Insufficient cash is a road bump many companies face, not just small and midsize businesses (SMBs). As reported by Entrepreneur, a US Bank survey found that 82% of companies fail because of less than stellar cash management.
When organizations face cash flow issues, most companies turn to business loans, a point driven home by a Federal Banks’ report that found 57% of small businesses sought business lending for $100,000 or less. Only 8% sought financing worth $1 million or more.
Most hope the funding will get their business back to profitability, but acquiring one is no walk in the park. Those who engage in business banking are painfully aware of traditional banks’ stringent qualification requirements and slow processing times. Thankfully, there are favorable financing options from alternative lenders. Part of their financial services arsenal is B2B lending.
B2B lending emerged to resolve the desperate need for financing by small businesses and startups. Unlike traditional credit cards and loans, B2B lending has less strict requirements for qualifying and near real-time processing times.
Read on to learn what B2B lending entails and the top B2B lending fintech companies.
B2B lending involves businesses borrowing cash from big banks or other well-established financial institutions at a fee. It is opposed to peer-to-peer (P2P) lending, which uses online platforms to match borrowers to lenders.
As per federal findings in the link provided above, it’s much easier to get funding from alternative lenders. The highest approval rating from an institutional lender stands at 66%, while the approval rating for merchant cash advances is 85%.
Examples of P2P lending platforms and fintech startups include:
- Collaborative Cash Flow Optimization (C2FO)
Therefore, B2B lending companies are business entities that lend other businesses money through online platforms. Some B2B lenders use software-as-a-service (SaaS) and financial technology, so they also go by B2B lending fintech.
Initially, fintech companies offered loans to consumers only, but due to market demand, they started offering business loans to businesses.
Fintech companies use machine learning and blockchain technologies to process business loans. Some even offer an application programming interface (API) to facilitate the integration of their software to your eCommerce ecosystem and exploit its full functionality.
The Fintech offers low rates of 11.89% APR for term loans and 10.99% for lines of credit. Requirements include:
- The business is at least one year old
- Annual gross revenue of $100,000 or more
- A business checking account with a FICO score of 600 or higher.
You will receive a loan ranging between $5,000 and $250,000 within 24 hours and have a 24-month grace period. Hence, OnDeck is suitable for small-to-medium-sized enterprises (SMEs).
However, OnDeck does not serve some industries and does not lend to businesses in Nevada, North Dakota, or South Dakota. OnDeck’s average rate for term loans is 54.96% APR, and the average rate for lines of credit is 47.14% APR.
A list of B2B lending companies is never complete without mentioning Resolve Pay. The company offers various financial services such as accounts receivable automation and invoice factoring.
Most business-to-business lenders focus on lines of credit and term loans to finance small businesses. Resolve is a game-changer as it has gone a step further to offer cash advances against outstanding invoices.
To qualify for invoice financing with Resolve, all you need is:
- A business that’s been in operation for a minimum of one year
- At least $50,000 in annual revenue
- Select invoices from reliable customers
- Analyze your customer’s creditworthiness for free
- Offer your customers a net term of 30, 60, or 90 days
The great thing about Resolve is that it will process your invoices within a day. What’s more, you will receive cash advances at a low-interest rate of 2.61% for 30-day net terms. That makes it ideal for refinancing a high-interest loan.
Small-to-medium-sized businesses can get up to a $150,000 line of credit and term loans from Fundbox to help beef up their working capital. As a B2B loan provider, Fundbox gives you repayment of over:
- 12 or 24 weeks for lines of credit
- 24 or 52 weeks for term loans
Fortunately, Fundbox has no loan origination fee and no prepayment penalty. To qualify for Fundbox’s line of credit and business loans, you must meet the following:
- 6+ months in business.
- Annual revenue of $100K or more
- Have a 600+ personal FICO score
- Business checking account
- Your business is in the United States
Fundbox will help manage your cash flow without buying the invoices depending on the invoice value and your credit risk.
With interest rates as low as 4.8%, a credit line of up to $250K, and less than 5-minute processing times, BlueVine is a colossus in the B2B lending industry. Celtic Bank issues BlueVine’s flexible line of credit while FCIC is the underwriter.
The basic requirements to qualify for BlueVine funding are:
- 6+ months in business
- A monthly income of $10,000
- FICO score of 600 or higher
- Operate or incorporated in an eligible US state
These requirements make BlueVine suitable for entrepreneurs and small-business owners who need short-term loans. BlueVine allows you to build your business credit with every repayment and up to 12 months to repay your loan.
You can borrow up to a $500,000 pre-approved business loan, with repayments stretching 48 months from Dealstruck. If you need a large loan with long grace periods, Dealstruck is the best deal so far.
As a B2B lender, Dealstruck offers business owners against their lines of credit. It also provides small business loans with fixed interest rates of as low as 9.99%. To qualify for Dealstruck’s lending options, you must have at least:
- A personal credit score of 600+
- One year in business
- $150,000 in annual revenue
The faster and earlier you repay your Dealstruck loan, the lower the interest rates and monthly repayments.
Powered by American Express, Kabbage offers a line of credit to both small and medium-sized business owners. You can get a small business loan of $1,000-$150,000 in 10 minutes, with a repayment period of 18 months if you have:
- Been in business for at least a year.
- At least $50,000 annual revenue.
- A personal credit score of 640+.
- Business checking account or online payment platform such as PayPal.
It can take up to 3 business days for your bank to process the cash deposit made by Kabbage into your bank account. Kabbage charges a 1%–3% monthly fee on the amount you use as long as you have an outstanding balance.
- Although there is typically a borrowing limit for bank loans and lines of credit, there is none for Resolve’s invoice financing. With Resolve’s B2B financing, you will receive cash advances for up to 90% of your unpaid invoices.
- You do not need an impressive credit history to qualify for financing. All you need is to provide invoices from reputable business customers.
- Resolve has a net term management team that conducts credit checks and advises which of your business customers deserves 30, 60, or 90 days net terms.
- With Resolve’s invoice financing, debt management and collection burden lie with the lender, while other options force you to chase after payments.
- The other B2B lenders charge exorbitant interest rates. After considering your invoices, Resolve will give you cash for as low as 2.61% for 30-day net term invoices.
- Unlike traditional invoice factoring, which can be costly, have complicated fee structures, and outright hidden charges, Resolve is more transparent as it informs you of the charges upfront. The no hidden charges make Resolve the most customer-friendly option in the industry.
- Resolve’s non-recourse financing completely de-risks you from floating net-term invoices. Thus, Resolve’s financing type is not a loan, making it an ideal B2B lending option for startups, SMEs, and large companies.
Receiving funding from financial institutions from traditional lenders is no cakewalk. They have notoriously strict qualification requirements, but there is recourse in Fintech companies.
Although the industry is awash with B2B lenders, not all will fit your needs. You need a line of credit or business loan with reasonable annual percentage rates, sensible application requirements, quick approval times, and lengthy repayment periods.
If you fancy focusing on building your business instead of struggling with high interest, debt collection, and management, choose Resolve. Apply today and be among the 1000+ companies receiving 90% cash for approved invoices.