Securing business financing from a bank is no easy feat. But that’s often an even taller order for businesses that operate in low-income areas, as traditional lending institutions often consider these businesses too high-risk to take on debt at an affordable interest rate. Luckily, platforms like Lendistry, a California-based CDFI (Community Development Financial Institution), make business loans more accessible to just such organizations.
As a reminder, CDFIs, which may be either banks or credit unions, are dedicated to providing financial assistance to small businesses in underserved areas in order to encourage and revitalize small business growth in these communities. As such, CDFIs like Lendistry may have more forgiving credit standards than traditional lending institutions would.
In addition to providing assistance, coaching, and education on a number of projects for small business owners, Lendistry offers small business loans of up to $2 million. And unlike most brick-and-mortar banks, Lendistry offers an online application and a quick credit decision (though rest assured that Lendistry’s underwriters are humans, not machines).
Here, we’ll go over the types of business loans Lendistry offers on their platform, their rates and terms, and how to apply for a Lendistry business loan. And if you decide that Lendistry isn’t the financial institution you’d like to work with, we’ll offer three alternative lending platforms for you to consider instead.
Lendistry offers a fairly standard array of small business loans, and—as Lendistry prides itself as a responsible lender—all of their loans start at reasonable interest rates.
Before you apply for a loan through Lendistry, however, do know that for traditional business loans, Lendistry won’t accept businesses that have declared bankruptcy within the last three years or business owners who have defaulted on government debt. Most business loans also require a 640 minimum credit score, and that the applying business has at least two years of operation under its belt.
SBA loans through Lendistry have slightly different eligibility standards. At a minimum, applying business owners must have a 600 credit score (though most applicants need an excellent credit score to be accepted for an SBA loan). Also, businesses younger than two years old might be considered for an SBA loan if their other credentials are especially strong.
With all that in mind, let’s get into the details about each type of business loan Lendistry offers on their platform:
A term loan is a lump sum of cash that’s deposited directly into your business bank account, and which you’ll repay, plus interest, over a predetermined amount of time. Lendistry can offer term loans of up to $1 million with repayment terms ranging between one and five years, and interest rates may be as low as 6%. As is the case with any other type of loan on any other platform, your loan amount, terms, and interest rate depend on your credit profile.
To qualify for a Lendistry term loan, you’ll need to present a minimum 600 FICO score and have been in business for at least two years. You’ll also need a DSCR (debt service coverage ratio) of 1.25, which indicates to the underwriters that your business is solvent enough to repay your debt.
If you’re approved for a business line of credit, then you’ll have access to a pool of funds from which you can draw any amount (up to its predetermined limit) at any time. Then, you’re only responsible for repaying the amount you’ve borrowed, as well as interest. Lendistry offers two types of credit lines: an Express Business Line of Credit and a Revolving Business Line of Credit.
To qualify for an Express Business Line of Credit from Lendistry, business owners will need a minimum 680 credit score, two or more years in business, and a 1.15 DSCR. Express lines can reach up to $250,000, and interest rates start at 8%.
With a Revolving Business Line of Credit, qualified business owners may be able to access a credit line of up to $1 million, and interest rates begin at 13.99%. Lendistry can consider business owners with FICO scores starting at 600, and they won’t consider your business’s DSCR ratio at all during the underwriting process.
Whichever line of credit you choose, Lendistry will review your borrowing performance annually to determine your repayment period.
If you need financial assistance to purchase, develop, renovate, or construct property or buildings to be used for business-related purposes (and most business owners will need assistance, as real estate-related projects tend to be incredibly expensive), then consider applying for a Commercial Real Estate Loan through Lendistry.
Lendistry’s Commercial Real Estate Loans range between $250,000 and $2 million, depending on the size of your project, and may amortize up to 25 years at interest rates as low as 7.5%. Business owners seeking real estate financing from Lendistry will need to come to the table with at least a 640 credit score, a DSCR of 1.15 years, and two or more years of operation.
Most business owners are eager to secure SBA financing, as these government-guaranteed loans offer some of the highest loan amounts, lowest interest rates, and longest repayment terms on the market. And as it’s the U.S. Small Business Administration’s mission to encourage the growth and success of American small businesses, their loan programs are intended to make business financing more accessible to more entrepreneurs—including entrepreneurs who have been traditionally overlooked in the lending space, such as those with struggling credit, minority business owners, or those who operate in low-income communities.
And most of those business owners would do well to seek an SBA loan with Lendistry as their intermediary lender. In 2018, Lendistry secured the second-place ranking among national Community Advantage lenders that funded the largest volume of SBA loans—that year, Lendistry funded a total of $17,540,700 in SBA loan funds to California-based small business owners.
Through Lendistry, qualifying business owners can access SBA loans between $50,000 and $250,000, with repayment terms lasting up to 10 years. Interest rates range between 6.25% and 11.25%. To qualify, business owners need a minimum FICO score of 600, a DSCR of 1, and at least two years in business, as well as meeting SBA loan eligibility requirements (remember that both the intermediary lender and the SBA will need to approve of your loan application to qualify).
Although Lendistry is certainly an attractive option for most business owners, it’s still worth looking into your other loan options. Thanks to the rise of online lending, you have lots of accessible alternatives to consider—and the following lenders we’ll mention are just three of your options. Plus, like Lendistry, all of the following lenders boast simple, online applications and quick credit decisions.
For a traditional loan product (from a non-traditional lending institution), consider Fundation, a premium online lender that offers term loans of up to $500,000, with repayment terms lasting up to four years. As always, interest rates vary depending on your business’s credentials, but you can generally expect your Fundation APR to range between 7.9% and 28.9%.
To qualify for a Fundation term loan under $200,000, you’ll need at least a 660 credit score, $100,000 or more in annual revenue, and at least a year in business. For a loan amount greater than $200,000, you’ll need to meet similar qualifications to a bank’s: $750,000 or more in annual revenue, 720 personal credit score, and five years in business at a minimum.
Finally, consider Funding Circle as another option if you’re in the market for a traditional, medium-term loan—with perhaps even laxer eligibility standards than either Fundation or Lendistry.
This lender can provide qualified applicants with loans between $25,000 and $500,000 at interest rates ranging between 5.5% and 27.9%, with terms lasting between one and five years. At a minimum, business owners need to have a 660 credit score and two years in business, and Funding Circle won’t consider your annual revenue during the underwriting process.
If you think that a Lendistry loan could work for your small business, you can apply online at MyLendistry.com, or call a Lendistry representative to complete your application over the phone. In your application you might be asked to provide the following documents, which you should gather together ahead of time:
Because they’re a tech-forward lending platform, Lendistry can process applications and return to you with a credit decision quickly—typically between 24 and 48 hours. Then, if your loan application is approved, you’ll see your loan funds in your business bank account within 24 to 72 hours. To repay your loan, Lendistry will automatically pull funds from your business checking account or from your daily credit card transactions, depending on the structure of your loan, on either a weekly or monthly basis.
But remember: If you’re turned down for a Lendistry loan, or if you simply don’t think that Lendistry is the right lending partner for your business, then your loan options certainly don’t end there. Consider one of the three alternative options we mentioned here, all of which are excellent, reputable online lenders that make funding accessible for business owners who’ve been typically overlooked by large banks.
Better yet, work with a loan specialist one-on-one. Together, you and your loan expert can explore, compare, and apply for the loan options that will truly set your business up for success (without going into unnecessary debt to do so).
Meredith Wood is the founding editor of the Fundera Ledger and a GM at NerdWallet.
Meredith launched the Fundera Ledger in 2014. She has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending and financial management.