Credibility Capital Review
- January 8, 2018
- Posted by: Jeff Gitlen
- Category: Small Business Loans
If you’re a small business owner looking for a loan, one of the options that might be available to you is a loan product from Credibility Capital. An online lender founded in 2013 and based in New York, Credibility Capital offers short-term business loans to borrowers who are typically low-risk.
Who is Credibility Capital?
The company was started by Brett Baris and Mark Rambler. Brett Baris, a venture capital investor by background, and Mark Rambler, a lawyer by background who worked at a large credit fund, bring a wealth of skills and experience to the table. With Ivy League educations and strong resumes, Baris and Rambler have taken the investor-funded loan concept to the small business world.
Investors at Credibility Capital include banks, hedge funds, families, and even insurance companies that agree to fund small business loans. The company is partnered with a long list of recognized leaders in the financial services industry, such as Dun & Bradstreet, FIS Global, LoanStar, Kentucky Bankers Association, and Homeowners of America.
Who is Eligible for a Loan?
Credibility Capital loans aren’t for weak borrowers, start-ups, or struggling businesses. To apply, your business needs to have been around for at least 18 months – and you need to be currently generating revenue. You also need a personal credit rating of at least 650, which excludes subprime borrowers and those with ‘fair’ credit. Credibility Capital is a prime lender, meaning it’s only interested in borrowers with good credit and solid payment histories.
While all of that sounds pretty traditional, the company does have a twist in its underwriting process that can help businesses weak in one area but strong in others. If you hold liability insurance, offer health or retirement benefits to your employees, or have a defined corporate structure, for instance, you might be given some ‘extra points’ toward approval. This holistic approach, in which the company looks at the entirety of a business's health instead of just personal and commercial credit, can help some businesses who would possibly fail traditional underwriting but are still strong prospects.
Other requirements for approval include no personal or commercial bankruptcy in the last five years, and a UCC-1 filing, which basically means the loan will be secured by the business itself. The UCC-1 doesn’t put a lien on the property; it merely means that Credibility Capital will have a stake in your assets in case you default on the loan. If you’re the sole owner, you’ll need to put up a personal guarantee on the loan as well, which puts your personal assets at risk if you default.
What Are the Loans Like?
The Credibility Capital loan product is a 1, 2, or 3-year loan, and you can apply for any amount between $10,000 and $350,000. The loans are fully amortizing, which means each monthly payment will include both principal and interest – ensuring the loan is paid off at the end of the term instead of requiring a larger payment at the end.
Once you’re approved, the loan proceeds can be in your account in as little as seven business days. Interest rates currently start at 7.99 percent APR with no prepayment fees, so if your business starts substantially increasing profits you can pay back the loan faster with no additional penalties.
The company offers a term loan calculator that allows you to see exactly what you’d be paying per month and in interest if you were to take out a loan with them. On a $20,000 loan, for instance, an average APR is 12.82 percent on a 36-month term. With an origination fee of $500, your projected monthly payment would be $682.15, automatically deducted from your account.
What’s the Downside to Credibility Capital?
There are a few drawbacks to borrowing with Credibility Capital.
The need for a UCC-1 filing can also put off some borrowers who don’t want to leverage both their business and their personal assets for one loan. For those with strong business credit but bad personal credit, the company’s loan product might still be out of reach.
The loan’s short terms can also spell trouble for some businesses if they’re looking to have long-term credit or very low monthly payments. Since Credibility Capital only deals in short-term loans, it’s critical that you only borrow what you absolutely need – and can afford the higher payments on.
If you’re denied a loan with Credibility Capital, however, there’s still hope. After a denial, the company makes its vast network of solid, vetted partners available to you, and recommends other lenders that might be more willing to lend to you and your business.
If you have good credit, a healthy business, and a penchant for being well-informed about your business finances, Credibility Capital may be just the lender for your business.
Is Credibility Capital a Scam?
The short answer is no. Credibility Capital is not a scam. In fact, TrustPilot gives Credibility Capital a 5-star, 9.1 out of 10 rating, with 88 percent of consumers rating it “Excellent” as a financial services company. The Better Business Bureau rates it as an A+ business, with 94 percent of consumer reviews being highly positive about their experience with the company.
With all of this positive publicity, you might be asking how you can get a loan from Credibility Capital for your business.