The 8 Best Square Capital Alternatives
Square Capital (see our review) loans are, understandably, beloved by most Square users.
For the most part, Square has streamlined the typically drawn out and inconvenient loan process. With a Square Capital loan, you don’t have to spend time filling out long applications, gathering various documents, and remembering to write checks. It’s no wonder Square Capital is one of Merchant Maverick’s highest-rated short-term lenders.
However, Square Capital is not without its flaws. Some borrowers are frustrated that Square does not offer capital when they need it; it can also be inconsistent about when it offers the option to refinance with higher borrowing amounts. In short, because you typically have to wait for Square to offer the capital to you, the service can be undependable.
If you need capital, but Square Capital isn’t coming through for you, you may still have other options. The following eight lenders have similar borrower qualifications and offer similar products to Square Capital loans.
|Loan or line of credit with a fast application process||OnDeck|
|Loans with a fixed rate||LoanBuilder|
|Loan or line of credit for working capital or business growth needs||StreetShares|
|Loans for working capital, inventory, or other short-term needs||Breakout Capital|
|Invoice factoring, line of credit, or term loan for consistent cash flow||BlueVine|
|Line of credit for working capital or business growth||Kabbage|
|Fixed-rate financing for cash flow or working capital||Fora Financial|
|Loans for working capital or business growth||Credibly|
Table of Contents
Small- to medium-sized businesses looking for a loan or line of credit with a fast application process.
- Short-term loans
- Lines of credit
Founded in 2007, OnDeck was one of the first lenders to use technology to offer fast lending decisions. Even today, OnDeck is one of the fastest lenders available — many applicants will have money in their bank accounts within 24 or 48 hours of applying.
OnDeck vs. Square Capital
One major advantage that OnDeck has over Square Capital is its borrowing limits. With Square Capital, maximum borrowing limits are $250,000. With an OnDeck term loan, you can receive as much as $500,000. You may also receive repayment terms up to 36 months with an OnDeck loan, compared to a maximum of 18 months with Square Capital’s product.
OnDeck also offers lines of credit, a financial product not offered through Square Capital. With an OnDeck line of credit, you could receive up to $100,000 repaid through fixed weekly payments.
How To Apply For An OnDeck Loan
Simply check your rate via OnDeck’s online application form. If you like the rates they’re offering, you may have to submit additional documents for verification or agree to a hard check on your credit. Typically, the loan can be fully approved and funded within one to two days.
OnDeck’s loans are perfect for small or medium-sized businesses that need funding quickly. With two types of funding — installment loans and lines of credit — most businesses will find something that suits their needs.
Businesses looking for an easy-to-understand business loan with one fixed fee.
- Installment loans
LoanBuilder offers installment loans that can be customized to fit the financial needs of your business. The LoanBuilder Configurator allows you to adjust your repayment terms and borrowing amount to find the most affordable payment. LoanBuilder also offers simple, transparent terms with one fixed fee, no origination fees, and no hidden charges.
LoanBuilder vs. Square Capital
If you’re looking to borrow more than the $250,000 maximum offered through Square Capital, LoanBuilder has you covered. Through this lender, you may be eligible for up to $500,000 to fund your business. LoanBuilder’s fixed weekly payment schedule may also work better for your business as opposed to Square Capital’s daily withdrawals. A potential drawback, however, is that LoanBuilder offers maximum repayment terms of just one year, while Square Capital’s small business loans can be repaid over a period of up to 18 months.
How To Apply For A LoanBuilder Loan
Applying for a LoanBuilder loan is simple. Just fill out the online questionnaire to receive one or more loan offers. Checking your eligibility does not affect your credit score, although a hard pull will be performed if you proceed with the loan process. As you move through the process, you’ll be connected with a Business Funding Expert, who will let you know what documentation is needed and additional steps you need to take to receive your loan. Funding can be as soon as the next business day, although most borrowers will receive funds about one week after applying.
LoanBuilder offers loans with flexible terms and transparent fees for businesses that need extra funds to use as working capital or for other business expenses.
Small- to medium-sized businesses looking for a loan or line of credit to be used for working capital or business growth needs.
- Installment loans
- Lines of credit
- Contract financing
StreetShares is a peer-to-peer lender that specializes in small business loans. Although the company was originally founded by a veteran to help other veterans, StreetShares works with non-veteran owned businesses as well.
StreetShares vs. Square Capital
One of the obvious advantages of StreetShares is the variety of financial products the lender offers. In addition to traditional installment loans, StreetShares offers flexible lines of credit and contract financing (a service similar to invoice factoring) that allows you to receive an advance on your unpaid invoices. There’s no limit on contract sizes, which could be useful to your business if you need more than the $250,000 maximum borrowing limit offered through Square Capital.
Lines of credit and installment loans through StreetShares have maximum borrowing limits of $250,000. What sets these apart from Square Capital’s offering is that repayment terms max out at 36 months, giving you more time to pay off your loan.
How To Apply For A StreetShares Loan
To check your eligibility, you will need to fill out a quick form on StreetShares’ website. If you’re qualified, you can go on to fill out a full application. When done, you will be presented with loan offers. The time from application to funding is generally less than a week.
StreetShares is a great choice for small and medium-sized businesses. In addition to relatively low borrower qualifications, this lender’s loans are flexible and easy to get.
4. Breakout Capital
Small businesses in need of short-term loans to be used for working capital, inventory purchasing, or other short-term needs.
- Short-term loans
Breakout Capital is a short-term lender that focuses on offering specialized and fair funding to business owners. In general, the company offers short-term loans. However, Breakout’s loans tend to be more flexible than others on this list — depending on the strength and needs of your business, you may have a variety of payment schedules from which to choose. And because the company treats their loans a bit like lines of credit, you may be able to borrow additional capital if needed.
Breakout Capital vs. Square Capital
The flexibility of Breakout Capital’s loans may work better for your business than Square Capital’s daily repayment schedule. If eligible, you can choose from daily, weekly, or monthly repayments that work best for you. Breakout Capital also has longer repayment terms than Square Capital, maxing out at 24 months. Another advantage of working with Breakout Capital is that you can receive prepayment rebates for paying your loan off early, which isn’t a feature offered by Square Capital.
How To Apply For Breakout Capital
You can check your eligibility by filling out an online form or calling to talk to customer service. You’ll then have to provide some basic information and a few documents. Breakout Capital will let you know if you qualify for one of their loans. The cool thing about Breakout Capital is that they will also let you know if one of their lending partners has a better offer for you.
Breakout Capital offers fair and flexible financial products tailored to the needs of small business owners.
Small businesses looking for invoice factoring or a line of credit for consistent cash flow.
- Lines of credit
- Term loans
- Invoice factoring
BlueVine is known for revolutionizing and streamlining invoice factoring. If you don’t invoice your customers, however, BlueVine offers traditional lines of credit. As their borrower qualifications are lower than those of many other lines of credit on this list, BlueVine may be a good choice for very young businesses.
BlueVine vs. Square Capital
If unpaid invoices are causing cash flow issues in your business, BlueVine’s invoice factoring may be a good choice for you. BlueVine will advance up to 90% of your unpaid invoices, giving you access to up to $5 million for your business. Fast approvals, simple weekly fees, and no long-term contracts are all advantages to using BlueVine for invoice factoring.
If you don’t have unpaid invoices, don’t worry — you can apply for a term loan or line of credit. Both products have borrowing limits up to $250,000 and offer repayment terms that are more flexible than the daily payments taken by Square Capital. With a line of credit from BlueVine, you can choose a weekly or monthly repayment schedule. BlueVine’s term loans are repaid through fixed weekly payments.
One thing to note is that BlueVine’s lines of credit and installment loans both come with maximum repayment terms of 12 months, which fall short of Square Capital’s maximum terms of 18 months.
How To Apply For BlueVine
To apply, all you have to do is fill out an online application and provide some documents for verification. Typically, final approval takes 24 hours or less, after which you can start selling invoices or drawing from your credit line.
BlueVine’s line of credit work for B2C businesses that need a source of cash, but have not yet been in business for a year. If you run a B2B business, BlueVine’s invoice factoring services are an easy and flexible way to get fast cash, even if you have slow-paying customers.
Businesses looking for a line of credit for working capital or business growth needs.
- Lines of credit
Kabbage is a small business lender that offers lines of credit. Similar to OnDeck, Kabbage uses technology to make fast lending decisions. However, Kabbage may be even faster; borrowers can often check their eligibility and start drawing from their credit line as soon as the short online application is complete.
With fees that range from 1.5% – 12% per month (front-loaded, so you have to pay the bulk of the interest at the beginning of your loan), Kabbage’s lines of credit can be a little pricey. Nonetheless, the trade-off is often worth it for merchants who need an easy way to access cash.
Kabbage vs. Square Capital
Although Kabbage might be too expensive for some borrowers, Kabbage offers many advantages to small business owners, including relaxed borrower requirements, an easy application process, and fast approvals. If you qualify for a Kabbage line of credit, you could have access to your funds in just minutes.
You could be approved for a line of credit up to $250,000 if you meet Kabbage’s requirements. One of the best things about Kabbage is that your personal and business credit profiles aren’t considered when approving your application. Instead, the lender looks at the performance of your business when determining whether to approve your loan and setting your credit limit.
Through Kabbage, you can receive repayment terms of 6, 12, or 18 months based on the amount you draw. Payments are made monthly, which may be a better option for your business over Square Capital’s daily repayments. You can even repay your loan early and save money on fees — an option not available through Square Capital.
How To Apply For A Kabbage Line Of Credit
Simply fill out an application on Kabbage’s website, or download the app and apply on your mobile device. Kabbage will request read-only access to your bank accounts and payment services like Square. When the application is complete, Kabbage will let you know how much you’re approved for and you can start drawing from your line immediately.
Although Kabbage’s loans can get expensive quickly, it’s an excellent option for businesses that need a dependable, easy-to-access source of additional cash.
7. Fora Financial
Small businesses looking for a merchant cash advance or short-term loan for consistent cash flow or working capital.
- Merchant cash advances
- Short-term loans
Fora Financial is a small business funder that offers merchant cash advances and short-term loans to eligible merchants. Although merchant cash advances often have a reputation for being non-transparent and predatory, Fora Financial dispels this stereotype by offering transparent customer service and relatively low rates (in comparison to others in the industry).
Fora Financial vs. Square Capital
With Fora Financial’s small business loans and merchant cash advances, qualified borrowers can receive up to $500,000 to use for any business purpose. A standout feature of Fora Financial is its quick application and approval process. Within 24 hours, you can find out if your application has been approved. Once approved, you can have funds hit your account in as little as 72 hours.
Borrower requirements are minimal. To receive a small business loan, at least 6 months in business, $12,000 in gross sales, and no open bankruptcies are the minimum requirements set by the lender. For MCAs, a time in business of at least 6 months, no open bankruptcies, and $5,000 in credit card sales are the minimum requirements to qualify.
How To Apply For Funding From Fora Financial
Fill out a contact form via the website, and somebody from Fora Financial will give you a call to discuss loan products, get information about your business, and give you a quote. If you like the numbers you’re quoted, you can continue the process by sending the requested documentation. The time from application to funding typically takes about four days or less.
Don’t let the merchant cash advance label scare you (after all, Square used to offer merchant cash advances as well). Fora Financial offers loans and advances that may be helpful for businesses in need of cash, and low borrower qualifications mean this solution may work for many small businesses.
Businesses in need of a short-term loan or installment loan for working capital or business growth projects.
- Short-term loans
- Installment loans
- Merchant cash advances
According to its website, Credibly’s mission is to provide the “right-sized capital” to grow your business. To do so, the lender offers short-term loans, installment loans, and merchant cash advances to eligible borrowers.
Credibly vs. Square Capital
If you need more than the $250,000 offered through Square Capital, Credibly may be able to help you out. The lender’s cash advances and working capital loans are available up to $400,000. Credibly’s long-term business expansion loans are only available in amounts up to $250,000. However, the latter loans come with longer terms than the lender’s other products, giving you up to 24 months to repay your loan.
Prequalifying for a loan through Credibly is fast and easy. In some instances, you may even be approved and funded the same day. The borrower requirements, rates, and terms vary by financial product. However, Credibly has relaxed borrower qualifications, few paperwork requirements, and flexible repayment schedules to best suit the needs of your business.
How To Apply For A Credibly Loan
You can check your eligibility in a few minutes using Credibly’s online application. If you’re approved, you’ll need to submit business documents for verification purposes. A full application generally takes less than a week to be funded.
Credibly’s loans will work for small businesses that need capital for business growth projects.
What Type of Loan is Best for Me?
You may notice that the above lenders offer a variety of products: lines of credit, installment loans, short-term loans, and merchant cash advances. The right loan for your business will depend on what you’re eligible for and why you need the funds.
Installment loans, short-term loans, and merchant cash advances are sent to you in one lump sum. If you need additional capital after receiving the funds, you will need to apply for another loan or advance. These loans are best used for working capital or business growth projects.
If you get a line of credit, you will be able to draw up to your maximum borrowing amount at any time without reapplying. For this reason, lines of credit are especially helpful for solving cash-flow problems or capitalizing on time-sensitive business growth opportunities.
Read on for more information about each of these products:
Regardless of which you choose, these lenders differ from Square Capital in that you take the initiative to apply for the capital; you do not have to wait for the lender to extend an offer. Square Capital offers an inexpensive, convenient product, but if it’s not right for your business, these eight lenders may be the next best thing.