Backd vs. Bluevine: Which small business lender is right for you?
Key takeaways
- Backd and Bluevine both offer fast online business loans
- Choose Backd for larger loans
- Choose Bluevine for short-term expenses
When your business needs money quickly, it’s natural to turn to online lenders that make applying easy. Backd and Bluevine are two popular online lenders for businesses to consider. Backd excels at offering large loans, while Bluevine is a solid choice for companies needing access to a business line of credit.
Backd vs. Bluevine at a glance
While Backd and Bluevine are both online business lenders, they serve different markets.
Backd offers much larger loans and has a wider variety of loan products. It also has less stringent eligibility requirements but higher starting interest rates, so you’ll likely pay more if you use a Backd loan.
Bluevine only offers a line of credit up to $250,000 compared to Backd’s maximum loan of $2 million. That said, Bluevine’s line of credit has a lower starting interest rate, which may make borrowing more affordable.
| Backd | Bluevine | |
|---|---|---|
| Bankrate Score | 4.6 | 4.4 |
| Best for | Large loan limits | Lines of credit with lower rates |
| Number of loan products | 3 | 1 |
| Loan amounts | $10,000 to $2 million | Up to $250,000 |
| Interest rates | 1.10 factor rates | 18% simple interest | Starts at 6.20% simple interest |
| Term lengths | 3 to 16 months | 6 or 12 months |
| Personal credit score | 600 | 625 |
| Minimum time in business | 1 year | 2 years |
| Minimum business revenue | $100,000 | $480,000 |
Backd business loans
Backd offers three different types of business lending: a working capital loan, buy now, pay later — called BackdPay — and a business line of credit.
Both Backd’s line of credit and working capital loans offer high loan limits. You can borrow as much as $2 million from the company, so a Backd loan is a viable option if you want to make a large investment in your business and need fast approval. That said, Backd uses factor rates on some of their lending products, meaning that the overall cost of borrowing could be significantly higher than other lenders.
BackdPay also lets you borrow large amounts, up to $1.5 million but has a maximum term of just 36 weeks. On the bright side, you’ll pay no interest if you pay the balance back in 12 weeks, so this can be an appealing option for short-term borrowing.
Pros
- High loan limits
- Fast funding
- Flexible repayment options
Cons
- Short terms
- Limited loan options
- Potential for high interest rates
Bluevine business loans
Bluevine is a business lender that focuses on a single type of loan: six- or 12-month lines of credit. If you want a term loan, other financing options or a line of credit limit over $250,000, you’ll have to look elsewhere.
However, if you’re looking for a short-term line of credit, Bluevine offers one of the better ones. The eligibility requirements, specifically the $480,000 annual revenue minimum, are steep, but the starting interest rate is lower than Backd’s. You can also expect quick funding, few fees and a potential credit limit increase as your business grows.
Pros
- Fast funding
- Lower rates than Backd
- Credit limit increases with business growth
Cons
- High revenue requirement
- Lower loan limits
- Not available in all states
How to choose between Backd and Bluevine
Backd and Bluevine serve two different markets with their business loans.
Bluevine only offers a business line of credit, so it’s a good choice for companies that can meet the high revenue requirements but prefer the flexibility of a line of credit for business expenses.
Backd, on the other hand, is a stronger choice for companies looking to make larger purchases. With loan limits as high as $2 million, Backd can help you make a significant investment in your company, such as purchasing equipment or funding an expansion.
Choose Backd for high loan amounts
Backd is the better choice of the two if your business needs a large loan. Backd’s maximum loan is $2 million. BackdPay also lets you borrow as much as $1.5 million in one go.
That’s significantly higher than Bluevine’s $250,000 line of credit limit. While the cost of borrowing with Backd may be higher, it’s the better solution for large purchases between the two.
Choose Bluevine for short-term expenses
Bluevine only offers lines of credit, so it’s the better choice for companies who prefer a more flexible source of funding that can be drawn from as needed.
If your company has short-term financing needs, such as seasonal fluctuations or a limited-time opportunity, a Bluevine line of credit can help you cover them. You could also potentially save money on interest, as you’ll only be charged interest on what you use versus the entire loan amount.
Alternatives
Bluevine and Backd are online business lenders but are not the only options available.
Depending on your financing needs, you may prefer to work with a more traditional lender, like Bank of America. Brick-and-mortar institutions often have a wider variety of loan types available with longer terms, which may be appealing if you prefer in-person support or want to repay financing over a longer period.
If you like the idea of an online loan, Lendio is a good alternative. Lendio works with 75 lending partners to match you with the best lender for your business needs. If you can’t meet Backd or Bluevine’s relatively high revenue requirements, Lendio could be a good choice.
SBA loans
SBA loans are backed by the Small Business Administration. They have interest rate caps and can be used for a variety of needs. Neither Bluevine nor Backd offers these loans, so you’ll need to look to other lenders if interested.
There are several types of SBA loans available. 7(a) loans are one of the most common types, but others exist to meet more specific needs, such as microloans and Community Advantage loans. Microloans are great options for businesses looking to borrow smaller amounts, while Community Advantage loans ensure that underserved communities have access to business
funding.
Bottom line
Whether you choose Backd and Bluevine depends on the type of financing your business needs. Bluevine only offers a line of credit and has a high revenue requirement, so Backd will be a better choice if you’re looking for a variety of options with more flexible eligibility requirements.
That said, whenever you apply for funding, make sure to consider all of your options. Taking time to shop around ensures you find the right financing option for your small business.
Frequently asked questions
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Getting approved with Bluevine depends on your credit score and revenue. The credit score requirement is reasonable at 625, but you’ll need $480,000 in annual revenue to get approved, which can be hard for less established businesses.
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Bluevine does not offer traditional term loans. Instead, it only offers lines of credit. If you can meet the eligibility requirements, you can qualify for a line of credit from Bluevine.
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Backd has a minimum credit score of 600 to qualify for its loan. The higher your credit score, the easier it will be to qualify and the lower the interest rate you’ll pay.
