Credibly vs. Fora Financial: Which small business lender is right for you?

Credibly and Fora Financial are some of the top lenders for short-term business loans, and both can provide funding within a few days. Small businesses might go with Credibly to compare multiple loan options or lenders in one place. Fora Financial may best serve small businesses needing large loans of up to $1.5 million.

Both Credibly and Fora Financial charge factor rates instead of interest rates. Factor rates are fees applied to the entire loan upfront that can easily lead to high borrowing costs. Not all short-term lenders charge factor rates. To understand the true cost of your business loan, you’ll want to convert factor rates to interest rates and compare loan costs from several lenders closely to make sure you’re getting the best offer.

Let’s deep-dive into the features of Credibly and Fora Financial business loans.

Credibly vs. Fora Financial at a glance

While many online lenders keep relaxed lending requirements, both Credibly and Fora Financial allow bad credit scores in the 500s. They also both accept minimal time in business — helpful for startup businesses. Credibly does prefer strong credit and revenue and is more likely to approve small businesses with this profile.

Credibly offers a wider variety of small business loans than Fora Financial, though its revenue standards are stricter. Both of Fora Financial’s loans go up to $1.5 million, while most Credibly business loans go up to $250,000.

*Credibly lists $180,000 as the minimum annual revenue on its website, but a spokesperson stated the minimum as $300,000. 

Credibly business loans

Credibly offers a wide business loan lineup that rivals the options you see with traditional bank lenders. You can get both working capital loans and merchant cash advances directly from Credibly or multiple other loans through its lending partnerships.

Most Credibly business loans tend to stick to short terms, offering options between 3 and 24 months. Credibly does accept bad credit and minimal business experience. But the lender’s ideal small business candidate will have a 675 personal credit score, $540,000 in annual revenue and three years in business. The lender’s preferred industries include restaurants, contractors, electrical work, repair shops and offices or clinics of health practitioners.

Pros

• Same-day funding available
• Variety of business loans
• Accepts bad credit

Cons

• High revenue required
• Potentially high fees
• Prefers strong business profiles

Fora Financial business loans

Like many online lenders, Fora Financial specializes in a few types of business loans: revenue advances and short-term business loans. Its loan amount range is much higher than most online lenders. Both loans also grant a maximum repayment term of 18 months, which is not unusual but definitely on the short end for payment options.

If you choose the merchant cash advance, you can pay it back from a percentage of business sales until it’s paid off. Payment schedules are either daily or weekly. This option works well for fast cash with payments that fluctuate along with your revenue. On the downside, dipping into sales will restrict your profits.

With either loan, you can borrow more money after paying back 60 percent of the original loan. While good for flexibility, you’ll need to manage that debt well by making sure that all payments fit into your business budget.

Pros

• High loan amounts
• Relaxed lending requirements
• Accepts bad credit

Cons

• Short repayment terms
• Limited loan types
• Potentially high fees

How to choose between Credibly and Fora Financial

Between Credibly and Fora Financial, choosing a small business lender may come down to your business’s revenue or the type of business loan you need. If you’re looking for the most lenient criteria to apply for a business loan, Fora Financial may be the best choice. It accepts personal credit scores of 500, as little as three months in business and $10,000 in average monthly revenue.

While Credibly’s website also has low eligibility requirements (they accept a credit score as low as 500), a spokesperson emphasized much stricter standards. You’ll likely need at least $300,000 per year to be considered. That averages out to $25,000 in monthly revenue deposited in a business checking account. If you have a low credit score, you may only be approved through an external lender in Credibly’s network.

Choose Credibly for business loan variety

If you’d like to compare multiple business loans, you’ll have more choices with Credibly, which offers seven different loans. You can choose from its working capital loan or merchant cash advance, which can be approved within a day or less and is funded directly through Credibly. Both loans offer repayment terms of up to 15 months and also come with a 20 percent discount off the factor rate if you pay off the loan early.

Through lending partnerships, Credibly offers business lines of credit, invoice factoring, equipment financing, long-term loans and SBA loans. But you’ll need a personal credit score of 650 for a line of credit and 700 for a long-term loan. Your business will also need to bring in at least $500,000 annually for its long-term loan option.

Choose Fora Financial for large business loans

Fora Financial may offer just two business loans, but both loans can finance between $5,000 and $1.5 million. Many online lenders keep loans below the $500,000 threshold, so getting loans this size is highly unusual.  Despite such flexible loan sizes, Fora Financial has relaxed loan requirements for its loans. Fora’s minimum requirements are a 570 or higher FICO score, at least six months in business and $20,000 a month in revenue.
Most Credibly business loans offer sizes up to $400,000, although it’s possible to get a long-term business loan up to $10 million through its lending partners. Some of its lending requirements are:

• Merchant cash advance and working capital loan: 550 personal credit scores, 6 months in business, $300,000 in annual revenue

Choose Credibly for SBA loans

Credibly is the way to go if you’re looking for an SBA 7(a) loan since Fora Financial doesn’t offer SBA loans at all. SBA 7(a) loans offer extensive loan amounts of up to $5 million for businesses that qualify, and you can use the capital for nearly any business expense, including equipment or real estate.

The downside is that it’s offered through partner lenders, so approval timelines and requirements could vary. Most SBA loans get approved in 30 to 90 days.

Credibly’s website states that, in general, SBA lenders look for personal credit scores of 620, along with $100,000 in annual revenue and two years in business. These standards are relaxed for SBA loans, making them easier to qualify for through Credibly than with other lenders. Many SBA lenders keep strict requirements like personal credit scores of 650 or higher and $250,000 in annual revenue.

Alternatives

Credibly or Fora Financial might not fit every small business’s financing needs. As another option, Lendio is a loan marketplace with over 75 lenders in its network. It offers a well-rounded variety of business loans, from term loans to lines of credit to accounts receivable financing, and you can apply with a 560 personal credit score.

What if you need a different loan with high funding amounts? SMB Compass provides a range of both conventional and alternative financing up to $10 million. It offers nine loans total, including term loans, lines of credit, SBA loans, purchase orders or inventory financing.

SBA loans

SBA loan programs are managed by the U.S. Small Business Administration, but loans are funded through SBA-approved lenders. Credibly offers SBA 7(a) loans, which are widely used by small businesses for working capital expenses like equipment or operating costs.

But if you’re only covering low costs or don’t quite meet SBA 7(a) loan standards, these SBA loans may be a better option.

• SBA Express loans: A type of 7(a) loan that limits loan sizes to $500,000 but simplifies the application process. These loans no longer need approval by the SBA and can be fully approved by the lender.
• SBA microloans: Select nonprofit microlenders offer funding up to $50,000, potentially alongside other business resources like education and mentoring.
• SBA Community Advantage Small Business Lending Companies: These approved lending partners offer loans geared for underserved businesses, such as minority business owners and low-income communities.

Business credit cards

If your goal is to find business financing with the most relaxed loan criteria possible, think about getting a business credit card. The best business credit cards let you earn points, miles or cash back in the categories you spend on the most. But unlike a business loan, you can avoid interest by paying off the card in full every month. By doing so, you tap into the card’s grace period between the credit card statement and its due date, which is at least 21 days long. This is also one of the most cost-effective ways to build business credit.

Bottom line

Credibly and Fora Financial fit the bill as short-term, online lenders that can accept less-than-ideal credit. Both offer merchant cash advances and short-term loans, although Fora Financial can approve higher loan amounts of up to $1.5 million versus Credibly’s $400,000.

Yet with Credibly, you’re going to need higher revenue — at least $300,000 per year. Fora Financial accepts a much lower $10,000 monthly average across three months for its short-term loan and $144,000 per year for its merchant cash advance. In either case, both lenders offer fast business financing, turning around approvals within 72 hours for Fora Financial or 24 hours for Credibly.

Frequently asked questions

• Is Credibly a direct lender?

  Credibly offers limited business loans as a direct lender, namely its working capital loan and merchant cash advance. But the fintech expands its loan options through partner lenders to include business lines of credit, long-term loans, equipment financing, invoice factoring and SBA loans.

• Who should get a short-term business loan?

  Small businesses may consider short-term business loans when they need financing quickly, either to cover an emergency expense or make a small purchase that expands growth. The business should be able to handle daily or weekly payments and be willing to accept high interest rates.

• What credit score do you need for an SBA loan?

  Most SBA-approved lenders set minimum personal credit scores at 650 or higher, hoping to get quality small business candidates with strong ability to repay. The SBA doesn’t set these minimum scores, so the standard can vary from lender to lender. SBA microloans and Community Advantage loans often lower the criteria, accepting scores in the 500s to help disadvantaged businesses.