Requesting a business loan isn’t always a simple process. There tends to be a lot of information required and steps to apply for a loan. Wouldn’t it be much easier if your loan provider already had access to all of that? That’s what QuickBooks Capital offers you.
Thanks to working with the information you already supply through QuickBooks, QuickBooks Capital can simplify the loan application process and provide quick payouts for businesses.
However, this lending service is not perfect, and before applying, there are a few things you should know.
This article will discuss what QuickBooks Capital is, how it works, its pros and cons, loan terms, and some other financing alternatives.
What is QuickBooks Capital?
QuickBooks Capital is a loan service that customers of QuickBooks Online and Desktop can access. PayPal Working Capital and Shopify Capital leverage your QuickBooks information to determine eligibility. QuickBooks Capital uses this information to expedite the application process by pre-filling your current information.
QuickBooks Capital’s installment loans (also known as term loans) range from 6 to 9 months and 12 to 18 months. QuickBooks Capital’s rates are similar to those of other lenders, with APRs ranging from 9.99% to 34%. However, their lack of origination or closing fees gives them an edge over their competition.
QuickBooks Capital finance is not cheap, and you will need to repay your loan quickly. However, if you have a seasonal or small business that may not be accepted by traditional banks or other lenders, QuickBooks Capital can be an excellent source of fast funding.
Accounting data determines the loan amount, terms, and rates, along with revenue and credit score criteria. If your revenue history does not support a loan size or duration, you will not qualify.
Profitable businesses make well above the $50,000 minimum revenue threshold. Proprietors with great credit scores of 760 or higher receive the best rates, longest loan terms, and the largest loan amounts.
Installment loans (also known as term loans) are available in QuickBooks. Borrowers receive a lump sum of money when they take out these loans. In exchange, the borrower must pay the principal and interest within a predetermined period. Payments are set up in installments, scheduled at specific dates. Like any other short-term loan, you’ll pay back QuickBooks financing in weekly installments over an agreed-upon repayment period.
You may be able to qualify for financing through one of QuickBooks’ finance partners if you are not eligible for a QuickBooks Capital loan. Based on the information in your QuickBooks account, QuickBooks calculates your eligibility for other offers.
Quick Overview of QuickBooks Capital
Here’s a brief breakdown of QuickBooks Capital’s terms, fees, and requirements:
- The minimum loan amount is $5,000
- The maximum loan amount is $150,000
- Loan term up to 18 months
- Minimum credit score 620
- APR 2.61% to 18.35%
- Requirements: At least six months of primary business accounts linked to Quickbooks, a credit score of 620 or higher, $50,000+ of income in the previous six months, no bankruptcy in the past two years, and not located in Alaska.
Pros and Cons of QuickBooks Capital
Like with any service, there are many advantages and disadvantages to using QuickBooks Capital. Some of these stem from the fact that it’s a service exclusive to QuickBooks users, for better or worse. Here’s an overview of QuickBooks Capital’s pros and cons:
Advantages of QuickBooks Capital
Among the many advantages of using QuickBooks Capital are the lack of fees for their loans, their marketplace for partner loans, and their simple application process. Here’s a look at the full list:
No Extra Fees for QuickBooks Loans
There are no additional costs when you obtain QuickBooks financing through one of their direct loans. QuickBooks loans will only incur interest as a cost of capital. Obtaining such a loan for a small business is extremely rare, even more so for a short-term loan for a small business. As a reminder, few short-term loans offer prepayment bonuses like QuickBooks loans. With QuickBooks loans, you’ll only have to pay interest for however long it takes to repay the loan. If you repay your QuickBooks loan ahead of schedule, you will not be penalized for prepayment.
QuickBooks loans will also not have an origination fee, which is quite unusual in the industry. The only expenses of a QuickBooks loan (taken directly from QuickBooks) are interest charges.
QuickBooks Capital Marketplace
QuickBooks Capital also offers auxiliary funding, which is another advantage of partnering with them. They will try to link you with lenders who provide short-term QuickBooks loans directly to businesses if you aren’t interested in their short-term QuickBooks loans. Short-term loans, invoice financing, term loans, commercial lines of credit, and even SBA loans will be available.
The underwriting processes, requirements, and conditions of these lending partners will differ from those of direct QuickBooks loans, so their products will not be comparable. Nevertheless, they will continue to use your company’s QuickBooks accounting data to streamline their underwriting processes.
Streamlined Application Process
Getting QuickBooks financing will be easy since QuickBooks already has access to much of the information needed for underwriting. You enter data into QuickBooks accounting software every day, which helps other lenders understand your company’s financial position. Accounting software companies like QuickBooks already have access to financial data about their users, and that was one of the main reasons they started offering loans through QuickBooks Capital in the first place.
Quick Loan payments
You’ll receive the funds in 1 to 2 days if your loan is approved.
Disadvantages of QuickBooks Capital
Among the disadvantages of QuickBooks Capital, you’ll find their limited marketplace options, that they are only on an invite basis, and their short loan terms. Here’s a look at the full list:
The fast application process of QuickBooks Capital comes at a price – so it’s efficient and easy in part because it’s by invitation only.
You can access the QuickBooks Capital application only if you receive an application invitation in your QuickBooks account. Based on the information in an account, QuickBooks delivers an in-app invitation to potentially eligible users for QuickBooks financing.
QuickBooks Capital’s invite-only structure poses a significant barrier to proactive business owners seeking capital through QuickBooks Capital, particularly when their QuickBooks account does not necessarily reflect their business’s cash flow.
Limited Marketplace Options
In addition to the QuickBooks loan, the QuickBooks Capital marketplace offers a wide range of funding options. However, only about seven lending partners are listed on the QuickBooks Capital marketplace. The result is that candidates will have a limited number of lender options. You won’t have many options if you try to find financing through QuickBooks Financing if you’re sure about the type you need for your business.
Not available in all states
Due to regulatory issues, QuickBooks is currently only available in 49 states, with Alaskan users unable to apply.
No long-term options
The longest loan term for QuickBooks Capital is 18 months.
QuickBooks Capital General Overview
Regarding loans, what ultimately matters most are the rates, terms, and repayment process. To that end, let’s take a look at each of them in detail:
QuickBooks Capital Fees and Rates
QuickBooks Capital has the following terms and fees for their loans:
- You can borrow from $5000 to $150,000
- The term lengths range from 6 to 18 months.
- Interest rates range from 2.61% to 29.04%.
- APR ranges from 9.99% to 34%, depending on your credit.
- You must provide a personal guarantee as collateral.
- There’s no origination fee.
In addition to the three-month, nine-month, twelve-month, and eighteen-month installment loans offered by QuickBooks Capital, their marketplace offers additional options. Interest rates are determined by your credit history, loan terms, and amount. Depending on your company’s financials, you may be eligible for an amount ranging from $5,000 to $150,000. Rather than requiring collateral, QuickBooks Capital requires a personal guarantee: your promise to repay the loan if your business goes bankrupt.
You can save money on interest by repaying your loan early because QuickBooks Capital provides installment loans. There are no prepayment penalties. The ACH payment debits your business bank account every week or every month. For an estimate of the monthly payments, you can use the loan calculator provided by QuickBooks Capital.
QuickBooks Capital claims that most companies that successfully pay off their first loan will be eligible for a second loan despite not appearing to grant discounts for repeat borrowers.
QuickBooks Capital loans are made directly through QuickBooks’ parent company, Intuit.
QuickBooks Capital Borrower Requirements
These are the qualifications you must meet to be eligible for a QuickBooks Capital loan:
- A personal credit score of 620
- Business revenue at least of $50,000 per year
- A QuickBooks account with six months of activity
Additionally, you need to:
- Use QuickBooks regularly.
- Integrate your key business bank accounts with QuickBooks Online.
- No bankruptcies have occurred over the past two years.
Additionally, QuickBooks Capital has a list of forbidden industries. Contact their customer service department for more information about whether your industry is restricted.
QuickBooks Capital is available in 49 states to applicants. Alaskans cannot apply, likely due to regulatory reasons.
Before applying for a QuickBooks Capital loan, a business does not need to have been in operation for a set period. The key, however, is to have a comprehensive view of your firm, so you must have at least six months’ activity in QuickBooks.
In addition, Quickbooks Capital reports the details on your loan status and repayment to Dun & Bradstreet and Experian’s Small Business Credit Share (SBCS). In other words, you can improve your business credit score by having a good standing QuickBooks Capital Loan.
QuickBooks Capital Repayment Terms
Loan terms for QuickBooks range from six to twelve months. However, QuickBooks financing does not include a prepayment penalty, so if you pay down your QuickBooks loan before your scheduled repayment schedule, you will avoid paying interest. However, short-term funding does not include this prepayment bonus. In addition to QuickBooks Capital, short-term lenders often specify a certain amount of debt you must repay, regardless of its amount.
Loan Application Process
Applying for a loan is pretty straightforward. Following these steps will allow you to apply online:
- Visit QuickBooks Capital’s website.
- Click the Start button.
- Log in to your QuickBooks account.
- Complete the application according to the instructions.
The application can be started easily by going to the Capital tab on your QuickBooks dashboard. Most of the information is automatically filled in via QuickBooks Capital. The only thing you need to do is double-check the information and fill in any gaps. In most cases, you will not need to provide additional documentation. QuickBooks Capital typically responds within two to three business days. You can also call 800-556-9145.
QuickBooks Capital’s soft credit check will not affect your credit score. Your business credit history may be slightly affected when applying for a loan.
If you are approved, you can choose from various loan amounts. The cash will be deposited into your bank account within one to two days.
You can check the QuickBooks Capital Marketplace to see other lending partners integrated with your QuickBooks Online account, which can be useful if you are looking for a different type of loan not offered by QuickBooks Capital directly or if they didn’t approve your application.
If additional information is required, a member of the QuickBooks team will contact you. If not, they will contact you within one or two business days. Following up with QuickBooks online via email, live chat, or phone if you haven’t heard back within three business days is the best course of action.
Other Financing Forms
You can also get alternative types of finance through the lending marketplace that QuickBooks Capital incorporates if you are not interested in the short-term loans QuickBooks provides.
With QuickBooks, businesses can access invoice financing, short-term loans, lines of credit, medium-term loans, and SBA loans. Their partners include direct lenders such as Fundbox, Funding Circle, and Bluevine.
However, QuickBooks’ lender partners will have stricter borrower requirements than QuickBooks. Therefore, if you are unable to qualify for a direct QuickBooks loan, you might have difficulty applying for one through their marketplace.
QuickBooks Capital Online Reviews, Complaints, and Rating
The BBB site does not separate complaints concerning QuickBooks Capital from other QuickBooks products, even though Intuit has an A+ rating from the BBB and has resolved over 2,000 complaints in the last three years. Almost no complaints mention QuickBooks Capital, instead focusing on problems with QuickBooks and TurboTax. While there are complaints about QuickBooks, whether it’s the software itself, the pricing, or the billing method, QuickBooks Capital is rarely mentioned. Several users also complained about the customer service.
Online reviews of Intuit, QuickBooks Capital’s parent company, are mixed. Most inquiries are related to QuickBooks payroll or website issues, not Quickbooks’ lending brand.
QuickBooks Capital offers customer testimonials on its website. These are some of the reasons QuickBooks Capital is popular with its users:
- The process of applying and receiving approval is straightforward.
- The funds are distributed quickly.
- It provides a great opportunity for corporate expansion
You may not be a good fit for QuickBooks Capital:
- If you are looking for a longer-term arrangement,
- In the case of a loan exceeding $150,000,
- If you don’t use QuickBooks regularly,
5 Alternatives to QuickBooks Capital
If you find that you don’t qualify for a QuickBooks Capital loan, or you want to look into other financing options, consider the following list of alternatives:
Breakout Capital is an excellent short-term funding solution for small businesses. Their loans are flexible, unlike other options.
You must have been in business for one year, have a credit score of 600, and generate at least $10,000 in revenue per month to qualify for a Breakout Capital loan.
- Short-term loans
SmartBiz loans are a great solution for established businesses needing SBA loans. As a specialist in general 7(a) small business loans, SmartBiz can provide working capital, debt consolidation, or commercial real estate loans. However, new businesses cannot apply for these loans due to their specific requirements. SBA loans are government-backed, making it more difficult to qualify for them than other options.
To qualify, you must be in business for at least two years, have fair credit, and possess sufficient cash flow to support repayments. In addition, the property must also have no current charge-offs, tax liens, settlements, or bankruptcies within the last three years.
- Working capital
- Debt refinancing
- Commercial real estate purchasing
A Fundation loan can be a great option for companies with good credit who want to borrow money at attractive rates without the lengthy, confusing application process. They offer competitive rates, exceptional customer service, and hardly any negative reviews, so they are a solid firm to do business with.
Your credit score must be 660 or higher, you must have been in business for at least a year, and you must earn at least $100,000 annually to qualify. You must also have three full-time employees to qualify.
- Installment loans
- Lines of credit
OnDeck’s lower borrowing conditions make it an attractive alternative for merchants looking for fast financing who may not qualify elsewhere or who need a little more capital until they qualify for better financing. In addition to short-term loans, OnDeck offers lines of credit with weekly or daily payments. However, the loans are expensive.
To be eligible for an OnDeck loan, you must have been in business for at least one year, have a credit score of 600 or higher, and generate at least $100,000 in annual revenue.
- Short-term loans
- Lines of credit
StreetShares is a top small business lender because it provides quick, affordable financing for small to medium-sized businesses while offering some of the best rates. Merchants looking for installment loans, lines of credit, or contract financing can turn to StreetShares for attractive rates and modest qualifications. Up to 20% of your annual income is the maximum installment loan amount you are eligible for.
StreetShares loans are available only to businesses that have been in operation for at least a year, have a credit score of 620 or above, and have a minimum of $25,000 in revenue. However, if you have $100,000 in revenue, you can qualify after only six months.
- Installment loans
- Lines of credit
- Contract financing
QuickBooks Capital is a great choice for those that already use QuickBooks and need a financing solution with quick payment and a simple application process. Their loan terms are similar to those of other online lenders but with a smoother process. However, this option might not be for you if you don’t use QuickBooks often.