Smarter Loans Business Loans Review: Is It Legit and What Does It Cost?
- APR Range
- From 7.00%
- Loan Amount
- $2,500 - $50,000,000
- Loan Term
- 2 - 96 months
Our verdict
Compare business loans from a network of 18 lenders with a single application, but be warned that some financing options are expensive.
If your business can’t qualify for bank financing and you’re looking for a convenient way to compare alternative lenders, Smarter Loans is worth checking out. This loan comparison site connects you with a network of 18 business lenders; all you have to do is fill out one application to find out which loan offers you’re eligible for.
Smarter Loans is free to use, and several lenders in its network work with borrowers who have less-than-perfect credit. Just be aware that you’ll need to have been in business for at least 6 months to qualify with most lenders, and Smarter Loans business financing can be more expensive if you don’t have good to excellent credit.
Pros
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Free to get matched with a lender
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Quick funding
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Loans up to $50,000,000 available
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Single online application to compare multiple offers
Cons
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High rates for bad credit
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Not a direct lender
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You’re limited to the Smarter Loans network of partner lenders
Is Smarter Loans legit for business loans?
Yes, Smarter Loans is a 100% legit option if you’re looking for a business loan.
Smarter Loans is a Toronto-based comparison site that first launched back in 2016. Rather than working as a direct lender, it acts as the middleman between you and its network of lending partners.
When you fill out a single application on this business loan marketplace, you can get pre-qualified for loan offers from lenders in the Smarter Loans network. The platform is free to use for borrowers, and instead makes money on commissions from lenders when loans are finalized.
Smarter Loans has an average rating of 4.3/5 stars from 350+ Google reviews. It also has an A+ rating from the Better Business Bureau, but it’s not BBB accredited.
Pros
- Free platform. It doesn’t cost you anything to apply with Smarter Loans and get matched with lenders.
- Compare offers from multiple lenders. One Smarter Loans application reaches a network of 18 business lenders, including providers such as Merchant Growth, Journey Capital, Greenbox Capital and Advance Funds Network.
- Multiple financing options. A Smarter Loans business financing application can connect you with term loans, lines of credit, merchant cash advances, invoice factoring and equipment financing all in one place.
- No impact to your credit. Checking your business loan options with Smarter Loans doesn’t affect your credit score.
- Obligation-free. Once you get pre-qualified with a lender, there’s no obligation to proceed with an application unless you’re sure the loan is the right fit for your business.
Cons
- Merchant cash advances are expensive. Many of Smarter Loans’ business lenders offer merchant cash advances, which can cost far more than a traditional term loan.
- Best for established businesses. Most lenders need you to have been in business for at least 6 months and have steady monthly sales to qualify, so brand-new businesses may have few funding options.
- Personal guarantee often required. Many loan products available through Smarter Loans’ lending network require you to provide a personal guarantee, even for incorporated businesses, which means putting your personal assets and credit history at risk.
- Not a direct lender. Smarter Loans is a loan comparison site rather than a direct lender, so the rate, fees and terms of your loan are set by whichever lender you qualify with.
Alternatives
8.1 Great
APR
Starting at 8.00%
Loan Amount
$10,000 - $1,000,000
Loan Term
3 months - 24 months
7.9 Great
APR
12.99% – 39.99%
Loan Amount
$5,000 - $800,000
Loan Term
6 months - 24 months
How much does a business loan through Smarter Loans cost?
Smarter Loans business loans come with APRs ranging from 7%. The rate you get varies depending on factors such as the financing product you choose, your time in business, whether you have a history of steady deposits into your business bank account, and whether you have any existing debt.
It’s also worth noting that merchant cash advances use a factor rate instead of an APR, and lenders in the Smarter Loans network commonly charge factors ranging from 1.1 to 1.5. To give you an example of the costs involved, a $20,000 advance at a factor of 1.3 means you will have to pay back $26,000. And remember: repaying a merchant cash advance early won’t save you any money.
The other cost you need to consider arises if the Smarter Loans business financing option you choose requires a personal guarantee. This guarantee means that as the business owner, you will owe the debt personally if the business can’t pay. That of course can have serious consequences for your personal financial situation.
Who qualifies for a business loan through Smarter Loans?
The exact eligibility criteria vary between lenders, but to qualify for a loan you will need:
- To have been in business for 6 months.
- Monthly revenue of $10,000/month.
- A Canadian business bank account.
A couple of lenders in the Smarter Loans network accept businesses that have been trading for at least 3 months, but most want you to have been operating for a minimum of 6 to 12 months. So if you’re running a startup, you may need to consider other options.
Can I get a business loan through Smarter Loans with bad credit?
Yes, it’s still possible to qualify for Smarter Loans business financing even if you have bad credit. Many alternative lenders will focus on your revenue and cash flow, not your credit score, to determine whether you can afford a loan. They look mainly at your sales and whether you receive regular deposits into your account, so bad credit won’t necessarily stop you from getting funded.
But there are other reasons why your application may be declined. Common reasons include bounced payments resulting in NSF charges on your account, fluctuating income or too little time in business. And if you already have a merchant cash advance, the ongoing debits on your account will also hurt your chances of approval.
The other thing to remember is that a lower credit score means your loan will cost more. You’ll typically need to settle for a higher interest rate, or you’ll often be offered a more expensive cash advance rather than a term loan. Learn more in our guide to bad credit business loans.
Does Smarter Loans check your credit, and who sees your application?
Smarter Loans says that filling out an online business loan application involves a soft credit check rather than a hard pull on your credit file. But if you’re matched with a lender and you decide to proceed with a full application, the lender may then run a hard credit check.
We tested the Smarter Loans application process for ourselves. After filling out the online form, we were told that we’d been pre-qualified for a loan from one of its lending partners, and that lender would contact us to discuss the loan within 24–48 hours.
It’s worth noting that your Smarter Loans application goes to several lenders, so be prepared to receive calls and emails afterwards from lenders who want to discuss your borrowing options.
How to apply for a business loan through Smarter Loans
If you’d like to apply for Smarter Loans business financing, here’s how:
- Click Get Funded on the Smarter Loans business lending website.
- Start the application by providing your name, contact details and date of birth.
- Enter the loan amount you would like to receive.
- Provide your business revenue details, including your total annual revenue and your time in business.
- Select the reason why you are applying for business financing.
- Enter your home address and then your business address.
- Provide business details including your business name, industry and how many employees you have.
- Estimate your credit score.
- See which loan offers you are pre-qualified for.