SoFi is expanding beyond consumer lending with the launch of SoFi Small Business Loans, giving entrepreneurs a new option for financing their businesses.
The loans come with no application or origination fees and fast funding, but they may not be the best fit for every business. Here's how SoFi's new offering stacks up against other small business lenders.
SoFi small business loans
Types of loans
SoFi offers small business loans for all sorts of needs, including the below:
- Expansion loans for growing your business
- Working capital to run your business every day
- Payroll financing to cover payroll and invoices
- Startup financing to, well, get started
- Offers funding in as little as 24 hours
- Doesn't charge application fees, origination fees or prepayment penalties
- Two-year repayment terms are on-par with terms of other lenders
- Offers four types of small business loans
- SoFi members can access benefits like access to one-on-one wealth planning sessions and competitive APY earnings on banking products
- Borrowers can only apply for up to $250,000; other lenders have higher limits on funding amounts
Loan amounts
SoFi's loan amounts range from $2,500 to $250,000. That may be enough for many small businesses, but companies with larger financing needs can find lenders that offer up to $1 million or more.
Term lengths range from 12 to 24 months, which is pretty on par with that of other lenders in the space.
Funding timeline
According to SoFi's website, you can receive funding in as little as 24 hours after your SoFi Small Business Loan application has been approved, provided that you've signed the loan agreement by 2:45 p.m. ET. However, as with any other loan or lender, submitting incomplete or inaccurate information can cause delays in funding, and timing is not guaranteed.
Fees
SoFi Small Business Loan borrowers won't pay an application fee, origination fee or any prepayment penalties for paying off their loan early. There is interest charged on the loan just like with any other form of debt.
Eligibility
Much like other small business lenders, SoFi considers a mix of factors for approving your application, including your credit score, business revenue and credit profile, as well as expenses. The exact credit score requirements are not publicly disclosed; however, SoFi may ask applicants to provide at least three months' worth of business bank statements to get a snapshot of your business' overall health.
How SoFi compares
SoFi's Small Business Loan is a solid choice for entrepreneurs who need funding to get started. But, depending on just how much you need, other lenders might be a better choice.
For example, Biz2Credit offers funding as high as $2 million-plus, depending on the type of financing needed. Fora Financial has financing up to $1.5 million and offers prepayment discounts.
We like Biz2Credit's easy application process and high loan caps. And it charges simple, not compound interest, which can mean big savings for term loans. But the approval requirements make it a bad fit for startups with modest sales or in business for less than six months.
- Up to $6 million-plus available for revenue-based financing
- Funds available in as little as 24 hours
- Discount available if you link your business checking account
- Offers commercial real estate loans
- $25,000 lending minimum may be too high
- Financing requires collateral or a personal guaranty
Offers many types of loans including small business loans and revenue advance
- Higher loan limits than many competitors
- Low minimum credit score
- Next-day funding available
- Prepayment discount
- Borrowers can increase their loan amount after repaying at least 60%
- Charges a factor rate rather than a traditional APR
- Daily/weekly repayment schedule
- 3% origination fee
If you don't have great credit and still need a large amount of financing, Credibly's small business loans go up to $600,000 and considers applicants with a FICO Score as low as 500.
Offers many types of loans including long-term loans, working capital loans, business line of credit and merchant cash advance
- 500 credit score minimum
- Funds may be available within four hours
- User reviews praise customer service
- Prepayment discount available
- High monthly revenue required
- Potential for high factor rates
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