Merchant cash advances for e-commerce and SaaS startups.
Clearbanc offers merchant cash advances as an alternative to venture capital (VC) funding for e-commerce and consumer software-as-a-service (SaaS) entrepreneurs. Rather than giving up equity, business owners pay a flat fee. However, an inadequate website and customer service could make it difficult to narrow down important information before you apply.
|Product Name||Clearbanc merchant cash advance|
|Requirements||E-commerce or SaaS business, average of $10,000 monthly revenue, 6 months of revenue, LLC or corporation.|
- E-commerce or SaaS business.
- Average of $10,000 monthly revenue.
- 6+ months of revenue.
- LLC or corporation.
First, do I qualify?
You and your business must meet minimum requirements to qualify for a Clearbanc business loan:
- E-commerce or consumer software-as-a-service (SaaS) company
- Average monthly revenue of $10,000
- Six months of consistent revenue
- LLC or corporation
What makes Clearbanc business loans unique?
Clearbanc’s eligibility requirements are more relaxed than many business lenders, making its loans available to businesses as young as six months that might otherwise have to rely on VC funding.
What is a Clearbanc business loan?
A Clearbanc business loan is actually a merchant cash advance (MCA). It works like an advance on your future sales, which you repay plus a fee with a percentage of your revenue — between 1% and 35% depending on your cash flow. While Clearbanc doesn’t list fees on its website, Business Insider and several news sources report that it charges a 6% flat fee rather than interest.
Say your business takes out a $10,000 loan: A 6% fee brings your total loan cost to $600. After you receive the funds, Clearbanc takes a percentage of each future sale until you’ve repaid the full $10,600.
What are the benefits of a Clearbanc business loan?
- Low costs for an MCA. Fees on a merchant cash advance can run from 15% to 30%. Clearbanc’s reported fee is closer to the origination fee you’d get with a business lender that also charges interest.
- Startup friendly. While you can’t use this loan to start a new business, you need only six months of revenue to qualify.
- No credit check. This loan doesn’t involve a credit check, leaving your score unaffected unless you fail to repay the loan.
- Builds a relationship. As your business grows, Clearbanc can offer larger amounts of funding through a faster process.
What to watch out for
- Select businesses only. Financing is available to e-commerce and SaaS businesses registered as LLCs or corporations.
- Costs aren’t transparent. Clearbanc doesn’t advertise on its site the range of fees it charges, requiring you to apply first.
- Hard to reach. We weren’t able to talk with Clearbanc’s customer service team, despite many attempts — something customers also experience.
- Frequent repayments. Merchant cash advances take a percentage of your revenue to repay your loan, which can slow down your cash flow.
- Mixed reviews. Several customers online say they didn’t understand the terms and conditions before signing up for this loan.
Compare Clearbanc to other business loan providers
What do borrowers say about Clearbanc?
Borrowers haven’t said much online about Clearbanc as of April 2019. Clearbanc doesn’t have a page with the Better Business Bureau or Trustpilot. A few Reddit users were confused about its now-closed Uber program — several were surprised by fees. Some Airbnb hosts reported aggressive sales tactics and poor customer service.
However, not all reviews are negative: A few customers say they’d used Clearbanc a few times with good results, though they don’t provide details about their experience.
How do I apply?
Apply for a Clearbanc merchant cash advance through its website after confirming you meet the general eligibility requirements.
When you’re ready, follow five steps:
- Go to the Clearbanc website and click Get Started.
- Enter basic information about your business and yourself, and click Calculate Now.
- Follow directions to connect the online accounts you use to make sales and payments, and click Verify.
- Follow directions to connect accounts you use for online marketing. Click Continue.
- Enter a password to create a Clearbanc account. Click Create Your Account.
After creating your account, you should hear from Clearbanc’s investment team within one or two business days. Log in to your account to review offers and find instructions on to upload documents and complete the application.
The loan shows up in your bank account within 24 hours after approval. If your business has a Clearbanc Marketing Card, you’ll receive your funds immediately after approval.
What documents do I need to apply?
Required documents vary by business, but Clearbanc typically asks for:
- Articles of incorporation documents.
- Government-issued ID.
- Your employer identification number.
You must connect your online sales and marketing accounts, as well as your business’s bank account, to proceed.
I got a Clearbanc business loan. Now what?
Your repayments begin as soon as your revenue starts coming in. Clearbanc automatically deducts a percentage from your daily sales at a rate disclosed in your contract — between 1% and 35%. You can’t adjust your fee or repayment percentage after you sign your loan documents.
If you have questions or concerns, contact Clearbanc’s customer service team as soon as possible. Chat live on its website, email the team or call 855-813-2818 or 415-952 9864.
Clearbanc’s low-cost merchant cash advance could be an attractive alternative to equity funding for a business getting off the ground. But while it gives you the funds to grow, automatic repayments out of each sale can slow your cash flow.
If you’re on the fence, read our guide to business loans to learn about alternatives to Clearbanc.