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IOU Financial business loans review

Short-term financing up to $500K for retail or e-commerce businesses.

This online lender specializes in short-term working capital loans for retail or e-commerce businesses that’ve had trouble getting approved elsewhere. It has a high approval rate, and every borrower pays the same interest rate — regardless of your revenue or credit score.
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Min. Amount$10,000
Max. Amount$500,000
Loan Term6 to 24 months
APR8.8% to 9.5%
Requirements1+ year in business, $100,000+ annual revenue, average daily bank account balance of $3,000+, retail or e-commerce business with 10+ deposits a month, own at least 80% of business

First, do I qualify?

You must meet the following criteria at a minimum to qualify for a small business loan from IOU Financial:

  • Retail or e-commerce business
  • At least one year in business
  • $100,000 annual revenue or higher
  • Average daily balance of $3,000 in business bank account
  • At least 10 monthly deposits in bank account
  • Own at least 80% of business
  • Not located in Montana, Nevada or Washington, DC

IOU Financial might have additional requirements that can affect your application.

What makes IOU Financial business loans unique?

IOU Financial is one of the the few business lenders that offers the same flat rates, origination and administrative fees to all customers. This could make it a good option if you’ve struggled to get a competitive rate in the past.

But it might not be the best choice if you have excellent credit and an established track record of strong revenue spanning a couple of years. In that case, you can likely find a better deal elsewhere.

What is an IOU Financial business loan?

An IOU Financial business loan is a short-term unsecured loan meant to cover day-to-day expenses or help you grow. You can borrow between $10,000 and $500,000 and repay it over terms of 6 months to 2 years. Everyone pays the same 9.5% interest rate and fees. The fees include:

  • Origination fee: 8.8% 
  • Administrative fee: $395
  • Guarantee fee: Varies

Almost half of borrowers use the loan to buy equipment, while other popular uses include business expansion, cashflow financing and inventory. While it doesn’t require collateral, business owners must make a personal guarantee, promising to pay the loan back if the business can’t.

What are the benefits of an IOU Financial business loan?

From its flat rates to its option for renewal, here are a few perks of taking out an IOU Financial business loan:

  • High approval rate. IOU Financial claims that 85% of applicants get approved.
  • Same rates for everyone. Everyone pays the same 9.8% interest rate on its business loans.
  • Renewal available. You can apply to renew your loan after repaying 40% of your balance.
  • Easy to reach. We were able to quickly get answers to most of our questions about IOU Financial by using the live-chat feature on its website.

What to watch out for

Consider these potential drawbacks before borrowing from IOU Financial:

  • Lots of fees. IOU Financial charges more fees than your typical online business loan.
  • Lack of transparency. This lender doesn’t display the interest rate or guarantee fee on its website — and its loan calculator doesn’t give an estimated APR.
  • Daily or weekly repayments. Repayments this frequent can cramp some business’s cash flow, which is why there’s a daily minimum balance requirement.
  • Not available in all states. IOU Financial doesn’t lend to businesses in Montana, Nevada or Washington, DC.

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IOU Financial reviews and complaints

BBB accredited Yes
BBB rating A+
BBB customer reviews 3.8 out of 5 stars, based on 3 customer reviews
BBB customer complaints 1 customer complaints
Trustpilot Score 4.7 out of 5 stars, based on 422 customer reviews
Customer reviews verified as of 12 October 2020

IOU Financial has mostly positive customer reviews as of November 2019. It scores 4.8 out of 5 stars on Trustpilot, based on over 360 reviews. Three customers gave it a (relatively meaningless) average of nearly 4 out of 5 stars on the Better Business Bureau (BBB). The BBB also gives it an A+ rating, based on factors like advertising practices and time in business.

Customers were mostly pleased with how efficient the process was, and many praised customer service for being up front about how the loan worked. However, a few customers complained that it took longer than expected and that IOU Financial didn’t disclose all fees.

How do I apply?

You can apply for a business loan with IOU Financial online. First, check the requirements to make sure you qualify. If you do, follow these steps to apply:

  1. Go to the IOU Financial website.
  2. Click Apply Now.
  3. Fill in the fields with basic information about yourself and create a password. Click Continue.
  4. Complete the form with information about your business and the loan you’d like to borrow. Click Continue.
  5. Enter the required information about yourself.
  6. Review and agree to the disclosures and click Continue.
  7. Follow the directions to submit the application.

What happens after I apply?

You should receive a credit decision a few seconds after you submit the form. If approved, follow the directions to submit any additional required information to complete your application.

Review your loan offer to make sure you understand the terms and conditions before returning the signed contract. Typically, you can get your funds in between 24 and 48 hours.

What documents do I need to apply?

It depends on your business and your application. IOU financial doesn’t specifically require any documents, but you might need to submit recent bank statements and financial statements when you apply for the loan to verify your business’s revenue.

How do repayments work with IOU Financial?

IOU Financial charges daily or weekly repayments, depending on which you signed up for. It typically draws repayments from your business bank account when they’re due.

If you don’t have enough funds in your account, you’ll have to pay a $25 nonsufficient funds fee. If you have any questions or concerns about your loan, reach out to customer service by calling 866-217-8564.

Not sure IOU Financial is right for you? Compare more lenders with our guide to business loans.

Frequently asked questions

Review by

Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 1,000 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.

Expert review

IOU Financial’s short-term working capital loans are best for retail and e-commerce businesses with steady cash flow that have struggled to qualify for financing elsewhere. Everyone gets the same rate — regardless of your revenue or credit score. And it has mostly positive customer reviews.

But it charges more fees than many other providers out there. And the daily or weekly repayments can be difficult to afford during your business’s slow season.

Not sure IOU Financial is right for you? Compare your other business loan options below.

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