Sound Credit Union business loans review November 2018 | finder.com

Sound Credit Union business loans review

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Financing from $500 with APRs capped at 10.15% — but only for Washington State businesses.

When your business only needs financing for a small project, Sound Credit Union could be one of the least expensive options out there. Many small-dollar business loans come with rates close to the triple digits, but Sound Credit Union’s stop at 10.15%. They’re only available to residents of the state of Washington, though, and new businesses aren’t eligible.
Product NameSound Credit Union Business Term Loans
Min Loan Amount$500
Max. Loan Amount$25,000
APR6.15% to 10.15%
Interest Rate TypeFixed
Maximum Loan Term6 years
RequirementsIn business 2+ years, credit union member
  • In business at least two years
  • Eligible for membership

First, do I qualify?

To be considered for a Sound Credit Union business loan, you must be:

  • In business at least two years
  • Eligible for membership

There are no minimum revenue requirements, but you’ll need to have a personal credit score of at least 700 to be eligible for the largest loan.

Membership eligibility

Business owners must be eligible for Sound Credit Union membership as an individual to become a business member. You must meet one of the following criteria:

  • Work, live or go to school in Washington
  • Work for one of its select employer groups
  • Be related to someone who meets one of the above requirements

What is Sound Credit Union?

Sound Credit Union is a nonprofit financial institution that serves residents and businesses located in the state of Washington. It offers several different types of business financing, including business term loans that start as low as $500 and go up to $25,000. Businesses can take as long as 6 years to pay back their loans, and APRs range from 6.15% to 10.15%.

There are no application, origination, prepayment or even late fees with these loans. Most loans are unsecured, meaning they don’t require collateral. But if your business needs the full $25,000, Sound Credit Union typically asks businesses to back the loan with an asset like equipment, inventory or real estate.

What makes Sound Credit Union business loans unique?

It’s not always easy finding a business loan under $5,000, but Sound Credit Union’s term loans start at $500. Even less common are small-dollar business loans with APRs that stop at 10.15% and no fees.

On top of this, there are few eligibility requirements — most loans have no revenue or credit score minimums. But established businesses with owners who have good credit are more likely to get approved.

What are the benefits of a Sound Credit Union business loan?

  • Competitive rates. The highest rate your business will pay on a term loan is 10.15%.
  • No fees. Sound Credit Union doesn’t charge any origination, prepayment penalty, returned payment or late fees — period.
  • Small amounts available. Your business can borrow as little as $500 from this nonprofit lender.
  • Online application. Not all credit unions let you apply for a business loan online — Sound Credit Union does.
  • No collateral on most loans. Your business won’t risk losing any of its assets unless you take out a $25,000 loan.

What should I watch out for?

  • Only available in Washington. Sound Credit Union only serves a small portion of American business owners: Washington State residents.
  • Not for startups. Your business needs at least two years under its belt to be eligible for a Sound Credit Union loan.
  • Membership required. All credit unions are member-owned institutions. Which, in this case, means you have to pay a small fee and open an account to be eligible for a business loan.

Compare other business loan providers

Rates last updated November 18th, 2018
Unfortunately, none of the business loan providers currently offer loans for these criteria.
Name Product Product Description Min Loan Amount Max. Loan Amount Requirements
LoanBuilder, A PayPal Service Business Loans
Customizable loans with no origination fee for business owners in a hurry.
$5,000
$500,000
Annual business revenue of at least $42,000, at least 9 months in business, personal credit score of 550+.
Credibly Business Loans
Funding to cover business expenses with daily or weekly repayments.
$5,000
$250,000
500+ personal credit score, 6+ months in business, $15,000+ average monthly deposits
National Funding Small Business Loans
Working capital loans and equipment financing, some high-risk industries may be eligible.
$5,000
$500,000
Be in business at least one year and make at least $100,000 in annual sales. Other loan types have additional requirements.
Lendio Business Loan Marketplace
Submit one simple application to potentially get offers from a network of over 75 legit business lenders.
$500
$5,000,000
Must operate a business in the US or Canada, have a business bank account and have a personal credit score of 560+.
LendingClub Business Loans
With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.
$5,000
$300,000
12+ months in business, $50,000+ in annual sales, no bankruptcies or tax liens, at least 20% ownership of the business, fair personal credit score or better
OnDeck Small Business Loans
A leading online business lender offering flexible financing at competitive fixed rates.
$5,000
$500,000
500+ personal credit score, 1+ years in business, $100,000+ annual revenue
Fora Financial Business Loans
No minimum credit score requirement and early repayment discounts for qualifying borrowers.
$5,000
$500,000
Business age 6+ months. Monthly revenue $12,000+. No open bankruptcies.
LendingTree Business Loans
Multiple business financing options in one place including: small business loans, lines of credit, SBA loans, equipment financing and more.
Varies by lender and type of financing
Varies by lender and type of financing
Varies by lender, but you many require good personal credit, a minimum business age and minimum annual revenue.

Compare up to 4 providers

What do customers say about Sound Credit Union?

There isn’t much about Sound Credit Union online as of October 2018 — not unusual for such a small financial institution. It’s accredited with the Better Business Bureau (BBB), which gives it an A+ rating based on factors like time in business and transparency. But the three customer reviews on its BBB page are negative, and 11 customers have filed complaints with the bureau.

It doesn’t have a page on Trustpilot, but several of its branches have Yelp reviews. Several reviewers complained that its online banking service was difficult to use and didn’t always work. Others felt that the whole process of setting up an account or paying off a loan was unnecessarily clunky. We also had a difficult time getting in touch with customer service — it took eight minutes to get through to a representative when we called.

It wasn’t all bad, though. A few customers really appreciated the personalized service they found at Sound, especially after switching over from big banks.

How do I apply?

You can apply for a Sound Credit Union business loan online, over the phone or in person at your local branch. Applying in person is fastest: You can often get a response within 24 hours. Otherwise, it can take two to three business days to hear back. However you apply, double-check that your business is eligible first.

Eligibility requirements

To qualify for a business loan, your business must be at least two years old and eligible for membership with the credit union. Business owners who live or work in Washington — or have a relative who does — are able to become members.

If you’re interested in taking out a $25,000 loan, you must also have a personal credit score of 700 or higher and collateral to back your loan.

Steps to apply

Follow these steps to apply for a Sound Credit Union business loan online:

  1. Go to the Sound Credit Union website.
  2. Hover over Business in the main navigation bar, then click Business Loans.
  3. Select Term Loans, then click Apply Online.
  4. Enter your email and create a password before clicking Start My Application.
  5. Set up three security questions, then click Enroll.
  6. Complete the application with information about yourself and your business, including its assets.
  7. Review and submit your application.

Typically, it takes between two and three business days for Sound Credit Union to respond to online applications.

What documents do I need to apply?

Sound Credit Union might ask to see the following documents:

  • Your business licenses
  • Tax returns
  • Bank statements
  • Profits and loss sheets

Other types of business loans from Sound Credit Union

  • Business lines of credit. Secured and unsecured lines of credit starting at $5,000. Businesses can make interest-only repayments on each withdrawal for the first 12 months.
  • Vehicle loans. Loans to buy a new vehicle or refinance a current loan.
  • Commercial real estate loans. Financing for buying an office, warehouse, retail building, multifamily complex and more.
  • SBA loans. Government-guaranteed loans with competitive rates, longer terms and larger amounts for small businesses with big projects coming up.

I got a business loan from Sound Credit Union. Now what?

Now that your business has the funds it needs, it’s time to start thinking about repayments. Ask if it’s possible to sign up for autopay so you have one less thing to think about.

Keep an eye on your account balance. If you have any questions, reach out to a customer service rep at 800-562-8130 or by visiting your local branch.

Bottom line

Sound Credit Union’s business term loans are ideal for Washington business owners who just need a little extra cash to grow or get by. But while its rates are extremely competitive, its time-in-business requirements are stricter than most credit unions and online lenders.

Find out how Sound Credit Union compares to other lenders by reading our business loans guide.

Frequently asked questions

Picture: Shutterstock

Anna Serio

Anna Serio is a staff writer untangling everything you need to know about personal loans, including student, car and business loans. She spent five years living in Beirut, where she was a news editor for The Daily Star and hung out with a lot of cats. She loves to eat, travel and save money.

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