Pros & Cons
Competitive rates among online lenders.
No prepayment penalty.
Extra monthly payments can save interest cost.
Requires high minimum credit score and revenue.
Requires business lien and may require personal guarantee.
Not available in Nevada, North Dakota, South Dakota or Vermont.
Credibility Capital, a New York-based online lender founded in 2013, offers low-risk borrowers access to short-term business loans.
Credibility Capital is a good fit for:
Strong credit borrowers: It's attractive to good-credit borrowers who may fall just short of qualifying for traditional financing.
Small businesses looking for growth opportunities: According to Brett Baris, Credibility Capital CEO and co-founder, average loan size was around $175,000 in 2019, and businesses typically use the money for expansion and refinancing high APRs.
How Much Do You Need?
Reasons to use Credibility Capital
Underwriting flexibility: Credibility Capital takes a holistic view of a business’s finances, meaning it doesn’t always execute hard cutoffs for certain business metrics, Baris says. If a company shows strong performance in a specific area, for instance, that may compensate for low credit score or revenue.
No prepayment fee: If you take out a term loan but find yourself financially stable sooner than you thought, you can pay off the loan faster without incurring additional fees. Paying your loan back early can help cut down on how much you pay in interest, lowering the overall cost of borrowing.
Automatic monthly payments: Each month, you’ll pay a portion of the loan via an ACH transfer. The loan is fully amortizing, meaning each payment will consist of interest and principal. This ensures the loan will be paid off at the end of the loan term.
Where Credibility Capital falls short
Not for bad-credit borrowers: While Credibility Capital doesn’t have an official minimum credit requirement, typical borrowers have at least a 650 personal credit score. Borrowers also can’t have had a personal or commercial bankruptcy within the past five years. “Our underwriting is, in a sense, a little more traditional than some other folks in our industry,” Baris says.
Not for long-term financing: Term loans max out at three years, so if you’re looking for financing you can use in the near and distant future, you’re better off looking into long-term financing from lenders that provide Small Business Administration loans, for example.
Requires a UCC-1 filing and possibly a personal guarantee: Credibility Capital loans are secured by a UCC-1 filing, which essentially means you’re putting up your business as collateral. Though the company doesn’t place a lien on a specific item (real estate, equipment, etc.), the filing means it has a stake in your assets.
Additionally, if you own 25% or more of your business, you will also need a personal guarantee for the loan. In this case, your personal assets could be at risk.
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.
Frequently asked questions
Credibility Capital is a New York-based online lender that was founded in 2013. Since 2019, the company has been accredited by the Better Business Bureau, where it has an A+ rating.
Credibility Capital performs a soft credit inquiry to check your credit score, which does not impact your credit score. The lender performs a hard pull only if you’re approved for financing and move forward with the loan.