Have you heard the word on the street? More importantly, have you heard the word on StreetShares?
Rumor has it that StreetShares has low APRs without the ultra-strict application requirements you’d find at big banks.
In our StreetShares review below, we explain the truth behind those claims and tell you what else you need to know about this peer-to-peer lender.
Despite what you’ve heard—and what, frankly, its website sometimes implies—StreetShares is not just for veterans. Sure, veterans founded StreetShares with veteran business owners in mind, but anyone can apply for its small business financing products.
Of course, to apply and get approved for funding, you’ll need to meet some application requirements. In this case, that translates to at least one year of business operations, at least $25,000 in revenue over the last 12 months, and a “reasonable” credit score.
Wondering what counts as a “reasonable” credit score? So did we. When we asked, a StreetShares representative clarified that StreetShares looks for “FICO scores in the mid/low 600s.”
Now, those requirements might sound stricter than some other online lenders, but they’re a lot less strict than most traditional lenders. And with those middle-of-the-road requirements, StreetShares offers rates that can almost compete with the big boys—er, banks.
It’s no secret that you can get rock-bottom rates and years-long terms at traditional banks. And while Streetshares doesn’t quite match the lowest rates of the big banks, it comes pretty darn close.
For example, Wells Fargo’s unsecured business loan starts at 7.75%. APR on StreetShares’s unsecured term loans starts at 8.00%. The best rate we could find on an unsecured loan from any other online lenders was Lending Club’s 9.8%—and Lending Club has stricter annual revenue requirements.
Let’s be clear, though: to get the best rates from StreetShares—or any lender—you’ll have to do better than meeting the bare minimum requirements; the best business loans require higher revenue and credit scores. Even so, StreetShares’s low APRs make it a very competitive lender.
Which isn’t to say that StreetShares is just like the big banks. It’s not. StreetShares offers terms ranging from 3 to 36 months—still much shorter than the five years you can find on an unsecured loan at Wells Fargo, for example.
Likewise, StreetShares has smaller maximum loan sizes than you’ll find at traditional lenders or even some online lenders: $250,000 for both its term loan and its line of credit.
But at the end of the day, StreetShares’s rates deserve your attention. So let’s dive a little deeper into its loan offerings.
StreetShares offers three different financing options: term loans, lines of credit, and contract financing.
Each has its own advantages and disadvantages, so which one you choose will mostly depend on why you need financing in the first place and how you plan to use your funds. We’ll be sure to address that as we go over their products below.
But first, a note: both the term loan and the line of credit are unsecured, so you won’t need to offer up collateral to get approved. Both loans do, however, require a personal guarantee. A personal guarantee puts your own assets on the line if you default, but it shouldn’t affect you otherwise.