Balboa Capital Equipment Financing Review
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- Date Established
- 1988
- Location
- Costa Mesa, CA
Pros
- Suited for small businesses
- Suited for mid-sized businesses
Cons
- Fair public reputation
- High interest rates
Overview
Balboa is a California-based alternative business funder offering both short-term working capital and equipment financing. This review focuses on Balboa’s equipment financing products.
Though Balboa is both well-established and flush with cash, the company seems plagued by an unusual number of customer complaints, as well as some troubling legal action in the recent past. While the picture painted doesn’t imply a scam, I’d recommend caution in dealing with Balboa.
We generally recommend shopping around for the best rates before signing anything, if you can. Here’s a look at some of our favorite equipment financers to get you started.
Table of Contents
Services Offered
Balboa Financial offers the following:
- Short-term loans
- Merchant cash advances
- Equipment financing
- Franchise financing
Borrower Qualifications
Here are the prerequisites for getting financing from Balboa Capital:
| Time in business: | 12 months |
| Credit score: | N/A |
| Revenue: | $300,000 per year |
Terms & Fees
The terms for Balboa Capital’s equipment financing offerings look something like this:
| Amount: | Up to $250,000 |
| Term length: | 24 – 72 months |
| Interest rate: | 8% – 38% |
| Down payment: | Unknown |
| Lease agreement: | $1 Buyout; Fair market value; Sale-leaseback; Wrap lease; |
| Additional costs: | Unknown |
| Effective APR: | Learn more |
Balboa offers a number of different leasing arrangements to prospective lessees. The arrangement that best fits your needs will depend on whether you ultimately want to own or temporarily operate the equipment.
Common these days are $1 buyout leases. These are capital leases designed to function as loan alternatives. The lessor finances the equipment, which then serves as collateral, but the ownership of the item transfers to the lessee. You’ll pay off the cost of the equipment over the course of the lease, plus interest, and then formally buy it for $1 at the end of the term.
Balboa does also offer a more traditional FMV lease, however. Sometimes referred to as an operational or “true” lease, in an FMV lease, ownership of the equipment remains with the lessor for the length of the term. At the end, you’re given the option to return it or buy it for an amount determined at the end of the lease. FMV leases tend to carry lower monthly rates, as well as tax incentives, but be aware that the legal definition of what types of arrangements can qualify as operating licenses will soon become stricter.
A sale-leaseback can be thought of a bit like refinancing your house. You sell your equipment to Balboa, who then leases it back to you for a period of time.
Balboa’s wrap lease allows you to add additional equipment to your existing lease by consolidating payments into one monthly bill.
Expect interest rates to vary based on the type of lease you choose, the length of the lease term, and your credit rating.
Application Process
You can begin the application process online. If you have all your necessary documentation in place, you can be approved within a day.
Quickly compare top lending options
| Lender | Borrowing Amount | Term | Interest/Factor Rate | Additional Fees | Next Steps |
|---|---|---|---|---|---|
| $2K - $5M | Varies | As low as 2% | Varies | Visit Site |
US Business Funding | Up to $10 million | Up to 10 years | Starting at 3.5% | Varies | Visit Site |
| $5K - $500K | 24 - 72 months | Starts at 5% | Yes | Compare |
| Up to $250K | 1 - 72 months | Starts at 5.49% | Varies | Compare |
Sales & Advertising Transparency
Balboa Capital’s transparency is above average for the alternative funding industry. The website offers some basic information about the products and the qualifications necessary to receive funding. It also lets you calculate your own estimated payment before submitting your information.
Customer Service & Technical Support
It’s a bit of a crapshoot whether you’ll be able to reach someone who can address your needs and questions. It may have been a technical difficulty at the time, but I was disconnected whenever I navigated the phone menu to the sales division.
User Reviews
Negative Reviews & Complaints
Balboa Capital has an A rating with the BBB, due to regulatory issues the company has since settled with the government (you can read more about it on BBB). There have been 63 customer complaints closed in the last 3 years. Complaints include:
- Billing Issues: Many customers appeared to encounter billing issues ranging from unforeseen interest to leases that automatically renewed. While the company resolved many of these complaints, the sheer quantity of them raises red flags.
- Unclear Terms: A number of customers reported that they either didn’t understand the terms of the agreement or the terms had changed over the course of the loan/lease.
- Surprise Credit Checks: A few customers reported their credit was checked without their permission.
Positive Reviews & Testimonials
Balboa Capital rates a 9.6 out of 10 on Trustpilot. The company’s happier customers liked:
- Streamlined Process: Users appreciated how quickly and smoothly the application process went.
- Customer Service: Many customers found Balboa’s staff to be professional and helpful.
- Deep Pockets: Balboa’s been around for a while and has the capacity to finance large amounts of money.
Final Verdict
Balboa’s transparency and diverse financing options are strong points in its favor, but the company suffers from an alarming number of customer complaints, particularly related to billing. Though the company seems pretty responsive about addressing these complaints, I’d still recommend exercising caution before signing a lease with this lender.
Didn’t find what you were looking for here? Our equipment financer comparison can help you find some alternatives.
Quickly compare top lending options
| Lender | Borrowing Amount | Term | Interest/Factor Rate | Additional Fees | Next Steps |
|---|---|---|---|---|---|
| $2K - $5M | Varies | As low as 2% | Varies | Visit Site |
US Business Funding | Up to $10 million | Up to 10 years | Starting at 3.5% | Varies | Visit Site |
| $5K - $500K | 24 - 72 months | Starts at 5% | Yes | Compare |
| Up to $250K | 1 - 72 months | Starts at 5.49% | Varies | Compare |
Chris Motola
Finance Writer at Merchant Maverick
Chris Motola is a writer, programmer, game designer, and product of NY. These days he's mostly writing about financial products, but in a past life he wrote about health care and business. He's a graduate of the University of Central Florida.
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Stay away!!!!!!! This loan was paid off three years ago and now the are sending bills and collection notices. They have ruined my credit with their bait and switch business tactics!!! Please please choose any other company. Don’t take my word. Look them up on the internet. They have class action lawsuits against st them and The state controller have gone after them also. I don’t know why the state has not shut them down! Please STAY AWAY!!
Organization Name: Roberts Towing & Repair LLC
Sean Quintero was very polite, helpful and ready to answer any and all questions we had, we appreciate all he did for us. When ever we need equipment financing in the future we will definitely use Balboa Capital. it was a pleasure working with Sean.
This comment refers to an earlier version of this review and may be outdated.