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Capital is one of the primary factors of production. Small businesses need money just as much as the large multi-national corporations do. Yet, small business lending has been harder to come by.
What can small business owners due to raise the capital, they need? We will compare two small business lenders – Kabbage vs LoanBuilder. Due to the challenging financial markets, these non-traditional, micro-lenders are becoming more essential to business growth.
Small Businesses Need Capital
The Small Business Administration (SBA) calculates that two-thirds of jobs are provided by small businesses. And, the SBA even provides assistance with financing. According to NerdWallet, these are the eligibility requirements for SBA loans:
- Average size of $371,000
- Credit score minimum of 680
- One year history
- Minimum annual revenue
- Ability to pay proof
Of course, the problem is that many small businesses fail to qualify. They might have a very short history of operations, a bad credit score or low annual revenue. Small companies have a tough time competing with the multi-national corporations.
Although the SBA is trying to help, online lenders might be more beneficial. Alternative lenders continue to emerge as the capital markets remain stretched very thin. Kabbage and LoanBuilder might offer more flexible terms to provide you with much-needed capital.
Kabbage Small Business Loans
More than 170,000 businesses have raised more than $6.5 billion from Kabbage. The platform allows companies to raise up to $250,000. It promises to make a decision on your loan within 10 minutes.
The Kabbage line of credit can be used for anything that you want. After Kabbage reviews your business performance, it will determine how much working capital to make available. You must satisfy the following requirements:
- One year history
- Revenue of $50,000 annually or $4,200 over past 3 months
At least, these terms seem to be satisfactory – they are more flexible than the SBA terms. You can also download the Kabbage app from the App Store or Google Play. Kabbage has an A+ rating from the Better Business Bureau (BBB).
Sometimes, a company sees a vacant shop that would be the perfect addition to their brand. The business might need a fast decision on a loan. Kabbage seems to offer a very fast loan application decision, allowing you to take advantage of great opportunities to grow your business.
Kabbage Line of Credit
While many bankers prefer large multi-national corporations, the truth is that large banks will actually restrict the usage of their funds. This can be counter-intuitive as the business owner wonders if he has full control. With Kabbage, you have the final say on how your funds are used.
Freedom to Spend
Choose 6 or 12 Month Terms
LoanBuilder Small Business Loans
The online lender industry grabbed the attention of the global money merchant clearinghouse, PayPal, which purchased LoanBuilder. Therefore, you can be assured of LoanBuilder using the latest digital transaction technology. LoanBuilder requires your business to satisfy the following requirements:
- 9 months history
- Revenue of $42,000 annually
- Credit Score of 550
Primarily, LoanBuilder offers commercial loans and equipment finance for up to $500,000. The application response time is about 1 day.
Reasonable Fixed Fee
You don’t need to worry about an origination or stacking fee. LoanBuilder charges a transparent fixed fee upfront.
Various Loan Repayment Terms
The range for loans is from 13 to 52 weeks, which is better than Kabbage. This allows you to satisfy short-term capital needs.
Flexible Repayment Terms
Credit Score Minimum of 550
Capital Runs Business
In many ways, there is a paradox in the capital markets. Small businesses have never had more access to more lenders in history; but, it is still very difficult for them to find financing. The opportunity is there – small businesses just need to find the right lender with flexible terms that fit their business profile.