5 Alternatives to Swift Capital

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The digital age has expanded the reach of alternative funders like Swift Capital far beyond their home states. While this gives them access to broader markets, it also brings them into direct competition with all the other companies providing similar services. Discoverability–making sure your product can be found by potential consumers–becomes a huge marketing challenge.

While Swift Capital does offer fast funding to companies with poor credit, they’re far from the only company to do so. Here are five alternatives to Swift Capital.

1. Square Capital

If you’re running a small retail business, there’s a good chance you’ve run into Square (see our review) in some capacity. The company made its name creating credit card-reading accessories for mobile devices. They’ve since expanded their brand to be a one-stop shop for small businesses, covering everything from payroll to scheduling software to point-of-sale. And recently they’ve even moved in working capital.

Square requires only that borrowers do $10,000/yr in revenue, which is considerably less than many of its competitors.

There are a few catches, though. A big one is that in order to qualify for funds from Square Capital you have to already be a Square user. An even bigger one is that Square has to extend an offer of credit to you; you can’t actually apply for it in the traditional sense. If you don’t mind this passive approach or Square’s Walmart-esque, one-stop-shopping philosophy, Square’s not a bad way to borrow $1,000 to $100,000.

For more information check out our full review.

2. PayPal Working Capital

Another payment processor turned lender? Brace yourself, because PayPal (see our review) is not the last on this list.

PayPal’s lending program closely resembles Square’s in that it’s open only to PayPal Premier or Business Customers. You’ll need to have had an account open for at least three months to qualify. You can then borrow between $1,000 and $100,000 (depending on your credit score and sales). Repeat customers can borrow up to $125,000.

PayPal’s short-term loans resemble merchant cash advances (MCAs) in that they don’t have set term lengths and are repaid by holding back a percentage of your daily sales. The difference here is that it’s your PayPal sales rather than your credit card sales being burdened.

While they can get a bit punishing toward the high end, PayPal’s rates are better than those of most merchant cash advance providers out there. Just be aware, PayPal’s application process is a bit opaque; many applicants are rejected for unclear reasons but are later able to get credit when they reapply.

For more information check out our full review.

3. Credibly

Credibly (see our review) is closer to a standard alternative funder than the companies we’ve looked at so far. You won’t need to be an existing customer and you can borrow considerably more: between $10,000 and $250,000. To qualify, you just need a credit score over 500 and at least $10,000/mo in revenue.

But one of the bigger, and rarer, advantages offered by Credibly comes in the form of its medium-term Business Expansion Loans. Rather than the daily payments required of most short-term loans and merchant cash advances, payments on Credibly Business Expansion Loans can be made weekly. These loans have an additional prerequisite: your average daily business account balance has to be over $1,000.

That said, you’ll want to be a little more cautious with Credibly. This lender files a UCC-1 blanket lien on customers which can put almost all your assets at risk if you run into problems paying back the loan.

For more information check out our full review.

4. BlueVine

Where Credibly can help new businesses with poor credit but good cash flow, BlueVine (see our review) can help new businesses with stronger credit but significantly less income. BlueVine requires a credit rating of 600 and a monthly revenue of at least $5,000.

Rather than loans, BlueVine deals in short-term lines of credit, with repayment terms up to six months. For the unfamiliar, a line of credit can be drawn upon up to a maximum limit, similar to a credit card. You pay interest only on the outstanding balance. BlueVine’s credit lines are capped at $30,000, so this is more of a solution for companies looking to finance a number of smaller-ticket expenses.

BlueVine also offers invoice factoring for companies that do a lot of business-to-business transactions. This form of financing provides working capital by selling your unpaid invoices to the lender who will, in turn, immediately front you their cash value minus a percentage cut.

For more information check out our full review.

5. American Express Merchant Financing

As promised, we return to the payment-processor-turned-lender category with American Express Merchant Financing (see our review). American Express offers a financial product similar to a merchant cash advance to companies that have been in business for at least two years and do at least $12,000/yr in card-based sales (you’ll also need to make at least $50,000/yr in revenue). As you might expect, you’ll have to accept American Express to qualify.

What you get in exchange are very low factor rates compared to most other MCAs. We’re talking 1.06 to 1.3 (far more typical is 1.2 to 1.6). Financing can come in one of two forms: settlement advances or short-term financing. The former gives you a monthly disbursement of cash, which you’ll repay over the course of that month. The latter functions as a more typical MCA or short-term loan, with American Express collecting a daily payment or percentage of your daily credit card sales until the principal is paid back.

For more information check out our full review.

Final Thoughts

When it comes to alternatives to Swift Capital, we’ve barely scratched the surface. Remember that business financing is a huge industry with tons of players. Take advantage of the stiff competition by finding the best deal on financing that you can. Our list of short-term lenders and merchant cash advance funders can give you an idea of what’s out there.

Chris Motola

Chris Motola

Chris Motola is an independent writer, journalist, programmer, and game designer who has mastered the art of using his laptop in no fewer than 541 positions, most of them unergonomic. When he's not pushing keys or swiping screens, he's probably out exploring urban or natural environs, experimenting in the kitchen, or delighting/annoying his friends with his ideas and theories.
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