Founded in 2010, Credibly is an innovative online commercial lender that specializes in serving the financing needs of small and mid-sized businesses (SMBs). Credibly empowers potential borrowers to earn pre-approval in mere minutes, and the company’s in-house team of business lending specialists is always available to help guide customers to the right funding options and loan amounts for their needs.
Credibly has earned accolades for its simplified application process and its incredibly fast delivery of loan proceeds. The company is also a hit with credit-challenged borrowers and newer businesses, both of whom often struggle to find affordable financing options through more traditional lenders.
Let’s break down the Credibly service model and see what it has to offer business borrowers.
Credibly was founded in 2010. It is headquartered in the Detroit suburb of Southfield, Michigan. The company also maintains physical offices in New York City and Scottsdale, Arizona.
In 2013, Credibly introduced a proprietary tool it calls the ReCap scoring model, which looks beyond standard metrics to analyze nontraditional but impactful factors that contribute to a company’s financial health. This innovation drives Credibly’s business model, as it continues to focus primarily on borrowers who struggle to find loans and financing options through banks.
As of 2020, Credibly has provided financing to more than 19,000 SMBs throughout the United States. Since its founding, Credibly has issued over $1 billion in loans.
Loan Types and Financing Options
Credibly offers seven main types of SMB financing solutions:
- Working capital loans: SMBs finance their day-to-day operations with working capital, which represents the difference between the value of a company’s assets and its total amount of debts and liabilities. Short-term working capital loans help businesses avoid difficult decisions about how to use limited resources when facing a cash crunch.
- Business expansion loans: Established, growing SMBs in need of capital to finance their expansion plans can use these longer-terms loans to secure the money they require.
- Business lines of credit: A business line of credit is a type of revolving credit, which remains available (up to your credit limit) on an ongoing basis. These are ideal for businesses with an ongoing need to borrow a modest amount of money.
- SBA loans: SBA loans are backed by the U.S. Small Business Administration, a federal government agency that works to reduce risk for lenders in its partner network. Borrowers can use the proceeds of SBA loans for working capital, equipment purchases, debt consolidation, and the acquisition of commercial real estate.
- Merchant cash advances: Retailers can use this innovative financial product as an alternative to a traditional loan. A merchant cash advance forwards a sum of money to a business owner. The lender then claims a small, set percentage of the merchant’s daily credit card transactions until the money has been paid back with interest.
- Equipment financing: SMBs that need to finance the purchase of a specialized piece of equipment or machinery. These loans enable businesses to get the tools and resources they need today without overcommitting a great deal of capital.
- Invoice factoring: Invoice factoring is another innovative loan option, in which a borrower “sells” its unpaid invoices to a lender. The lender forwards the value of the invoices to the borrower, minus fees and factoring charges, and collects the account receivable from the debtor itself.
As of October 2020, Credibly is also supporting several emergency loan programs as part of its COVID-19 response. These include Paycheck Protection Program (PPP) loans, disaster loans, and additional resources for businesses that have been negatively impacted by the novel coronavirus pandemic.
The following information about Credibly’s loan terms and borrowing limits was sourced from the company’s website in October 2020:
- Working capital loans offer financing of up to $400,000 with term lengths of 6 to 18 months and annual interest rates starting at 15%.
- Business expansion loans provide up to $250,000 repayable over 18 months or 24 months, with interest rates starting at 9.99% plus a one-time 2.5% origination fee.
- Business lines of credit are available with limits of up to $100,000 or more, with interest rates starting at 4.88%.
- SBA loans deliver up to $150,000 in working capital and a maximum of $20 million for commercial mortgages. Interest rates vary, depending on the purpose of the loan and its repayment term.
- The maximum amount available with a merchant cash advance is $400,000, repayable over 3 months to 18 months at 15% interest.
- Credibly does not specify borrowing limits for equipment financing solutions on its website.
- Invoice factoring financing limits depend on the value of the invoices you offer. Credibly will forward up to 95% of the invoice’s value, minus fees that are calculated as a percentage of the proceeds.
Credibility’s Loan Qualification and Eligibility Guidelines
Qualification standards and eligibility guidelines vary, depending on the type of loan you’re seeking. That said, Credibly specializes in working with SMBs and borrowers who have challenges related to their credit ratings. The following general criteria apply for most loan types:
- In business for at least six months
- $15,000 or more in average monthly bank account deposits
- Credit scores of 500 and up
- No personal bankruptcy declarations in the past two years
Credibly will perform what is known as a “hard credit pull,” meaning that it will examine your borrowing history in detail. This type of inquiry temporarily reduces your credit score, so keep that in mind before you submit your formal loan application. Prequalifying for a Credibly loan will not affect your credit score, so you don’t have to worry if you just want to shop around.
You should also expect to provide the following forms of documentation to Credibly in support of your loan application:
- A copy of your government-issued photo ID
- A copy of your commercial mortgage or business lease
- Your last three business bank statements
- Your company’s most recent tax return
- Your Social Security Number
Additional documentation may be requested, depending on what type of loan you’re considering.
Pros and Cons of Credibly
There’s a lot to like about Credibly as a business lender. Key strengths and advantages include:
- A fast, efficient, streamlined application and approval process
- Fast funding in as little as 24 hours
- Capital is available for a wide range of purposes
- Excellent borrowing options for credit-challenged customers
- Extensive options for startups, new businesses, and growing businesses
- Easy, automatic prepayment structures
- No penalties for early loan repayments
Despite these strengths, there are also a couple of drawbacks for potential customers to keep in mind:
- Most Credibly loans require a “hard pull” of your credit data, which will cause a temporary dip in your score
- Blanket business liens are required in order to finalize many Credibly loans, which could put your company at risk if you default on your payments
- Many loans require daily or weekly payments
What Others Are Saying about Credibly
Credibly has been accredited by the Better Business Bureau (BBB) since 2010. As of October 2020, the company has a stellar A+ rating with the BBB, which is the agency’s highest grade.
Trustpilot shows almost 540 user-generated reviews of Credibly as of October 2020, with an excellent average score of 4.1 out of 5. Of those reviews, 80% gave Credibly 5 out of 5 and 86% scored the company 4 out of 5 or higher.
The Bottom Line
Credibly benefits from a strong customer satisfaction track record and offers a broad range of flexible, competitive borrowing options. While you may need to put up a lien to secure your loan, Credibly does excel at providing financing to credit-challenged SMBs and other borrowers who struggle to get loans from traditional lenders.