LenCred Review

Founded in 2001, LenCred Inc. provides multiple financing options to small businesses, including lines of credit, equipment financing and Small Business Administration (SBA) loans. The company’s proprietary technology matches borrowers to a network of lenders.

LenCred provides $25,000 to $200,000 to companies that need cash to start or build their business. Because the company works with a variety of lenders, the company offers a range of financing options, including alternatives for new businesses and business owners without good credit. However, LenCred charges high fees and its lender-matching process can generate multiple credit checks that may hurt your credit rating.

You might be in LenCred’s target market if you:

• Need credit lines from $25,000 to $150,000 or more, equipment financing from $1,000 to $5,000,000 or SBA loans from $5,000 to $5,000,000
• Earn $0 to $250,000 in annual revenue
• Have a good credit score
• Don’t qualify for less expensive options from other sources

LenCred helps small businesses connect with lenders providing business lines of credit. Similar to a credit card, a LenCred business line of credit provides you with access to a fixed amount of cash you can spend up to the designated limit. As with a credit card, you can keep repaying what you spend and — keep spending it again.

LenCred business lines of credit feature:

• Amounts from $25,000 to $150,000 or more
• No term limits
• Introductory interest rates as low as 0% for the first 6 months to 12 months, meaning you can avoid interest payments if you pay your debt back within that time
• Unsecured credit lines, meaning you don’t have to provide a deposit as collateral

Because their technology matches applicants to a network of third-party lenders, LenCred fees will depend on your credit rating as well as the offer extended by your matching lender.

LenCred’s line of products includes equipment financing options. Equipment financing can come in the form of equipment leases or equipment loans:

• With equipment leases, you pay a monthly fee to borrow equipment for a set term, and at the end of the term, you have the option of returning, buying or upgrading the equipment
• With equipment loans, you borrow money to purchase equipment and agree to repay the amount you borrow plus interest

Equipment leases work best when you only need equipment for a short time or when the equipment you’re using tends to have a short life span or tends to become outdated quickly. For instance, because computer technology becomes outdated rapidly, leasing equipment may prove less costly than purchasing it outright. Equipment loans work best when you plan to buy equipment that will last 5 years or more, typical in industries such as construction.

LenCred equipment financing options feature:

• Amounts from $1,000 to $5,000,000
• Varying interest rates
• Options to purchase the equipment at the end of your term

At the end of an equipment financing term, most lenders in LenCred’s network let small business owners purchase equipment for prices ranging from $1 to 10% of fair market value, depending on the nature of the equipment.

LenCred’s network of lenders includes providers who facilitate Small Business Administration loans. Geared toward helping smaller businesses, these loans offer better rates than many loan products.

LenCred supplies access to a full range of SBA loans, including:

• 7(a) loans, which can be put towards a wide variety of uses
• Certified Development Company (CDC)/504 loans, which help small business owners purchase facilities
• CAPLines, which are lines of credit for fulfilling contracts and purchase orders
• Export loans, designed for companies that handle international exports
• Microloans, which are smaller loans designed for startups and very small companies that have trouble obtaining conventional loans
• Disaster loans, which assist business owners recovering from physical or economic disasters, such as hurricanes

LenCred SBA loans feature:

• Amounts from $5,000 to $5,000,000
• Terms, interest rates and qualifications varying by loan product and lender

Note that SBA loan rates fluctuate with market conditions.

The LenCred application process begins with filling out an online form. The form requests basic information:

• How much funding you’re seeking
• Your contact information
• Your personal credit rating, expressed in general terms such as poor, fair, good or excellent
• How long you’ve been in business

When you apply, you also give LenCred consent to contact you by telephone or messages.

Filling out this online form won’t affect your credit rating at this point. LenCred only does a “soft pull” on your credit, which doesn’t get recorded on your credit report and doesn’t hurt your score. However, if you continue beyond this step and apply for offers from lenders in LenCred’s network, these lenders will check your credit score. This will generate multiple “hard pulls” on your credit, which get recorded on your credit report and can lower your credit score, according to third-party reviewers and the Better Business Bureau.

Before you apply for offers from its partners, the LenCred walks you through a funding consultation with one of their business financing advisers. This consultation will include a review of your credit rating and suggestions on how to improve your creditworthiness. LenCred’s site includes information on how to improve your credit rating.

After your consultation, LenCred will match you to offers that fit your credit score. If you decide to apply for an offer, your prospective lender will do a hard pull on your credit report, and you will need to submit supporting documentation. If you prequalify, LenCred will contact you with an offer.

• Variety of financing options, including SBA loans
• No minimum revenue requirement
• Works with startups
• Free consultation on your credit score

• Lack of transparency about rates
• Varying rates depending on which lender you get matched with
• High origination fees
• Multiple hard credit pulls that can lower your credit score

What you need to qualify for LenCred financing varies with the type of product you’re applying for and the lender you get paired with. Typically, LenCred partners consider:

• Your personal credit score, with a score of more than 700 needed for startups applying for SBA loans
• Your ability to repay your debt
• Your ability to invest your own funds
• Your access to collateral
• Experience in management

LenCred Application: What You Need to Apply

Lenders in the LenCred network require varying types of documentation for different types of financing. Depending on your offer, you may need to submit:

• An up-to-date business plan
• Business tax returns
• Personal tax returns
• Business bank statements
• Year-to-date financial statements
• A company debt schedule outlining all the money you’ve previously borrowed from lenders
• Contracts you have with other companies
• Accounts receivable aging reports documenting unpaid invoices you are owed
• A personal financial statement
• A list of business and personal collateral

LenCred’s approval process focuses heavily on a borrower’s personal credit rating.

If you’re struggling with poor credit, you won’t be able to qualify for good rates from LenCred’s network of lenders. If you have good credit, LenCred’s policy of triggering multiple hard pulls can hurt your credit score and may make it more difficult for you to get financing from other lenders.

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