Balboa Capital Review

Balboa Capital Corporation, founded in 1988, provides multiple financing options for small businesses. Their products include:

• Small business loans
• Equipment leasing
• Commercial financing
• Vendor financing
• Franchise financing
• Business lines of credit

Balboa Capital has relaxed credit score requirements, making their products available even to business owners with low credit scores. They also quickly process approvals.

Balboa works primarily with established businesses already generating high revenue, so they’re not a good fit for new startups. Additionally, they don’t disclose their rates directly on their website, and their rates can vary with your term length, credit score and other factors, making it difficult to get an accurate comparison of Balboa Capital rates with other lenders. Their online reviews also contain a large number of customer complaints.

You might be in Balboa Capital’s target market if you:

• Need capital up to $250,000
• Have been in business for at least 1 year
• Generate at least $300,000 in annual revenue
• Struggle to find other forms of financing due to a lower credit score

Balboa Capital offers small business loans up to $250,000. When qualifying applicants, Balboa places more weight on your revenue and ability to repay your loan than on your credit score. This allows them to extend loans to applicants who have lower credit scores, provided you can generate sufficient revenue to repay your debt.

You can use Balboa loans for a variety of purposes, including:

• Covering payroll
• Paying suppliers
• Paying for inventory
• Expanding your business
• Marketing
• Paying business taxes

Balboa Capital small business loans feature:

• Amounts up to $250,000
• Terms from 3 to 18 months
• No collateral requirements

Balboa does not directly disclose their interest rates on their site. Instead, they provide an online business loan calculator you can use to estimate monthly repayments for a selected loan amount over a given period. For instance, for a $30,000 loan, the calculator returns monthly payments of:

• $5,600 over 6 months, equivalent to $33,600, or 12% interest
• $3,800 over 9 months, equal to $34,200, or 14%
• $2,950 over 12 months, equal to $35,400, or 18%

For a $250,000 loan, it returns:

• $46,667 over 6 months, equal to $280,002, or 12%
• $31,667 over 9 months, or $285,003, or 14%
• $24,583 over 12 months, equal to $294,996, about 17.8%

These examples give some sense of Balboa’s rates. They also illustrate how variables such as term length can affect your rates.

In addition to business loans, Balboa Capital also offers several other types of financing:

• Equipment leasing
• Commercial financing
• Vendor financing
• Franchise financing
• Business lines of credit

Equipment Leasing

Balboa provides leasing for all types of equipment, from machinery to vehicles to software. Equipment leases feature:

• Amounts up to $250,000
• Flexible term lengths starting at 24 months and up
• No collateral required

Balboa does not directly provide rates for equipment leases, but illustrates examples with an online calculator. For a $30,000 lease, the calculator returns payments of:

• $623 for 60 months, equivalent to $37,380 or 24.6%
• $747 for 48 months, equal to $35,856, about 19.5%
• $954 for 36 months, equal to $34,344, about 14.5%
• $1,371 for 24 months, equal to $39,204, about 9.7%

For a $250,000 lease, the calculator returns:

• $4,604 for 60 months, equivalent to $276,240, about 10.5%
• $5,645 for 48 months, equal to $270,960, about 8%
• $7,381 for 36 months, equal to $265,716, about 6%
• $10,856 for 24 months, equivalent to $260,544, or 4.2%

Commercial Financing

Balboa commercial financing provides capital for purposes such as equipment purchases, technology upgrades and company expansions. Commercial financing features:

• Transactions up to $100 million
• Flexible term lengths starting at 24 months and up
• Capital equipment financing
• Operating leases
• Lease lines of credit

Balboa does not disclose commercial financing rates directly, but illustrates rates through a calculator tool. For $30,000 of commercial financing, the calculator returns payments of:

• $1,371 for 24 months, equal to $39,204, about 9.7%
• $954 for 36 months, equal to $34,344, about 14.5%
• $747 for 48 months, equal to $35,856, about 19.5%
• $623 for 60 months, equivalent to $37,380 or 24.6%

For $250,000, the calculator returns:

• $10,856 for 24 months, equivalent to $260,544, or 4.2%
• $7,381 for 36 months, equal to $265,716, about 6%
• $5,645 for 48 months, equal to $270,960, about 8%
• $4,604 for 60 months, equivalent to $276,240, about 10.5%

These are the same rates as Balboa’s equipment leasing rates.

Vendor Financing

Balboa’s vendor financing program helps equipment vendors provide financing to their customers. It extends Balboa’s equipment leasing program to customers of third-party vendors. Vendors can use Balboa’s financing technology as well as tap into Balboa marketing resources under their own private branding label.

Franchise Financing

Balboa offers financing for franchises in industries such as:

• Restaurants
• Fast casual dining
• Hospitality
• Fitness

Franchise financing can be used for purposes such as:

• Franchise remodeling
• New equipment purchases
• Property improvements

Balboa’s franchise financing features:

• Financing plans up to $1 million
• Franchise loans up to $1 million
• Credit lines up to $500,000
• Terms from 24 to 84 months

Balboa does not disclose its franchise financing rates, but only describes them as “competitive.”

Business Line of Credit

Balboa provides companies with business lines of credit. Similar to credit cards, credit lines can be spent up to a set limit on a revolving basis as long as monthly payments are made, for the duration of the line’s term.

Balboa lines of credit feature:

• Amounts up to $250,000
• Terms from 6 to 18 months
• Only pay for amounts you withdraw, plus interest(10)
• Weekly or monthly repayment options
• No collateral needed

Balboa’s website does not disclose its credit line rates, only stating that they vary with your time in business, credit rating and revenue.

To apply for Balboa Capital funding, you begin by filling out an online form. The form requests basic information, such as:

• How much you need
• Your business contact information
• How long you’ve been in business
• Your annual revenue

When you initially submit your application, Balboa Capital performs a “soft pull” on your credit to verify that you meet their minimum requirements. This does not get recorded on your credit report and does not affect your score. However, if you prequalify, Balboa will contact you requesting additional information and supporting documentation before making you an offer that matches your revenue and credit score. If you continue beyond this point and accept their offer, they will perform a “hard pull” on your credit to continue the qualifying process. This does get recorded on your credit report and can affect your score.

If all your documentation is in order and you pass your credit check, Balboa will then authorize the deposit of funds to your bank account. The complete process from application to funding can take as little as 3 days.

Balboa Capital offers a few striking features:

• Variety of financing options
• Equipment financing specialty
• Willingness to work with business owners with low credit scores
• Simplified application process

However, Balboa’s cons also draw attention:

• Geared towards larger companies, unsuitable for smaller firms or new start-ups
• Lack of clarity about rates
• Undisclosed origination fees
• Hard credit pulls
• Poor online reputation, with a large volume of customer service complaints

This last item particularly gives cause for pause. Balboa’s Better Business Bureau reviews include 50 customer complaints over issues such as unclear contract terms, billing disputes, non-responsive customer service and rude representatives, as well as one resolved government action for operating without a license and failing to file an annual report. The Balboa Capital BBB rating ranks only 1 star.

To qualify for Balboa’s small business loans, equipment leasing, vendor financing, franchise financing you need:

• Time in Business 1+ Years
• Annual Revenue $300,000+

Balboa doesn’t list requirements for its commercial financing product. Customers of clients using Balboa’s vendor financing program must meet the same terms as Balboa’s equipment leasing product. For business lines of credit, you must have been in business one year and meet annual revenue requirements, and a good credit score will also improve your odds of qualifying.

Balboa doesn’t require a minimum credit score. However, the better your credit score, the better rates you’re likely to get. Balboa also considers your Paydex score, which uses a scale of 0 to 100 to track your history of your last 12 months of payments to parties such as vendors, suppliers and lenders.

Balboa Capital Application: What You Need to Apply

Balboa requires:

• Verification of income in the form of recent bank statements
• Verification of business ownership in a form such as a business license

Larger financing requests may require additional documentation such as financial statements and tax returns

On the surface, Balboa Capital seems like a potential financing source for established businesses, particularly those looking for equipment financing. However, there is a number of customer complaints about this lender.

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