Alternative fundingwith competitive rates for small businesses and startups in 13 southern states.
Bank loans aren’t much help until you’ve made it big. But for now, there’s always alternative sources of financing that include online lenders, crowdfunding and nonprofits.
We take a look at LiftFund, a nonprofit lender that specializes in helping businesses in underserved areas get off the ground.
|Product Name||LiftFund Business Loans|
|Min Loan Amount||$500|
|Max. Loan Amount||$1,000,000|
|Min APR||From 4%|
|Minimum Loan Term||5 years|
- Be at least 21 years old
- Live and operate your business in a state LiftFund serves
- Have another source of income if your business is a startup
- Not operate in the adult entertainment industry
- Not have filed for bankruptcy in the last two years
First, do I qualify?
LiftFund’s lending programs come with highly varied eligibility requirements.
To meet LiftFund’s most basic qualifications:
- You must be at least 21 years old.
- You must live and operate your business in a state LiftFund serves.
- If your business is a startup, you must show proof of another source of income.
You cannot get a LiftFund business loan if:
- You’ve filed for Chapter 7 bankruptcy in the past two years.
- You’ve filed for Chapter 12 bankruptcy in the past year.
- Your business is in the adult entertainment industry.
LiftFund offers small business loans in the following states:
- New Mexico
- South Carolina
What’s a LiftFund business loan?
A LiftFund business loan is financing designed to help small businesses and startups cover relatively small expenses.
Through LiftFund, you can get an:
- SBA 7(a) loan. Your standard fixed-term loan but with low interest rates, thanks to government backing.
- SBA 504 loan. A low-interest government-guaranteed loan for commercial real estate and equipment loans.
- Goldman Sachs Houston and Dallas loans. A program that offers loans of $50,000 to $400,000 to cover a variety of business needs. It’s best for larger, more established businesses that can prove they create jobs in economically disadvantaged areas.
- Fresh loans. Microloans for food industry businesses that promote the availability of fresh, healthy meals in food deserts.
What makes LiftFund business loans special?
LiftFund specializes in providing funding to small business that are either too new or don’t make enough revenue to get a bank loan. It’s a nonprofit, meaning that helping small businesses succeed is its bottom line. It’s also highly localized, so you might find a loan designed to meet your exact needs.
What are the benefits of a LiftFund business loan?
- Lower credit scores OK. Many of LiftFund’s borrowers have low credit scores, in part because it considers factors like your financial history and your business’s community impact when making decisions.
- Excellent customer service. If you have questions, you can easily call a rep in your area. Or send a form email — but it might take a while to get a response.
- Easy application. Applying online is quick and straightforward, and you’ll always have someone to guide you through the process.
What to watch out for
That LiftFund is a nonprofit means it generally has your best interests in mind. It also means that the application process is a lot more involved — they have to absolutely justify giving you funds.
Here are potential drawbacks of getting a business loan from Liftfund:
- Available in 13 states only. Look at other microlenders if your business isn’t in the South.
- It takes a long time to get your funds. You might have to wait up to four weeks for funding on a regular loan and eight weeks for a government-backed loan.
- It’s website lacks basic information. It’s easy to apply, but LiftFund’s site lacks general loan information, like terms, fees and even specific interest rates.
- Loans require collateral. Collateral is not always a bad thing — it could result in lower rates — but prepare to put some of your personal assets on the line.
Compare LiftFund to other business loan providers
Is LiftFund safe?
LiftFund is not accredited by the Better Business Bureau and doesn’t have a BBB rating. Nobody has reviewed it on Trustpilot either.
A lack of online reviews could be a result of LiftFund’s nonprofit status, which means that it’s highly localized. Borrowing from a nonprofit is not without its problems, but they’re generally designed to help business communities, rather than profit from them.
LiftFund applies the standard security features of most websites. But it don’t appear to apply extra security for their applications, which could be a red flag.
Am I eligible?
To apply for a loan with LiftFund, you must:
- Be at least 21 years old. While most lenders require borrowers to be over 18, LiftFund bumps up the requirement to 21.
- Live and have a business in a state LiftFund serves. LiftFund only serves businesses in 13 southern states.
- Have an income source outside of your business. This requirement applies to startups and is used to prove that you’re able to afford to repay your loan.
When considering your application, LiftFund looks at your ability to repay your loan, your character, your commitment to improve your business and your credit score. It also considers your history of payment to past lenders, landlords, suppliers and the like.
Its application is two steps: an application to apply for a loan, and its lending program application. The lending program includes many specific requirements. But you won’t be approved to move on to the second step if LiftFund believes you aren’t able to meet them.
How do I apply?
- Go to LiftFund’s website and click Apply Now.Once taken to the loans page, again click Apply Now.
- Answer basic eligibility questions and click Let’s Get Started.
- LiftFund reviews your application and documents over the next two business days, during which it pulls a hard check on your credit.
- Qualifying applicants receive a call from a LiftFund representative to go over loan programs you could be eligible for. Once you decide on a program, the rep provides a list of further documents required.
- After you submit your documents, an underwriter reviews them and notifies you of acceptance within a few days — or longer, if you apply for an SBA loan.
- Sign your closing documents and wait a few more days before receiving your funds.
- LiftFund’s lending process takes three to four weeks for regular loans and six to eight weeks for SBA loans.
What do I need to apply?
Have the following documents or information on hand before you start your application:
- Your Employer Identification Number. Apply for an EIN on the IRS’s website if you don’t already have one.
- Your Social Security or Individual Tax Identification number. Call the IRS to retrieve your ITIN, if you have one.
- Your driver’s license. Make sure it lists your current address.
- Contact information for your landlord or lessor. This info may not be required for your application, but you’ll need to submit it before closing.
- A recent credit report. If you don’t yet have a copy, it’s easy to request your credit report from each of the three major bureaus online.
- Information on employers if you work outside your business. LiftFund uses this info to verify outside income, especially for startups.
- References. You’ll need two references from colleagues, friends or family, along with their phone numbers.
- Monthly personal and business budget. LiftFund provides a template to help you prepare a budget based on your past three months of spending.
- Information on any joint applicants. They’ll also need to provide their EIN, SSN or ITIN and driver’s license information.
Scan ahead to save time.
LiftFund asks you to upload important documents, so it’s a good idea to scan and save them as PDFs before you get started.
I got a business loan from LiftFund. Now what?
LiftFund requires you to set up autopay when you sign your loan closing documents, so you won’t have to do much of anything.
But that doesn’t mean you can sit back. Keep an eye on your bank account to make sure it always has enough funds to make a monthly repayment. Otherwise, you might wind up paying stiff nonsufficient and late fees.
Struggling small businesses and startups in the US could benefit from a LiftFund business loan, especially if they’re in economically disadvantaged areas. But loans are limited to businesses in the 13 states LiftFund serves.
To make sure you get the best loan your business is eligible for, compare your full range of options before deciding on any one type of financing.