Sometimes small businesses can’t wait long for financing. You may spot a growth opportunity, for instance, and need to move on it fast. If you have strong cash flow, alternative lender Bond Street is a cost-efficient option.
Founded in 2013, Bond Street offers small-business owners fast cash and competitive rates. Annual percentage rates are between 8% and 25%, and borrowers typically receive funding in three to four days, according to the company. The online lender’s term loans range from $10,000 to $1 million, with the average being $150,000. Loans are repaid semi-monthly over one to three years.
Bond Street works with businesses in most sectors, including architecture, law, accounting, restaurants and fitness centers. Borrowers typically use its loans to finance growth, such as opening a new location or buying equipment, but the company says borrowers can also refinance an existing term loan or business credit card debt.
Reasons to use Bond Street
Low rates: Bond Street’s APR range is higher than that of traditional banks but compares favorably with other online lenders. The APR includes a one-time origination fee of 3% to 5% of the approved loan after you’ve been funded. The average APR for Bond Street’s outstanding loans is 15%, though it can range from 8% to 25%.
Fast access to cash: Funding at Bond Street is among the fastest you’ll find with online lenders. The application takes five to 10 minutes to complete, and loans typically are funded within just three to four business days, according to the company. This makes it a good option for business owners who want to move fast on a growth opportunity, such as buying a new location, purchasing equipment or hiring staff.
No prepayment fee: Borrowers can repay their term loan at any time with no prepayment penalty. Bond Street loans are fully amortizing, so repaying the loan early will save you from paying the remaining interest on the loan. This isn’t always the case with other business loans such as merchant cash advances. Some business loans carry a fixed-fee structure, which means you have to pay interest and other fees regardless of when you pay off the loan; Bond Street does not.
No hard inquiry on credit report: Bond Street does a soft pull on your personal credit score during the application process, which means that applying won’t hurt your credit. Some lenders require a hard pull, which can ding your credit.
Where Bond Street falls short
Need good credit and strong business to qualify: Borrowers need a minimum personal credit score of 640, annual revenue of $200,000 and at least two years in business to qualify. If you don’t meet these criteria, you may still be able to get approved if your business has strong cash flow, CEO David Haber says. The average funded borrower has a credit score of 720, with $2 million in annual revenue and eight years in business, he says.
Frequent repayments: The company’s term loans are repaid in equal semi-monthly payments, on the 1st and 16th of each month. Some borrowers may prefer to repay their loans once monthly, and the repayment structure may not work for businesses with uneven cash flow.
Business lien and personal guarantee required: One or more owners who represent at least 51% of the business must personally guarantee the loan, which means failure to repay puts each guarantor’s personal assets and credit at risk. All loans are also backed by business assets via a UCC-1 filing in case the debt is not repaid.
If Bond Street is the right fit for you:
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Updated Feb. 22, 2017