Are you considering taking your business to the next level? A small business loan could be your ticket to purchasing new equipment for your business, creating more jobs, or making improvements to your space. Lenders such as Bond Street can help established businesses finance these business goals and more.
Founded in 2013, Bond Street is one of the newest lenders to make waves in the small business loans space. They offer term loans that range from $50,000 – $500,000 with 1 – 3 year repayment terms. Rates start as low as 6% with a flat origination fee of 3%.
We did an extensive review of Bond Street’s application process about 6 months ago right after they went through their latest round of funding. Continue on below to see how Bond Street’s loans stack up to other options out there.
What a Bond Street loan might look like
Bond Street offers loans from $50,000 – $500,000 with typical APRs between 8% – 25%. Loans can be paid back over a 1, 2, or 3 year term, and payments are to be made via ACH deposits twice per month.
Let’s say you’re qualified for a $200,000 loan from Bond Street, with a 2 year repayment term at 10% interest. Using Nav’s term loan calculator we can see that the APR for this Bond Street loan would be 13.07% with a total cost of $27,495.65. That means two $4,614.50 payments per month over the duration of the loan.
How will my rate be determined?
Bond Street’s website says: “Unlike other lenders, our focus goes beyond basic credit scores as we seek to more fully understand you and your business. We take thousands of data points into account, including your recent business financials, personal credit data, and even information from across the web.”
(See here for more information about how your web presence might affect the cost of your loan.)
Requirements to qualify
Bond Street’s main requirements are:
- 640 personal credit score
- 2+ years of operating history
- $200,000 or more in annual revenue
- personal guarantee
These requirements are typical of an online term loan lender. They will also want to see financial statements, such as recent bank statements and tax returns. If you use an online bookkeeping system, these documents can easily be uploaded during Bond Street’s application process by syncing your online bookkeeping account.
Got it. So how does Bond Street compare to other options available to me?
|Bond Street||Merchant Cash Advances||SBA Loans|
|Loan amount||$50,000 – $500,000||Typically up to $250,000||$50,000 – $5M|
|Interest rate||6 – 25% interest + 3% origination||15 – 150% APR<||6 – 13% APR|
|Speed of funding||7 days or less||1 – 7 days||1 – 3+ months|
|Loan duration||Up to 3 years||Up to 2 years||5 – 25 years|
|Credit score needed to qualify||640 personal credit score||500+||FICO SBSS score of 160 or above|
|Requirements||– U.S. based business
– 2+ years of operating history
– generating more than $200,000 in annual revenue
– personal guarantee
|– must accept credit cards
– sometimes personal guarantee required
|– available to startups & established businesses, but many providers require 2+ years in business
– no existing debt obligations to U.S. gov
– do business in the U.S.
– read more requirements here.
|Collateral needed?||UCC lien on business assets||None||When available, yes|
As you can see, Bond Street’s price tag falls somewhere in between that of a pricey merchant cash advance and a less expensive SBA loan. The MCA is easy to qualify for and a fast turnaround time, but the high cost makes it a last-resort option or option for business owners with low credit scores. SBA loans are a great option for businesses with excellent credit who aren’t in a time crunch for cash.
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Bond Street’s rates fall within a similar range as most other online term loan lenders such as Funding Circle and Lending Club, who tend to be one of the least expensive options for online loans. One drawback with Bond Street’s loans is that their repayment terms only extend to 3 years, whereas many other online term lenders have repayment terms as long as 5 years.
Bond Street could be a good lender for you if you have an established business with a good to great personal credit score, and you are looking to: (1) move or improve your space, (2) refinance debt, (3) purchase inventory or equipment, or (4) bring on new hires. They can fund you up to $500,000 in as little as 7 days, and their fee structure is transparent and simple to understand.
As always, keep in mind that there are tons of financing options out there for small businesses—be sure to browse through Nav’s marketplace, which can match you with the best financing options and the ones for which you are most likely to qualify.