Small business owners frequently require short-term financing to cover operational expenses or address cash flow gaps. For business expansion initiatives, long-term loans help entrepreneurs achieve their growth objectives.
Small business loans can be challenging to obtain for new ventures or businesses with lower credit scores. Credibly provides small business loans through its online platform. With flexible lending criteria, it delivers solutions for businesses that might not qualify for traditional financing.
In this Credibly review, we’ll examine the service’s business loan offerings to help you determine whether your company might benefit from their financing solutions.
What is Credibly?
Credibly is a Michigan-based online lender founded in 2010. The company provides accessible funding through a straightforward, transparent process. Unlike traditional financing options that often don’t accommodate small and medium-sized businesses, Credibly specifically targets this underserved market.
Credibly’s business loan products include term loans and merchant cash advances. The application process is streamlined and funding occurs quickly.
While Credibly’s fees and terms align with traditional lenders, it distinguishes itself through prepayment incentives and more flexible eligibility requirements.
Traditional lenders typically require established businesses with strong credit histories. Credibly works with applicants who’ve operated for less than a year or have credit scores as low as 500.
What does Credibly offer?
Credibly loans come with virtually no restrictions on usage. The company offers flexible financing solutions tailored for small and medium-sized businesses. To qualify for a Credibly loan, you must meet these requirements:
- Valid driver’s license or other government-issued picture ID
- Have a small or medium-sized business that’s been active for a minimum of six months (3 years for business expansion loans)
- A minimum credit score of 500 (650 for business expansion loans)
- Minimum of $15,000 in average monthly bank deposits
- Signed business loan agreement with Credibly
- Allow Credibly to do a credit pull
- Not had a personal bankruptcy in the past two years
- Provide your business’s most recent tax return (required for loans over $100,000)
- Provide your last three bank statements
As a direct lender, Credibly provides working capital loans, business expansion loans, and merchant cash advances. Through its network of external funding partners, it also offers invoice factoring, lines of credit, and equipment financing. Let’s explore Credibly’s loan offerings in detail.
Business Expansion Loans
Borrowers seeking to execute large-scale growth plans while spreading costs over an extended term can benefit from Credibly’s business expansion loans. These loans support equipment purchases, new location openings, product launches, or market expansion.
Loan amounts range from $5,000 to $250,000 with repayment periods of 18 to 24 months. The origination fee is 2.5% and funding occurs within 24 to 48 hours.
Working Capital Loans
Working capital loans provide immediate financial support for small businesses needing to cover operational costs like payroll or stabilize cash flow. This option suits borrowers requiring fast, flexible short-term funding.
Borrowing amounts range from $5,000 to $400,000 with repayment terms of 6 to 18 months. The origination fee is 2.5% and funding occurs within 24 to 48 hours.
Merchant Cash Advance
A merchant cash advance, also called a business cash advance, comes in various forms. Most commonly, you receive a lump-sum payment in exchange for an agreed-upon percentage of future revenues.
Cash advance amounts range from $5,000 to $400,000 with repayment terms of 3 to 18 months. There’s a 2.5% origination fee and funding takes 24 to 48 hours.
Other Business Loans
Business Lines of Credit
A line of credit allows small businesses to draw funds from a predetermined credit limit. Borrowers pay interest only on the amount they use.
Sba Loans
Small Business Administration loans are partially government-backed, enabling qualifying businesses to secure loans with longer terms and lower interest rates than typically available.
Equipment Financing
These loans fund business equipment purchases, including heavy machinery and technology. The equipment serves as collateral, eliminating minimum credit score or business revenue requirements.
Invoice Factoring
Business owners sell outstanding invoices to a factoring company at a discount to receive immediate payment. The factoring company then assumes collection responsibility.
Who is Credibly Best for?
Business owners requiring rapid funding are ideal candidates for Credibly, with funds typically available within 24 to 48 hours.
Businesses in the following industries aren’t eligible for Credibly financing:
- Adult entertainment
- Airlines
- Annual memberships
- Brokerage
- Casinos or gambling
- Cannabis
- Consumer credit
- Dating services
- Escort services
- Financial institutions
- Insurance
- Nonprofits
- Oil drilling
- Payday loan companies
- Used auto dealers
- Warranty companies
- Weapons dealers (Class 3)
Credibly Costs and Fee Structure
Working capital loans and merchant cash advances use factor rates rather than accruing interest. Instead of ongoing interest, these products charge a flat upfront fee.
To calculate your total cost, multiply the factor rate by the loan amount.
For example: Borrowing $10,000 at a 1.1 factor rate equals $10,000 × 1.1 = $11,000. Your cost to borrow is $1,000.
Merchant cash advances and working capital loans require daily or weekly repayments, typically through automatic withdrawals from your checking account.
Expansion loans follow traditional fee structures with fixed rates expressed as Annual Percentage Rates (APR).
These fully amortized loans carry APRs between 7.4% and 34%, depending on creditworthiness.
All Credibly loans include a 2.5% origination fee deducted from first disbursement proceeds. While some lenders determine origination fees based on borrower qualifications or charge no fee at all, Credibly maintains a standard 2.5% rate.
Returned payments due to insufficient funds incur a $25 charge. Given daily or weekly payment schedules, borrowers must maintain adequate account balances for each withdrawal.
Repayment Terms
Credibly’s repayment terms vary by loan type. Working capital loans require daily or weekly payments, business expansion loans use weekly payments, and merchant cash advances involve fixed remittances from your business bank account or credit card processor.
Repayments begin the day after funding. If you receive funds on Tuesday, payments start Wednesday.
Given the frequent payment schedule, most borrowers use automatic repayments. Monitor your business bank account balance closely and track progress through Credibly’s customer service, online portal, or monthly statements.
Credibly offers unique prepayment incentives. Pay off your working capital or business expansion loan within the first half of the term to receive a discount on remaining interest. Additionally, you can apply for additional funding after repaying at least half of your existing Credibly loan.
Repayment activities are reported to business credit bureaus, helping improve your business credit score.
How to Apply for Credibly
The application process is straightforward. Required documents likely include:
- Government-issued ids such as a driver’s license or passport
- Social Security number
- Mortgage or lease agreement
- Business checking account statements from the last three months
- Federal tax returns for the business (needed for loans over $100,000
You’ll provide both personal and business information, including loan amount, personal credit score, time in business, average monthly deposits, and monthly credit volume.
Submit all information online through Credibly’s website. If your business qualifies, a Credibly representative will contact you to discuss options.
They may request additional clarification about your application, giving you an opportunity to ask questions.
Credibly performs a hard credit pull once they receive all documents. This hard inquiry will impact your credit score.
Upon approval, Credibly provides an official loan offer. Sign the loan agreement to receive funding.
The origination fee is deducted from the loan amount. While funding typically takes 3 to 5 days, you may receive funds within 48 hours.
Credibly Competitors
Several online lenders compete directly with Credibly:
OnDeck
This online small business lender offers business lines of credit and term loans similar to Credibly.
Revolving lines of credit range from $6,000 to $100,000, while term loans span $5,000 to $250,000.
OnDeck requires a minimum 600 credit score, business bank account, one year in business, and $100,000 annual revenue. Interest rates start at 11.89%.
Fundbox
Fundbox, a financial technology company, provides small businesses with trade credit and business lines of credit.
With a minimum credit score requirement of 500, you can secure a line of credit up to $100,000.
Annual revenue must reach at least $50,000. Uniquely, Fundbox requires connecting your business accounting software or bank account to their platform.
Kabbage
Kabbage, another fintech company, offers business lines of credit and invoicing services.
Business lines of credit range from $1,000 to $250,000.
Kabbage has no minimum personal credit score requirement, focusing primarily on monthly revenue during underwriting.
Qualifying businesses must operate for at least one year with $50,000 annual revenue (or $4,200 monthly revenue in the last three months).
Credibly Pros and Cons
Pro: Application process is easy and fast
Credibly’s loan application is simple and efficient. With required documents like recent business tax returns and bank statements ready, the process becomes fast and painless.
Pro: Low minimum credit score requirements
Even with poor credit, you may qualify for Credibly financing. Traditional loans remain practically inaccessible for businesses with low credit scores.
Pro: Prepayment incentives
Pay off certain loan types in half the scheduled time to receive interest reductions on your remaining balance. You can also apply for additional loans after repaying at least half of your current loan.
Pro: Funding for home-based businesses
While banks typically don’t provide loans to home-based businesses, Credibly offers funding to these small enterprises.
Pro: Minimum of six months in business
Securing funding with only six months of operation is nearly impossible elsewhere. Credibly works with businesses meeting this minimal requirement.
Pro: No restrictions on working capital loans
Credibly’s working capital loans have no usage restrictions, providing complete flexibility for your business needs.
Pro: Reports history to business bureaus
Building business credit through Credibly financing creates more funding options for future needs.
Pro: Will work with you even if you’ve declared personal bankruptcy
Past financial difficulties don’t disqualify you from Credibly’s short-term loans. You’re eligible two years after bankruptcy discharge.
Con: Factor rates are high
Rather than interest rates, Credibly multiplies factor rates by loan amounts. Depending on the factor rate, costs can become substantial.
Con: Must repay daily
Frequent repayment schedules practically require automatic payments. You’ll need to monitor your balance regularly—relying solely on monthly bank statements could create problems.
Con: Revenue requirement is high
Monthly revenue must reach at least $15,000 to qualify for financing.
Con: Various fees
Origination fees are 2.5%, bounced payments incur $25 non-sufficient funds fees, and merchant cash advances carry $50 monthly administrative fees.
Con: Won’t take a second lien position
Credibly loans won’t accept secondary positions to other debts.
Bottom Line: Credibly Review
If you have lower credit scores and need rapid short-term financing, Credibly might suit your business needs. While interest rates are high, leveraging the funds for business growth could justify the costs.
