- Prepayment discount
- Relaxed credit score requirements
- Transparent terms and fees
- Moderate factor rate
- Some additional fees
- High origination fee
QuarterSpot is an online lender that offers a short-term loan product. Founded in 2013, the company has yet to hit the same level of name recognition as some of its competitors like OnDeck and Kabbage. Regardless, QuarterSpot stands out from the competition for a couple of different reasons.
The merchants who would benefit the most from using QuarterSpot are those who plan on repaying the loan before their term is up. Unlike many of its competitors, QuarterSpot’s loans are fully amortizing, which means you can save money on the cost of the loan by repaying early.
This lender also offers the option of repaying on a weekly basis, an arrangement many merchants find easier to handle than the standard daily repayments common in the industry.
I would not recommend QuarterSpot for every eligible business, because the capital is very expensive. However, because QuarterSpot has eliminated some of the less-than-stellar characteristics of borrowing money for such a short period of time, this lender is worth considering if you don’t have access to less expensive forms of debt.
Read on for the details!
Table of Contents
QuarterSpot offers the following financial products:
These are the qualifications for getting funding from QuarterSpot:
|Time in business:||12 months|
Additionally, you must meet the following criteria:
- An average daily balance greater or equal to $2,000.
- An average of 10 or more revenue-producing deposits per month.
- No bankruptcies within the last two years.
- $100,000 or less in tax liens.
- A maximum of two high-frequency loans if you qualify.
QuarterSpot cannot currently lend to businesses located in North Dakota, Rhode Island, South Dakota, or Vermont. U.S. Territories (Puerto Rico, Guam, U.S. Virgin Islands, Northern Mariana Islands) are also prohibited.
Terms & Fees
There are the rates and fees for QuarterSpot’s loans:
|Borrowing amount:||$5K – $250,000|
|Term length:||6, 9, 12, 15, or 18 months|
|Flat fee:||x1.1 – x1.4|
|Origination fee:||1% – 4%|
|Effective APR:||Learn more|
Short-term loans work a little differently than what you might be used to. QuarterSpot charges a flat fee instead of interest. That is, the amount you have to repay is determined ahead of time. For example, if you are borrowing $20K, and you have a flat fee of 1.2, you will have to repay $24K ($20,000 x 1.2 = $24,000). Repayments are made on a daily or weekly basis and are directly debited from your business bank account.
In other words, for ever dollar borrowed, you’ll have to repay between $1.10 and $1.40.
While QuarterSpot’s loans are expensive, you do have the chance to save on fees. I know I said above that QuarterSpot charges a flat fee, and that’s true, but they also amortize their fee on a daily basis. So, unlike many of this lender’s peers, the earlier you repay, the more money you save. Here’s an example of how that works.
QuarterSpot’s loans are unsecured, so they don’t require collateral, but they do have the option of going after your business assets if you default on your loan.
QuarterSpot’s application process is fairly standard: you begin the process by applying via the website. You’ll be required to submit basic information about yourself and your business. At the very least, you’ll have to submit your social security number and your three most recent business bank statements, though the underwriter might require more documentation in special circumstances.
QuarterSpot only performs a soft pull on your credit, which will not have an effect on your score.
When you’ve submitted all the necessary documentation, your information will be sent to the underwriting department. Your underwriter will look over your information and make the final decision regarding terms and fees. A loan offer should arrive within 24 hours. You’ll be presented with a link to an approval form that will allow you to make adjustments to elements like your term length, the amount you’re borrowing (within approved parameters), and payment frequency. Once you’re satisfied with the terms, you can review the legal and formal terms of the loan and sign the document electronically. You’ll then set up automatic debiting from your business account.
The time from application to funding normally takes two or three days, largely depending upon how long it takes for you to submit the necessary documentation.
Sales & Advertising Transparency
QuarterSpot provides a lot of the information necessary to understand their product, but there’s still a lot missing. I’d like to see some more information regarding the cost of their loans, primarily a more overt disclosure of the fees involved in the process.
Customer Service & Technical Support
Customer service is available by phone, email, or through their website. You can also interact with QuarterSpot on Twitter. Most reviewers claim that the customer service is easy to get a hold of, helpful, and transparent.
Negative Reviews & Complaints
QuarterSpot has a presence on the Better Business Bureau website. Currently, however, they’re unrated. Otherwise, the lender has very few reviews across the web, though the few they have are primarily positive. Some criticisms of the product include:
- High Cost Of Borrowing: As is the case with alternative lenders more broadly, you’ll be spending more on your loan than you would by going through a traditional route like a bank.
- Restrictions On Industries: There are a fairly large number of industries not served by QuarterSpot (see above).
- Personal Guarantee: Though common with alternative lenders, you should be aware that a personal guarantee allows the lender to not just come after your business’s assets, but your own personal assets should you default.
Positive Reviews & Testimonials
Customer and professional reviews of QuarterSpot tend to be positive, though their customer review footprint is a lot smaller than those of many other alternative lenders. They currently rate 8.2 out of 10 on TrustPilot with 19 reviews on file. Some of the things reviewers like best include:
- Customer Service: Customers seem to generally find QuarterSpot’s customer service to be friendly and responsive.
- Prepayment Forgiveness Policy: One of the biggest selling points for QuarterSpot is their prepayment policy, which not only doesn’t penalize you for paying off your loan early, but gives you a discount for doing so.
- Fast Time To Funding: If you need money fast, QuarterSpot can get it to you within a couple days.
Alternative loans are a high-risk prospect for businesses, let’s make no mistake. Because the loans are so expensive and have to be repaid so quickly, QuarterSpot will not work for all merchants. However, because QuarterSpot offers the opportunity to save by repaying early, they’re worth considering if you need capital but don’t have access to less expensive financing options.
Chances are, QuarterSpot isn’t your only option, though. Curious about your other options? Check out our loan alternatives.