5 Great LoanBuilder Alternatives For Small Businesses
PayPal’s LoanBuilder offers an unusually high level of transparency to prospective borrowers, allowing them to see — and even tinker with — the terms of their loans well in advance of signing on the dotted line.
This is a welcome trait in an industry where speed and low barriers to entry take precedence over openness and affordability.
As we often warn in our reviews, however, it’s a good idea to compare as many different products as you can to get the best deal you can.
So what are some alternatives to LoanBuilder for small business?
Best for: Businesses looking for low rates
This addition to the list probably won’t be a big surprise to anyone familiar with the alternative lending industry. If you’ve been looking for loans online, there’s a good chance you’ve come across OnDeck.
|Time in business:||12 months|
As one of the early arrivals to the alternative lending scene, OnDeck’s had a lot of time to hone their products and offer competitive rates. Their rates are low, just be aware that their listed factor rates are per month, not in total. They do charge an origination fee, but you’re still likely to land a better deal here than with many other alternative lenders. Additionally, OnDeck offers lines of credit for companies that want the flexibility.
You won’t find quite the same level of transparency here as you will with LoanBuilder, though the company’s website should give you a decent sense of what types of fees to expect.
How To Apply For An OnDeck Loan
You can begin OnDeck’s application process online on their website. While applying for the loan, you can call, email, or live chat with a representative to help guide you through the process. OnDeck will eventually need your business tax ID, three months of bank statements, the Social Security numbers of each business owner, and your driver’s license number.
OnDeck is one of the most established online lenders, and a good bet for profitable, established businesses with credit troubles.
Best for: Businesses looking for a transparent alternative lender, businesses looking for medium-term loans
If you’re attracted to LoanBuilder’s transparency but want an alternative, you may want to give Credibly a look. Credibly offers a bit more diversity in their loans than most alternative lenders, providing not just short-term, but more traditional medium-term loans. You can find most of the information you need to make an informed comparison on their website.
|Time in business:||6 months|
|Revenue:||$15K/yr + avg. daily balance over $1K for expansion loans|
Compared to LoanBuilder, you’re probably looking at higher rates (starting at 1.09), especially if you don’t have great credit, but you’ll have a little more leeway with term lengths. Consider whether the tradeoff is worth it before you commit to anything.
How To Apply For A Credibly Loan
You can begin your Credibly application online on their website. This is essentially a screening process. If you make the cut, you’ll be contacted by a representative who will prompt you to provide the following information:
- Business lease or mortgage agreement
- Picture ID of all owners
- Business tax returns
- Bank statements for the last three months
- Basic personal information including Social Security number
Credibly’s easy qualifications and above-average transparency make it a decent choice for new businesses without a lot of options.
Best for: Businesses looking for equipment financing and transparency
SnapCap flies under the radar compared to some of the other funders on this list, but they still deserve an honorable mention. Like Credibly, their rates are a little higher, particularly for borrowers with bad credit.
|Time in business:||1 year|
On the other hand, you’ll be able to find a lot of the information you’re looking for upfront, with only a little digging around SnapCap’s website.
How To Apply For A SnapCap Loan
You can begin SnapCap’s application process online at their website. The information you need to get started are your business’s revenue, the length of time you’ve been in business, how much money you need, and your credit rating. If you pass this initial screening, you’ll be contacted for additional information.
While they wouldn’t be my first choice for unsecured loans, SnapCap also offers secured financing in the form of equipment loans. This is where they’re most likely to stand out to prospective borrowers.
Best for: Companies that want to avoid hidden fees
As we often caution, the alternative lending industry isn’t known for its transparency. Kabbage is an interesting case study. The fee structure is a bit more complex than that of many of its competitors, which can make it challenging to compare to other products.
|Time in business:||1 year|
Kabbage, however, takes pains to give you the tools necessary to figure out exactly what you’ll owe. Their website comes equipped with handy tools and explanations of their formulas. The big selling point here is that you won’t have to worry about Kabbage springing any surprise administrative fees; everything’s factored into the rates you see.
How To Apply For A Kabbage Loan
Kabbage uses an entirely online application process that you can begin by answering a number of questions on their website. You will also need to give Kabbage read-only access to your business bank accounts. Your rates and fees are decided by algorithm.
Kabbage may not win awards for customer communication, but their easy, automated approach to online funding–as well as their lenient stance toward credit ratings–can make them a good choice new businesses.
Best for: Square customers looking for small loans with low rates
Square, a company known more for point of sale hardware and software, also offers an alternative lending service to its clients. That last bit will probably be a major deciding factor for most of the people reading this: to get a loan from Square Capital you have to already be an existing Square customer.
|Time in business:||N/A|
If you’re a Square customer, you may periodically get funding offers from the company by email. This passive approach to lending won’t suit everyone, but Square does offer some of the lowest short-term loan rates in the business (between 1.1 and 1.16). If you accept the offer, you’ll have up to 18 months to repay the loan. Micropayments are deducted from your daily credit card sales until you’re paid up. You can borrow between $500 and $100,000.
How To Apply For A Square Capital Loan
Unfortunately, the process for determining who is eligible for a Square Capital loan is a bit opaque. Rather than apply at your leisure, Square will, at their leisure, send email notifications to qualifying customers. That means that you may not qualify for funding through Square Capital when you need it.
If you do receive an offer, the process is extremely easy. You decide how much you want from the options offered, then Square will use the information they already have on file to process your application. In some cases they may ask for additional documents. Learn more about rates, fees, and the application process in our guide to Square Capital loans.
It’s best to consider Square Capital as a perk that comes with being a Square customer.
This arrangement may not be for everyone, of course. A lot of the advantages come from being heavily integrated into the Square environment — their credit card processing service makes it easy for them to collect on their debt. You may not be comfortable owing debt to the company that also handles your point of sale.
Alternative lending is a highly competitive market, so you should never feel like you’re locked into one particular funder. Find a lender you’re comfortable working with that offers you fair terms.
Not sure where to start looking? Check out our small business loan comparison.