From startups to medium-sized businesses, merchants in need of flexible, customized loan products can apply for funding from The Business Backer as an alternative to traditional bank loans. Options are available for companies with poor credit and other financial challenges.
Established in 2007 and currently headquartered in Montgomery, Ohio, The Business Backer offers “customized funding solutions” to small- and medium-sized businesses in all 50 U.S. states. To date, the company has funded over $200 million in loans with its in-house merchant cash advances and the financial services of an extensive network of partners.
The Business Backer bases its approach to lending on a system it calls “True Relationship Financing.” Via its “True Relationship Partner” network, the lender is able to connect applicants with the right type of loan based on financial information, business history and “future goals.” It puts a great deal of emphasis on “getting to know” customers rather than just looking at their numbers and aims to provide the best offers and rates to each qualified applicant.
On its website, The Business Backer offers basic details about each loan type available, including business lines of credit, short- and long-term loans and MCAs. Its partnerships also allow the lender to offer some loan types other online lenders don’t, such as commercial real estate and startup loans. Not all financial products are available in all areas of the U.S., so potential applicants should read the information about the specific loan they wish to request before getting in touch with The Business Backer.
A FICO score of at least 550 is required for merchants to qualify for the majority of The Business Backer’s loan products. For startup loans, the minimum requirement is 680.
According to Fundera, The Business Backer also allows up to three instances per month of non-sufficient funds (NSF) on bank statements and up to eight overdrafts. This gives companies with fair or even poor credit access to funding they wouldn’t be able to obtain from a bank, providing an alternative during periods of financial hardship.
The Business Backer is able to extend funding in situations where banks are often wary because the lender looks beyond numbers to consider the causes of unstable cash flow, irregular sales, less-than-desirable credit ratings and past due bills or taxes. The lender’s website repeatedly emphasizes a focus on a company’s “story” rather than a collection of statistics. If the complete picture of an applicant’s financial situation suggests the company is stable enough to handle loan payments, The Business Backer may make an exception to its rules for approval.
Almost no information is available on this lender’s website regarding the industries to which it’s willing to lend. Like most online financing companies, it extends loans to businesses in industries where cash flow isn’t always predictable, including food service, retail, construction and transportation.
Because sales often vary by season in these industries, banks and other traditional lenders aren’t always willing to approve loans. The Business Backer may be able to secure financing for companies turned down due to unstable cash flow or the negative impact of a slow season on business credit.
When bank loans aren’t an option, businesses in the following high-risk industries can apply to The Business Backer for funding:
The lender’s “customer story” approach brings together several factors not considered by banks during the approval process and makes it more likely that these types of businesses will be able to obtain funding.
Despite this relatively open policy, The Business Backer is more stringent in its restrictions than other online lenders. Fundera lists a range of industries unable to obtain loans from this company:
Businesses in these categories will have to look to other lenders that cater to a broader variety of industries.
Term lengths for funding from The Business Backer depend on which option a merchant is approved for and the overall financial health of the business at the time of application. Ranges include:
The Business Backer or one of its partners determines an appropriate term length based on information provided during the application process and includes the terms in the final loan offer.
The most basic requirements for most loans from The Business Backer are at least $180,000 in annual revenue, a FICO score of 550 or more and at least one year in business at the time of application. Startups must have a FICO score of at least 680 and can apply any time during their first six months in business. Additional requirements include:
Merchants begin the application process using a pre-approval tool The Business Backer calls BestMatch Analysis, accessed via the “Find Your BestMatch” button on the homepage or the “Apply for Funding” button on pages dedicated to specific loan types. Applicants then provide:
The Business Backer reviews this information, and applicants receive a call from a funding advisor within one business day. During the 15-minute session, the advisor collects additional information required to determine approval. Applicants have the option of creating an online account after completing the BestMatch form to submit information sooner and speed up the approval process.
Depending on the type of funding being requested, The Business Backer may ask for:
Once all required paperwork has been submitted, The Business Backer uses the information to form a detailed picture of each applicant’s financial circumstances and either extends an offer for a merchant cash advance or finds an appropriate option from one of its partners.
Approvals are generally sent between 8:00am and 5:00pm Monday through Friday. The length of the approval process varies depending on how quickly applicants submit paperwork and the type of loan being requested. Some funding may be available in one to three days.
As with loan terms, factor rates and interest rates are assigned according to a merchant’s financial stability as determined from paperwork submitted with the application. The Business Backer lists the following rates for its financial products and those of its partners:
Payment options are flexible and vary by loan type. For MCAs, payments may be daily, weekly or semi-monthly depending on an applicant’s qualifications.
The Business Backer prefers to be a first-position lender and doesn’t extend funding to merchants attempting to stack loans. Instead, the lender emphasizes financial health and allows several of its loan products to be used for refinancing. No information is provided regarding whether The Business Backer is willing to make any exceptions to its stacking policy.
Applicants aren’t required to pay processing fees for The Business Backer’s loan products and there are no “hidden” documentation fees.
The Business Backer charges a 3 percent origination fee.
Merchants in need of additional funding can often obtain another loan from The Business Backer within 60 days of initial funding being granted. To ease the financial burden, the lender will refund all unpaid interest on the existing loan and require full payment only of the principal.
In addition to forgiving interest on renewed loans, The Business Backer also offers a discount of up to 35 percent for early repayment of small business loans. Information regarding interest forgiveness on other loan products isn’t provided on the website, but it’s customary for lenders to require fees based on factor rates to be paid in full regardless of when the loan is paid off.
Restrictions for the use of loans from The Business Backer are similar to those imposed by other online lenders. Applicants can only apply for business loans; personal funding isn’t available. Funding may also not be used by companies intending to extend loans to other businesses.
The Business Backer provides multiple suggestions for the legitimate use of funding within a business setting, many of which reflect common reasons companies seek loans:
It’s also possible for companies to use a loan from The Business Backer to refinance existing debt and pay it off in a timely manner. This option could be a lifesaver for businesses facing the possibility of bankruptcy or permanent closure if a bank or other traditional lender is unwilling to help.
The Business Backer has a more positive online reputation than many other online lenders. In addition to an A+ rating from the BBB, this lender rates:
However, neither Google nor the BBB have any reviews on file for The Business Backer, which is unusual for a lender with over 10 years in business. Merchants researching funding options must read reviews available on other sites.
In these reviews, customers praise The Business Backer for its professional service, easy application process, fast delivery of funds and payment plan structures. Negative feedback points to delays when applying, unexpected additional qualification requirements and expensive fees.
In addition to becoming BBB accredited in July of 2012, The Business Backer has received several notable awards and has been recognized by top industry publications. These honors include:
CEO Jim Salters also received the Ernst & Young Entrepreneur of the Year Award in 2012 and was the winner of Forty Under 40 the same year. Few online lenders have received this level of recognition, and The Business Backer features several of its awards on its website to distinguish itself from less reputable companies in the industry.