be funded by a third-party lender which will be disclosed in the ForwardLine loan agreement.

Though ForwardLine can provide loans in all 50 states, certain states have their own requirements which may limit the term of your loan. When you apply, a ForwardLine consultant will discuss your options with you.


Rates and Fees

Lendio receives commission from their lenders and doesn’t charge the borrowers directly. Still, there are fees associated with all loans, and Lendio is no different. The terms and rates for Lendio small business loans vary depending on the type of loan and the applicant’s company circumstances.


Borrower Qualifications

Any business owner can apply for funding with Lendio. For most small business loans, your lender will look at factors like your credit history, time in business, and revenue to determine whether you qualify.

Because Lendio works with over 75 different lenders, the specific documentation required to get a business loan may vary.

Basic requirements to get a business loan through Lendio include:

  • Gross revenue averaging at least $10,000 for a minimum of 6 months
  • Minimum of 6 months in business (less for certain loan programs), but generally at least 2 years in order to qualify for the best loans and pricing
  • No minimum credit score (for certain loans)
  • No bankruptcies in the past three years
  • A business bank account
  • You must be current on your mortgage or rent payment
  • The business must be U.S. based

Even after you fill out the application form and submit the necessary documents, you are not guaranteed funding; according to Lendio, only six out of 10 businesses are approved for a business loan through their service. If you want to boost your chances of qualifying, there are a few steps you can take. Start by keeping tabs on your personal and business credit and take meaningful steps to build both. Small things like paying your bills on time and correcting errors on your credit reports really do help. It’s also smart to create a compelling business plan, have the required financial documents organized and on hand, and to identify any possible collateral that could help you secure the loan.

Lendio states on their website that that certain business types are considered “restricted industries” that may have difficulty getting a loan through the platform. Those businesses activities include auto dealers, gambling, hunting, fishing & forestry, legal services, non-profits, mining, commercial real estate and insurance businesses. If your business is one of these industries, it doesn’t mean that you shouldn’t apply, but you should know that you may not be approved simply because of your business focus.


Application Process

While the average bank loan application takes many hours to complete , Lendio’s small business loan applications take only 15 minutes to complete. You’ll need business account bank statements for the past few months. Other basic information needed for the application includes your approximate credit score, the amount of sales your company does on a monthly basis, the industry your business is in, company debt, and the reason for the loan. None of that information requires any documentation if you know your company well.

Lendio will shop your information around to get offers from lenders you may be eligible for. This process should take no longer than 72 hours.

Once your information has been processed, you’ll be paired with one of Lendio’s personal funding managers and will have a general idea of the kinds of loans and rates you qualify for. You can compare offers and choose the one best suited for your business and specific preferences. When you’ve made your decision you will be able to continue the funding process with your chosen lender.


Help & Support

Lendio operates a multi-channel contact center and its customer support is available by phone and email and can be also reached via Facebook, Twitter, Instagram, and LinkedIn.

Lendio will help you through the whole loan process. When you apply through Lendio, a personal funding manager is assigned to you and will ask about your needs, walk you through different loan options, and help you choose the perfect small business loan.

You won’t have to deal with brokers, banks, or confusing financial jargon. This part of the process is extremely helpful and will make you feel comfortable that you’re choosing the right thing for your company.

Lendio also has a comprehensive FAQ page that will answer most of your questions about its loan process. Lastly, the company has a blog that provides real world examples of how Lendio loans have benefited small businesses.


User Reviews

We reviewed hundreds of Lendio reviews on the website Trustpilot, which Lendio links to its homepage. There are, in fact, over 1,400 customer Lendio reviews there, with 88% of them giving Lendio an “excellent” 5-star rating. Of the 5-star reviews, the claim was primarily due to super easy credit application process and that working with Lendio advisors made the process easy and comfortable. We further analyzed the 27 (out of 1,400) bad (one star) Lendio reviews and it seems that the main concern is the fact that Lendio is in fact a gateway – they are not lenders and that Lendio makes its money by inflating the costs of the loans because consumers went through their gateway to their network of lenders implying that if you do the search by yourself, you might reduce the overall cost of the loan.

We also looked at the Lendio reviews that were posted at BBB (with total of 26 reviews at the time of this Lendio review). The BBB gives Lendio an A+ ranking, a very positive sign for anyone looking to apply for a loan with Lendio.


Final Thoughts

In the past when business owners wanted to get capital to fund their business, the owner would have to go to the bank and fill out long, confusing applications. The request would then be sent for review, underwriting and through other processes, and it could take over a month to get a reply. Business owners that wanted to apply with multiple banks would have to repeat the long, time-consuming process over and over before finding the right loan terms.

Lendio was built with the goal of streamlining the process and making the application process quick and easy. Lendio’s dynamic application gathers all the information needed and submits it to any of 75 different lenders. Every question a business owner answers narrows down the options in order to find the perfect fit. In doing so, Lendio cuts the application process in half.

Lendio has facilitated $1 billion in business financing and has helped more than 51,000 small businesses get loans.
If it’s your first time looking for alternative funding and you’re confused about where to start your search or don’t have the time to fill out multiple applications, Lendio may be an excellent resource for your business.