Backd is an online lender that offers large lines of credit and merchant cash advances to small-business owners seeking a streamlined application process.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
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Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
NerdWallet's content is
fact-checked for accuracy, timeliness, and relevance by humans.
It undergoes a thorough review process involving writers and editors to ensure
the information is as clear and complete as possible. Learn more by checking
our
Editorial Guidelines.
Content was accurate at the time of publication.
Why trust NerdWallet
250+ small-business products reviewed and rated by our team of experts.
80+ years of combined experience covering small business and personal finance.
50+ categories of the best business loan selections.
NerdWallet's small-business loans content, including ratings, recommendations and reviews, is overseen by a team of writers and editors who specialize in business lending. Their work has appeared in The Associated Press, The Washington Post, MarketWatch, Nasdaq, Entrepreneur, ABC News, MSN and other national and local media outlets. Each writer and editor follows NerdWallet's strict guidelines for editorial integrity to ensure accuracy and fairness in our coverage.
Advertiser disclosure
You’re our first priority.
Every time.
We believe everyone should be able to make financial decisions with
confidence. And while our site doesn’t feature every company or
financial product available on the market, we’re proud that the guidance
we offer, the information we provide and the tools we create are
objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence
which products we review and write about (and where those products
appear on the site), but it in no way affects our recommendations or
advice, which are grounded in thousands of hours of research. Our
partners cannot pay us to guarantee favorable reviews of their products
or services. Here is a list of our partners .
Backd - Line of credit
Overview
The bottom line:
Backd offers a business line of credit and merchant cash advance for entrepreneurs seeking quick access to large funding amounts, but prepare for high financing costs.
Loan details
Min. Loan Amount
$10,000
Min. Term Length
6 months
Min. APR
42%
Max Loan Amount
$750,000
Max Term Length
12 months
Max APR
63%
Qualifications
Min. credit score
600
Min. Time in Business
12 months
Min. Annual Revenue
$300,000
Pros & Cons
Pros
Fast application and funding process.
Responsive and helpful customer support.
Prepayment discounts.
Its line of credit requires a lower credit score than most online competitors.
Cons
Charges draw and origination fees.
Can’t be used to build business credit.
High minimum revenue requirements for its line of credit.
Its MCA requires a higher credit score than many online competitors.
Founded in 2018 and headquartered in Austin, Texas, Backd provides small-business loans through a fast and straightforward online application process. Qualified applicants may receive funding in as little as 24 hours. But speed and convenience may come at a cost. Like many online lenders, its offerings are expensive compared with traditional lenders.
Backd’s business line of credit offers up to $750000 in working capital to cover short-term expenses, while its merchant cash advance (MCA) allows business owners access of up to $2 million in funding, with fixed repayments based on a borrower’s business revenue.
Backd’s business funding is best for borrowers who:
Need large funding amounts. Backd's lines of credit and merchant cash advance limits are higher than those offered by many other online lenders.
Need quick access to cash. Qualified borrowers can receive funds in as little as 24 hours.
Can afford higher borrowing costs. Backd’s business funding options will likely be more expensive than traditional bank loans.
Prefer a streamlined online process over applying in person. In our experience, the application is straightforward, and customer service via phone and email is prompt.
Backd loan qualifications
To qualify for a line of credit or MCA from Backd, you’ll need to meet the following minimum requirements:
Credit score: 600 for a line of credit; 630 for a merchant cash advance.
Time in business: 12 months.
Annual revenue: $300000 for a line of credit; $100000 for a merchant cash advance.
...
Backd loan features
Here’s what you can expect from Backd’s line of credit and merchant cash advance.
Backd line of credit
Loan amount
$10000 to $750000.
Estimated APR*
42.08% to 63.17%.
Fees
3% draw fee.
No prepayment penalty.
Terms
6 to 12 months.
Repayment schedule
Weekly.
Funding speed
As fast as 24 hours.
*Estimated APR includes draw fee.
Backd merchant cash advance
Advance amount
$10,000 to $2 million.
Estimated factor rate
1.18 to 1.28.
Fees
3% origination fee.
$150 administration fee.
No prepayment penalty.
Terms
On average, borrowers repay their advances within 16 months.
Backd offers generous business funding limits compared with many online lenders. Its business line of credit goes up to $750000, and its merchant cash advance can reach $2 million. These high limits may appeal to businesses with significant financing needs. However, the cost of borrowing will likely be much higher than traditional bank financing. This is especially true for its MCA as MCAs are among the costliest forms of business financing. Receiving an advance this high can result in a significant repayment burden.
Backd’s streamlined digital application and fast turnaround can be a big advantage for business owners trying to seize an opportunity or cover an unexpected expense. Qualified borrowers may receive approval and funding within 24 hours, offering a speed advantage over traditional bank or SBA loans.
Backd offers customer assistance through a dedicated phone line and online contact form. When NerdWallet tested both, a representative answered the phone in under a minute and responded to a contact form submission via email in just over 10 minutes. In both cases, Backd’s representatives were friendly, helpful and well-informed.
Where Backd falls short
High borrowing costs
Backd’s financing options come at a premium, especially when compared with traditional bank loans. Small-business owners with tight profit margins or those who qualify for lower-cost funding (such as bank or SBA loans) should explore other options.
Can’t be used to build business credit
Backd doesn’t report payments to any of the major commercial credit bureaus. This means on-time payments won’t help you build or improve your business credit score, something that can help you unlock better terms and rates on future business loans.
Alternatives to Backd
Headway Capital
Headway Capital is another online lender offering lines of credit to small-business owners. It may be a better fit for newer businesses, as it accepts applicants with just 6 months in business and a minimum annual revenue of $50000, far lower than Backd’s 12-month and $300000 requirements. However, Headway Capital’s line of credit tops out at $100000, well below Backd’s $750000 maximum. Its APR may also be higher than Backd’s line of credit.
Forward Financing
Forward Financing’s MCA is more accessible for business owners with bad credit. It accepts applicants with a credit score as low as 500, compared with Backd’s 630 credit score requirement. Like Backd, it may approve applicants in as little as 24 hours, however, it requires a slightly higher annual revenue of $120000 and has a lower maximum advance limit ($300000 versus Backd’s $2 million limit).