Growing a startup means either acquiring funding or bootstrapping your business. If you're interested in rapid growth, outside funding may be your only option. Angel investors, venture capitalists, and investments from friends and family are all possible methods for funding for your startup. There are also alternative lenders that specialize in startup loans. These lenders have low loan requirements and can grant your company the capital it needs.
After much research and analysis, we recommend SBG Funding as the best alternative lender for startup loans in 2019. To understand how we selected our best picks, as well as a comprehensive list of alternative lenders, visit our best picks page.
Why SBG Funding?
While SBG Funding doesn't have a startup-specific loan, its loan requirements are in line with what new businesses can qualify for. You only need to have been in business six months and have modest monthly revenue and credit scores. Here's a breakdown of why SBG Funding is one of our best picks.
SBG Funding has some of the most relaxed qualifications and requirements of any company we reviewed. It's willing to partner with new and growing businesses, and it can provide ongoing financial support. These are the criteria to partner with SBG Funding:
- You have been in business for at least six months.
- Your credit score is over 500.
- Your business makes at least $150,000 in annual revenue.
These qualifications allow businesses of all sizes to get the funding they need. While these are considered the baseline requirements, SBG Funding can likely work with you on finding the right financing if your business doesn't quite meet these thresholds. In addition to these qualifications, SBG Funding will likely want to examine some basic bank statements and other financial documentation to verify your business's income and time in operation.
These qualifications are for SBG Funding's small business loan product. Its lines of credit, equipment financing and invoice financing qualifications vary but are still lenient compared to other lenders we evaluated. Depending on what your business needs, you can qualify for up to $1 million in funding.
SBG Funding works with most industries. Some alternative lenders we reviewed don't work with certain types of businesses or certain industries.
SBG Funding has flexible rates and terms for small businesses and startups. Terms range from six months to five years, meaning SBG Funding supports both short- and long-term funding. Generally, companies either offer short- or long-term funding options, not both.
SBG Funding's rates range from 5% to 35%, depending on your business's financial history. This flexibility mirrors SBG's terms: Shorter terms will likely have higher rates. When we spoke to SBG loan representatives, they told us businesses typically get funded for 7% to 12% on a quick-funding option and 4% to 6% on a longer review process. Keep in mind that rates vary widely based on your business's financial situation.
You can pay back your loan on a weekly or monthly basis. Payment can be deducted directly from your business's checking account, ensuring that you make payments on time and don't have to worry about transferring money at the right time. You can pay your loan off at any point, as SBG Funding doesn't have any prepayment penalties. However, it does charge an origination fee. This amount varies depending on your loan agreement, so if you're concerned about it, ask your loan representative upfront.
SBG Funding doesn't require additional collateral to secure a loan. Many alternative lenders we evaluated require business or personal assets to get financing. With SBG Funding, business owners can get approved without risking business or personal assets.
In addition to small business loans, SBG Funding provides lines of credit, invoice financing and equipment financing at varying terms and lengths. For the purposes of this review, we focused on small business loans, because they have the most favorable qualifications for startups. Depending on your business's financial situation, however, it might be worth investigating SBG Funding's other offerings. Requirements are slightly different, but the lines of credit and invoice financing options require businesses to have been established for six months to secure a loan.
Application and Approval Process
To begin the qualification process with SBG Funding, you fill out a one-page online application. This application asks for basic business information, like your business address, name, contact information and revenue. You also must provide your federal tax ID, date of birth and your business's legal entity type.
SBG's application requires some financial information as well. You'll have to disclose yearly revenue, average daily bank balance, monthly credit card sales, intended use of funds and how much money you're requesting. SBG Funding doesn't require a lot of extra documentation, but interested business owners will have to provide the last three months' bank statements.
Once you've applied online or by phone with an SBG loan specialist, a representative will contact you and discuss financing options. This is a good way to get an understanding of what you qualify for without committing to a loan with the company. You'll generally get a decision within 12 to 48 hours, with funding to follow shortly. This application process is long compared to other companies we reviewed.
Customer Service and Reputation
We posed as small business owners and called SBG Funding to learn more about the company's small business loans. In all instances, SBG lenders were polite and answered our questions without pushing for a sale. They gave us a good look into the alternative lending industry and helped us understand all aspects of the company's loan process.
Many alternative lenders we spoke to were more concerned with selling their company than helping us understand more about the small business loan industry. Overall, we were pleased with SBG Funding's customer service and its commitment to helping us learn more about the process.
SBG Funding also has a solid online reputation, earning an A and accreditation with the Better Business Bureau. As of March 2019, there were no customer complaints on the page, but there were also no reviews, positive or negative.
SBG Funding only provides loans to businesses with a brick-and-mortar location. If you're running an online business, you can't get funding from it, because SBG Funding requires a business address to provide loans.
Ready to choose an alternative lender? Here's a breakdown of our complete coverage:
- The Best Alternative Lenders for Businesses 2019
- Best Alternative Lender for Lines of Credit
- Best Alternative Lender for Merchant Cash Advances
- Best Alternative Lender for Bad Credit Loans
- Best Alternative Lender for Equipment Loans
- Best Alternative Lender for Working Capital Loans
Editor's note: Trying to find a business loan that's right for you? Fill in the questionnaire below, and you will be contacted by our partner alternative lenders, who will help you find the right loan for you.