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StreetShares Business Loans Review 2019

Feb. 5, 2019
Small Business, Small Business Loans
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  • Loan amount: $2,000 to $250,000 for term loans; $5,000 to $250,000 for standard line of credit; Up to $2 million for invoice factoring and government contract financing
  • APR: 9% to 40%; 1% to 5.5% for select products
  • Loan term: 3 to 36 months
  • Funding time: 1 to 5 days
  • Read our StreetShares review
Apply now at StreetShares

Online lender StreetShares helps fill a financing void for businesses that are starting to find their footing.

StreetShares is a good option for borrowers who:

  • Have strong cash flow: Though StreetShares uses a combination of traditional and alternative underwriting practices, the lender focuses primarily on cash flow as an indicator of your business’s ability to repay the loan.
  • Are looking for financing options: StreetShares offers multiple loan products, including term loans, invoice factoring and lines of credit (see table below).
  • Need to borrow less than $100,000: For term loans, you can borrow as much as 20% of your annual revenue, up to $100,000 (or $250,000, if you’re a returning customer). The same is true for a standard line of credit, which also has a $250,000 allowance for returning customers.
  • Are veterans: CEO Mark Rockefeller, a veteran himself, says he recalls seeing payday lenders lining the streets around military bases, preying on young service members. When starting his company, Rockefeller aimed to help veterans finance their small businesses and avoid similar lending traps, partnering with organizations including the American Legion and the National Veteran-Owned Business Association.

Reasons to use StreetShares

Community-based lending: StreetShares takes a different spin on the peer-to-peer lending model, which connects borrowers with investors. The company uses its “affinity-based lending” strategy to match borrowers with investors who share similar characteristics, such as military veterans.

Connecting the borrower to investors who have similar passions or interests is a selling point for StreetShares, because the borrower feels a responsibility to those who put up the funds, Rockefeller says.

» MORE: Compare small-business loans for veterans

Access to capital for newer businesses: Finding loans for businesses with low revenue can be tricky, but StreetShares offers loans to companies that have been in business for just one year and pull in $75,000 in annual revenue.

No prepayment fee: Borrowers can pay back their loans early, with no prepayment penalties. If your company is young, there’s a good chance you’ll alter your financing plan as your business changes, says Peter Somerville, director of investor relations for StreetShares.

“We’ve talked to business owners who are being choked to death by prepayment fees,” he says. Regardless of the length of your loan, StreetShares offers the flexibility of paying it back immediately.

Multiple borrowing options

 Loan amountsTypical APR rangeBorrowing requirements
Term loan$2,000 to $250,000; repaid over 3 to 36 months8.75% to 39.99%Credit score: 600
Time in business: 1 year
Annual revenue: $75,000
Invoice financingUp to $2 million; 90% of invoice financed1% to 5.5%Credit score: 540
Time in business: N/A
Annual revenue: N/A
Standard line of creditUp to $250,000; repaid over 3 or 36 months8.75% to 39.99%Credit score: 600
Time in business: 1 year
Annual revenue: $75,000
Specialty Financing Products
Government contracting
*Similar to invoice financing but specific to government contracts
Up to $2 million; 80% to 90% of contract financed1% to 5.5%Credit score: 540
Time in business: 1 year
Annual revenue: N/A
Accounts receivable-backed line of credit
*Secured by accounts receivable
Up to $250,000; repaid over 3 to 36 months8.75% to 39.99%
Credit score: 600
Time in business: 1 year
Annual revenue: $75,000
Asset-backed line of credit
*Secured by assets
Up to $250,000; repaid over 3 to 36 months 8.75% to 39.99%

Credit score: 600
Time in business: 1 year
Annual revenue: $75,000
Unbilled line of credit
*Used in combination with contract financing
Up to $2 million; 75% of unbilled work1% to 5.5%Credit score: 540
Time in business: N/A
Annual revenue: N/A
Payroll funding line of credit
*Credit to help you fulfill payroll needs
Up to $2 million; 75% of unbilled work 1% to 5.5%
Credit score: 540
Time in business: N/A
Annual revenue: N/A

Where StreetShares falls short

Funding limitations: Though StreetShares offers term loans and standard lines of credit up to $250,000, the maximum amount you can qualify for is 20% of your annual revenue. If you make $200,000 a year, that limits you to a maximum loan of $40,000. You may need to look elsewhere to get financing for big projects, such as a major expansion.

Limited reach: In response to market demand, StreetShares applies for permission to lend on a state-by-state basis. At the moment, it does not provide loans to businesses in North Dakota, South Dakota, Vermont, Rhode Island, Wyoming, Oregon, Montana, Nevada, or Alaska. If you operate a sole proprietorship, you can’t use StreetShares if you live in Delaware, Minnesota, Nebraska, New Jersey, New York, Washington, D.C., or Wisconsin (as of January 2017).

There are also a few industry limitations. StreetShares does not lend to non-commercial construction contractors and those who will use the loan to flip homes or other real estate (although real estate management is OK). It doesn’t lend to law firms or tax preparation or accounting firms — unless the business belongs to a certified public accountant.

Weekly payments: Most of StreetShares products are paid back with automatic weekly deductions from your bank account. Although some borrowers may find that convenient, others looking for semimonthly or monthly payments may struggle with the lack of flexibility. If you have uneven cash flow, you may also find this repayment option inconvenient.

Compare business loans

If you’d like to compare loan options, NerdWallet has a list of small-business loans that are best for business owners. All of our recommendations are based on the lender’s market scope and track record and on the needs of business owners, as well as rates and other factors, so you can make the right financing decision.

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