Written by Janet Gershen-Siegel

Our Credibly Review Can Help You Keep Your Assets Protected

Check out our Credibly review to learn if this option is right for you. Win more money by knowing all the facts.

Credibly is one of several online lending companies. They are actually an emerging Fintech platform.

They can provide up to $250,000 in small business funding for working capital or small business expansion.  We look at the specifics and drill down into the details.

Credibly Review: Background

Credibly is located online here: https://www.credibly.com/. Their physical addresses are located in Troy, Michigan; New York, New York; and Scottsdale, Arizona.  You can call them at: (888) 664-1444. Their contact page is here: https://www.credibly.com/about/contact/.

You can email them at: customerservice@credibly.com.

Qualification requirements

Your company has to in business for at least 6 months at the minimum. In addition, you need to have at least $15,000 in monthly revenue.

Credibly also will want to review your most recent three months’ worth of bank statements while they consider whether to grant your application for funding. Credibly offers $5,000 – 250,000 in loans. Funding is within 48 hours.

Credibly will pull your personal credit and this action will thereby impact your personal credit score. In addition, they will want a personal guarantee. If you do not provide collateral, they will take out a lien on your business.

Fees

There is a 2.5% origination fee. Rates start at 9.99% and go up to 30.00%.

Credibly Review: Advantages

Advantages include a short time in business requirement. A short time to funding is also attractive.

Credibly Review: Disadvantages

A disadvantage/wild card is that the company is in Fintech, an umbrella term which includes blockchain and crypto currencies. As a result, their business model could change radically in short order as this technology continues to improve.

It is entirely possible that, if blockchain and crypto currencies become more attractive to Credibly, that the company could shift its business operations to such areas entirely.

So if your company has an outstanding loan with Credibly, then it would be likely that the obligation would be sold to another lender. However, this is all speculation at this point in time.

Personal Guarantee?

Another set of disadvantages are that they will want a personal guarantee and they will do a hard pull on your personal credit. And if you are unable to provide them with collateral, then they will take out a lien.

For startup companies and their founders in particular, who are often on some shaky financial ground to begin with, either option could prove problematic. For these sorts of companies and business owners, a better choice might be to try crowdfunding or angel investing if either is possible. In that way, a business owner’s personal assets would be safer.

Alternatives

The best alternative to using any online lender, including Credibly, is to build business credit. Building business credit gives you more options. And Credibly may turn out to best the best choice after all. But it’s better to have the choice than to just have to settle for one funding provider, yes?

What Business Credit Is

Corporate credit is credit in a company’s name. It doesn’t attach to an owner’s consumer credit, not even if the owner is a sole proprietor and the solitary employee of the corporation. Consequently, an entrepreneur’s business and personal credit scores can be very different.

The Advantages

Due to the fact that small business credit is separate from consumer, it helps to protect an entrepreneur’s personal assets, in the event of court action or business insolvency.

Also, with two distinct credit scores, a business owner can get two different cards from the same merchant. This effectively doubles purchasing power.

Another advantage is that even startups can do this. Visiting a bank for a business loan can be a formula for disappointment. But building company credit, when done properly, is a plan for success.

Personal credit scores rely on payments but also other elements like credit utilization percentages. But for small business credit, the scores truly just hinge on if a corporation pays its invoices on time.

The Process

Growing small business credit is a process, and it does not occur automatically. A small business has to actively work to build business credit. That being said, it can be done easily and quickly, and it is much faster than establishing consumer credit scores. Vendors are a big aspect of this process.

Carrying out the steps out of order will lead to repeated rejections. Nobody can start at the top with corporate credit. For example, you can’t start with store or cash credit from your bank. If you do you’ll be denied 100% of the time.

Company Legitimacy

A business needs to be reputable to lending institutions and vendors. As a result, a company will need a professional-looking web site and e-mail address, with website hosting purchased from a merchant like GoDaddy. And company phone and fax numbers ought to be listed on ListYourself.net.

In addition the company telephone number should be toll-free (800 exchange or the equivalent).

A small business will also need a bank account devoted purely to it, and it must have all of the licenses essential for operating. These licenses all have to be in the identical, appropriate name of the small business, with the same corporate address and telephone numbers.

So note that this means not just state licenses, but potentially also city licenses.

Working with the IRS

Visit the IRS web site and obtain an EIN for the small business — they’re totally free. Select a business entity such as corporation, LLC, etc. A company can begin as a sole proprietor but will more than likely wish to change to a variety of corporation or partnership to limit risk and maximize tax benefits.

A business entity will matter when it concerns tax obligations and liability in the event of a litigation. A sole proprietorship means the entrepreneur is it when it comes to liability and tax obligations. No one else is responsible.

If you run a business as a sole proprietor at the very least file for a DBA (‘doing business as’) status. If you do not, then your personal name is the same as the small business name. Hence, you can find yourself being directly liable for all company debts.

Also, according to the IRS, with this structure there is a 1 in 7 possibility of an IRS audit. There is a 1 in 50 possibility for incorporated businesses! Prevent confusion and dramatically lower the odds of an IRS audit as well.

Instigating the Business Credit Reporting Process

Begin at the D&B web site and get a free DUNS number. A DUNS number is how D&B gets a corporation in their system, to generate a PAYDEX score. If there is no DUNS number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s websites for the business. You can do this at https://oldcs.creditsuite.com/reports/. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process. This way, Experian and Equifax will have something to report on.

Trade Lines

First you must build trade lines that report. This is also called vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score. And with an established business credit profile and score you can begin getting revolving store and cash credit.

These kinds of accounts have the tendency to be for the things bought all the time, like coffee, shipping boxes, outdoor work wear, ink and toner, and office furniture.

But to start with, what is trade credit? These trade lines are creditors who will give you preliminary credit when you have none now. Terms are often Net 30, instead of revolving.

Therefore, if you get approval for $1,000 in vendor credit and use all of it, you will need to pay that money back in a set term, like within 30 days on a Net 30 account.

Details

Net 30 accounts have to be paid in full within 30 days. 60 accounts must be paid completely within 60 days. Compared to with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you used.

To start your business credit profile the right way, you ought to get approval for vendor accounts that report to the business credit reporting agencies. When that’s done, you can then use the credit, pay back what you used.

Then the account is reported to Dun & Bradstreet, Experian, or Equifax.

Not every vendor can help like true starter credit can. These are vendors that will grant an approval with minimal effort. You also need them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.

But you may need to apply more than once to these vendors, and you may need to purchase some things you don’t need to have, to demonstrate you are trustworthy and will pay punctually. Consider donating nonessential items to charity.

Revolving Store Credit

Once there are 5 — 8 or more vendor trade accounts reporting to at least one of the CRAs, move to revolving store credit. These are businesses such as Office Depot and Staples. These companies are more likely to have products you need.

Use the company’s EIN on these credit applications.

Fleet Credit

Are there 8 – 10 accounts reporting? Then move to fleet credit. These are companies like BP and Conoco. Use this credit to buy, fix, and maintain vehicles. Make sure to apply using the small business’s EIN.

Cash Credit

Have you been responsibly managing the credit you’ve gotten up to this point? Then progress to cash credit. These are service providers like Visa and MasterCard. Keep your SSN off these applications; use your EIN instead.

If you have 14 trade accounts reporting, then these are doable.

Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and deal with any inaccuracies ASAP. Get in the habit of checking credit reports and digging into the particulars, and not just the scores.

We can help you monitor business credit at Experian and D&B for only $24/month. See: https://oldcs.creditsuite.com/business-credit-monitoring. Update the details if there are inaccuracies or the details is incomplete.

Disputing Mistakes

So, what’s all this monitoring for? It’s to dispute any mistakes in your records. Mistakes in your credit report(s) can be taken care of. But the CRAs normally want you to dispute in a particular way.

Disputing credit report errors typically means you send a paper letter with copies of any evidence of payment with it. These are documents like receipts and cancelled checks. Never send the originals. Always send copies and retain the original copies.

Disputing credit report inaccuracies also means you specifically itemize any charges you contest. Make your dispute letter as crystal clear as possible. Be specific about the problems with your report. Use certified mail so that you will have proof that you sent in your dispute.

A Word About Business Credit

Always use credit responsibly! Don’t borrow beyond what you can pay off. Monitor balances and deadlines for repayments. Paying punctually and fully will do more to boost business credit scores than nearly anything else.

Building business credit pays off. Good business credit scores help a business get loans. Your creditor knows the corporation can pay its debts. They understand the small business is bona fide.

The small business’s EIN attaches to high scores, and lenders won’t feel the need to demand a personal guarantee.

Business credit is an asset which can help your company for many years to come.

Credibly Review: Takeaways

Companies that do best on Credibly will be fairly new players but with relatively meteoric rises.

So a business owner asking for a loan should be prepared for a hard pull on his or her personal credit scores, which will impact those scores. However, this is just like all hard pulls do.

If an entrepreneur does not have the wherewithal to ride out a slightly lower personal credit score for a couple of years, then Credibly is not for them.

And finally, as with every other lending program, whether online or offline, remember to read the fine print and do the math. Go over the details with care. Decide if this option will be good for you and your company.

In addition, consider alternative financing options that go beyond just lending. These include building business credit and unsecured business financing. This is in order to best decide how to get the money you need to help your business grow.

Today, we want to hear from our audience! Share your voice with us about your experiences with online lenders and give us your own Credibly review.