Taycor Financial vs. SMB Compass: Which small business lender is right for you?

Taycor Financial and SMB Compass are both fintech companies that offer loans up to several million dollars. Their flexible loan amounts and lenient application criteria can help small businesses of all shapes and sizes.

But SMB Compass offers twice as many business loan options as Taycor Financial. While Taycor Financial does accept lower credit scores and time in business, you may not be approved if your finances aren’t in good standing. Choosing between these small business lenders may come down to the exact type of loan you’re looking for.

Let’s go in-depth about the advantages and disadvantages of using each lender — and how they compare.

Taycor Financial vs. SMB Compass at a glance

Taycor Financial and SMB Compass both offer high loan amounts but specialize in different types of lending. Taycor Financial’s mainstays are working capital loans and equipment loans, while SMB Compass offers multiple business loans, including alternative forms of lending, like purchase order financing.

Taycor Financial business loans

Taycor Financial advertises specializing in working capital loans, which are used for general business expenses. These loans include a business line of credit, term loan and bridge loan. The fintech lender also specializes in equipment loans, leases and buybacks in amounts upwards of $2 million to $5 million.

To get approved with Taycor Financial, you need to meet its time in business requirement of at least three months. That timeline is much shorter than most lenders require, even for an online-only small business lender.

Taycor Financial is also known for accepting low credit and revenue, though its leniency doesn’t guarantee that you’ll get approved. For example, term loans only require a 500 personal credit score and $96,000 in annual revenue. Cash advances don’t have any credit requirements, and you need as little as $48,000 in annual revenue to be considered for an advance.

Pros

• Relaxed loan requirements
• Funds within 24 hours
• Multiple equipment loan options

Cons

• High loan fees
• May not approve bad credit borrowers
• No in-person support

SMB Compass business loans

SMB Compass provides both conventional and alternative business loans, from term loans and SBA loans to purchase order financing. It grants low interest rates that start from 5.25 percent, which beats some traditional lenders.

Traditional lenders, like brick-and-mortar banks, usually offer the lowest interest rates, with starting APRs in the 7 percent to 8 percent range. These lenders also tend to have the strictest requirements to apply. With SMB Compass, you get the best of both worlds, but you still need strong credit to qualify for the lowest rates.

Pros

• High loan amounts
• Low starting rates
• Alternative business loan options

Cons

• Credit requirements vary by loan
• Not available to sole proprietors
• No in-person support

How to choose between Taycor Financial and SMB Compass

Taycor Financial and SMB Compass are both helpful to business owners with lower credit scores or newer businesses. With Taycor Financial, getting approved with less-than-ideal credit isn’t guaranteed, though having strong business revenue can increase your chances of approval.

SMB Compass offers several loans, some allowing credit scores in the lower 600s. You will need to qualify with SMB Compass’s other requirements, which vary significantly for each loan. For example, its business line of credit accepts a 600 personal credit score and $100,000 in annual revenue. But you need two years in business to qualify. Let’s look at the areas where these two lenders shine:

Choose Taycor Financial for accessible equipment loans

Taycor Financial offers several equipment financing choices, including an equipment loan, lease or buyback program. According to a spokesperson, its equipment loan goes up to $5 million with wide-ranging terms from 12 to 84 months. Its equipment lease and buyback options offer financing from $5,000 to $2 million.

Startups are eligible for equipment lease and buyback loans. But you may need at least three years in business with a conventional equipment loan. Despite this requirement, its equipment loan remains accessible. Taycor Financial doesn’t have a revenue requirement for loans under $250,000, and you can get approved with a 550 personal credit score.

By contrast, SMB Compass’s equipment loan requires a 600 credit score and one year in business. It doesn’t mention a revenue requirement, but most online lenders require at least $100,000 in annual revenue.

Choose SMB Compass for loan variety

SMB Compass is the best option of the two lenders for its sheer number of business loan products. Not only does it offer conventional loans, like term loans, lines of credit and equipment loans, but you can also get alternative forms of financing, including bridge loans, SBA loans, invoice financing, inventory financing, purchase order financing and asset-based lending.

SMB Compass doesn’t always disclose its credit requirements for alternative loans, but they are often secured by collateral. Because of this, alternative loans can be ideal for newer businesses or those that don’t have strong credit or revenue. SMB Compass also stands out because of its high loan amounts, offering either a $5 million or $10 million maximum for all of its loans.

Taycor Financial also offers a decent variety, including business lines of credit, equipment financing, term loans and cash advances. The cash advance is the only alternative loan it offers, but Taycor Financial doesn’t set a minimum credit score for this financing.

Alternatives

If you’re looking for a small business lender with wide loan choices but in-person support, try Bank of America. Bank of America offers all the staples, including term loans, equipment loans and SBA loans, as an SBA Preferred Lender. It also offers three business lines of credit, one of which is a starter to credit-building. The credit-builder line of credit requires you to secure the line with at least $1,000 in cash.

However, you may need to explore other lenders if you have fair or bad credit. Fundible is an ideal option because it offers a variety of loans, most with relaxed credit requirements as low as 500. According to a spokesperson, the lender tries to work with businesses to get the financing they need.

Finally, research different business credit cards to see if one might be a better fit than a business loan. If you need to charge a few purchases that you’ll pay back over time, you can get a business credit card with a simpler application process than a business loan. Business credit cards usually offer rewards like cash back, which you can redeem for business travel or purchases. Additionally, if you pay the balance in full monthly, you’ll avoid interest charges.

Alternative SBA loans

SMB Compass offers SBA loans, which are an option if you’ve exhausted all other financing. But you’re limited to the standard SBA loan programs that allow lenders to set their own lending criteria. Lenders tend to stick to high standards due to the loans’ popularity with small business owners.

But if your credit and revenue aren’t in the best standing or you’re a startup, you can still qualify for an SBA loan. These two SBA loans are offered through nonprofits or organizations on a mission to help low-income, minority and other disadvantaged communities:

• SBA microloan: Small SBA loans offered with up to $50,000
• SBA Community Advantage loan: An SBA loan of up to $350,000

Bottom line

Both Taycor Financial and SMB Compass offer multiple business loans with low rates. But Taycor Financial specializes in equipment lending and leasing, while SMB Compass is an ideal option for relaxed conventional or alternative business lending. The main consideration with these lenders is choosing the type of loan that best suits your business.

If you can’t find the right loan for your needs, consider other top small business lenders and the types of loans and features offered.

Frequently asked questions

• What credit score do you need for Taycor Financial?

  With Taycor Financial, you can apply for a business loan with a credit score of at least 500. Some of its loans require higher credit, such as its business line of credit, which needs a 600 credit score.

• What are the 3 types of places you might go to get a small business loan?

  You could get a business loan through a traditional bank or credit union, an online lender that offers loans directly or an online marketplace that offers loans through partner lenders.

• Is a small business loan secured or unsecured?

  You can get small business loans as secured or unsecured loans. A secured loan is simply any business loan with assets used to guarantee that you can repay the loan. An unsecured loan won’t have any assets put up to back the loan. But, many lenders require you to sign a personal guarantee, making you personally responsible if you default.