So let’s be honest, you’re reading this because you’re looking at loan options for contractors. Excellent stuff and congratulations, but you’re not here for me to give you a pat on the back. So to get things moving, you’re either looking to start up or expand your existing business. And so maybe you need a little extra money to get things moving along.
As a contractor or someone looking to make a startup, there are dozens of expenses to think about. You’ll likely need supplies, real estate, transportation, equipment, and so on and so forth. I think it’s safe to say the list could go on for a while. Perhaps you can afford a lot of those costs, but the money situation isn’t exactly where you’d want it to be.
Whatever the reason, you know you’re in the need of cash and you want to figure out the best options for you. This isn’t to say there won’t be a few of you who don’t have the money readily available, but for everyone else, you’re going to need some funding from alternative sources. And I know, banks, interest rates, and collateral – scary stuff – but it doesn’t all have to be intimidating, and there are quite a few loan options outside of the traditional bank route.
So without further delay, we’re going to take a look at two of these financial company options and see how they stack up against each other.
Loan Options for contractors: Finance Factory vs Fundera
Startup Loan Options for contractors
Finance Factory: Unsecured personal and business funding (which means no collateral like your house or car) for up to $350,000. You’ll need a guarantor with a credit score of +660 and interest rates are 0% up to 21 months. Fast approvals and turnarounds.
Fundera: They don’t make it clear whether the loans are secured or unsecured, but it would be safe to go in expecting the options to have either of the two. They offer up to $150,000 for payback terms of 6 months to 4 years. Interest rate is 0% for 9 – 15 months, but 7.9% – 19.9% after the free period. And they need a credit report for you to get approved. The process can take 30 – 45 days with the quickest time being 2 weeks and the money is more of a credit card with limited cash rather than physical money deposited to you. They don’t say a specific number, but your credit needs to be pretty amazing to qualify.
SBA (Small Business Administration) Loan Options for contractors
Finance Factory: They want you to have an established business with tax returns to prove it’s alive and doing well. Your interest rates are between 6% – 8% and payback terms are 10 – 25 years. You can get approved anywhere between 2 weeks and 2 months (14 – 60 days) and they offer the highest amount of money for the best interest. You can also get anywhere between $5,000 – $5,000,000 since SBAs are government funded.
Fundera: You’ll want to have been in business for at least 2 years before looking into SBA options. Interest rates will start at a minimum of 6.75% and go upward from there. Like Finance Factory, the maximum amount of money can vary between $5,000 – $5,000,000 and have payback terms of 10 – 25 years. The quickest you can receive the money is 3 weeks.
Business Lines of Credit Options for contractors
Finance Factory: You can get funding up to $500,000 in as little as 1 – 2 weeks. However, you’ll need an existing business with proven revenue to qualify. Rates vary based on the individual and you can receive a free, personalized, quote by one of their professionals online (interest rates, qualifications, and loan terms). They primarily focus on finding unsecured loans for clients.
Fundera: You can get money anywhere between $10,000 – 1,000,000 and payback terms can be 6 months to 5 years. The interest rates will typically be between 7% – 25%, but funding can be gotten in as fast as 1 day. Collateral is a strong possibility.
Equipment Loan Options for contractors
Finance Factory: Easiest loans to obtain and qualify for. You can use equipment financing for anything ranging from trucks, computers, and so on. The equipment is the collateral and the rates will vary based on the individual. Again, you can get a free quote online. They’ll typically look for credit scores between 600 – 800. And there’s no specified revenue or time in business stated.
Fundera: Loan amount depends on the value of the equipment and the payback terms are based on the lifespan of the equipment. Interest rates can be anywhere from 8% – 30%, but you can get the money in as quick as 2 days. They’ll want your annual revenue to be over $130,000, have a credit score of 630, and have been around for 2 years.
Finance Factory focuses on providing unsecured loans and assisting you at the personal level to find loan options for contractors
To determine whether you’re qualified, Finance Factory looks at the Three Cs: Credit, Cash flow, and Collateral. They’ll look at any credit between 600 – 800, a minimum account balance of $1,000 – $5,000 for monthly cash flow (but also look at annual revenue), and will accept collateral as an option. However, You only need one of the three Cs to qualify for a loan – meaning as long as you fit the credit and cash flow qualifications, you will be able to get an unsecured loan.
Finance Factory has a team of highly trained professionals who guide and educate clients so they can make the best and most informed decisions possible when looking at loans. They help you every step of the way and give you all of the information for your application. Their specialty is making and building relationships between small business owners and vetted lenders while offering great rates and affordable terms for everyone.
Interested in finding funding for your business? Finance Factory would love to help! If you’re looking to fund your business within the next 30 to 90 days for $25,000 to $500,00 and have a credit score of 660 or better, let’s chat! Get pre-qualified right now with our quick-step pre-qualification form! And don’t worry, this will not result in a hard credit inquiry of sensitive information. We just want to learn more about you and your business. Click below to get started!