LoanBuilder Reviews - Financial Lender Pros & Cons
- Straightforward application process
- Funding provided in as little as one day
- Provides funding and payment estimates before application
- Requires a minimum personal FICO score
- Requires a personal guarantee
- Short terms can result in high rates
Who should consider funding from LoanBuilder?
Owners of established small businesses in a wide range of industries may be able to obtain financing from LoanBuilder when bank loans aren't an option Businesses seeking short-term funding with manageable payments can benefit from LoanBuilder's weekly payment model.
Swift Financial, the entity behind LoanBuilder, was established as an independent company in 2006 and acquired by PayPal in 2017. Now operating as part of PayPal's suite of financial services, Swift aims to help small business owners "get the right funding quickly" by offering flexible loan options to companies across the U.S.
PayPal's acquisition of Swift Financial makes it possible for the company to "provide access to business financing options to … millions of small business owners" currently using PayPal to help manage their funds. With marketing aimed at business owners looking to reach their full potential and achieve the dreams they have for their companies, LoanBuilder caters to businesses seeking alternatives to traditional bank loans that don't require lengthy applications or perfect credit.
LoanBuilder sets itself apart from other short-term lenders by providing an online "Configurator" for merchants interested in obtaining funding. Using this tool, business owners get an understanding of the terms and fees involved in LoanBuilder's fixed-cost loan model before applying. Many short-term lenders don't reveal this information until after a pre-approval application has been submitted, making LoanBuilder a more transparent option for merchants wary of "fast cash" providers.
A personal FICO score of 600 or more is required to qualify for funding from LoanBuilder. Applicants with extremely low credit scores may have to look elsewhere for loans unless other factors suggest the company's financial standing is strong enough to sustain a weekly payment schedule.
In some cases, a low credit score may not completely disqualify a business. LoanBuilder uses what it calls a "Business Health Credit Score," which is calculated based on answers to the questions asked when an applicant uses the online Configurator. The lender looks for companies with a score of 55 or more based on multiple factors, including:
- Personal credit
- How many times credit was applied for in the recent past
- How long ago personal and business credit were established
- Available credit balance on personal credit cards
There are some factors that disqualify a business outright from getting a short-term loan from LoanBuilder. Companies or applicants in bankruptcy or with active liens and judgements above $150,000 can't get financing from this lender.
A quick look at the pre-approval application on LoanBuilder's website shows the lender is open to providing funding to a diverse range of industries, including:
- Accounting and finance
- Administrative services
- Arts, recreation and entertainment
- Auto parts and services
- Chemical, oil and gas
- Communication services
- Company and enterprise management
- Food service
- Hunting, fishing and forestry
- Janitorial, repair and maintenance
- Mail and courier services
- Mining and quarrying
- Pest remediation
- Professional and technical services
- Public administration
- Real estate and rental
- Social services
- Training and educational services
- Waste management
Each of the industries listed has several sub-industries to choose from, making it possible for merchants running just about any kind of business to apply for a loan. This is encouraging for businesses in industries usually shut out by banks and other traditional lenders, including those without consistent income streams throughout the year.
Diversity is a perk of LoanBuilder's financing services. Many high-risk industries are welcome to apply, and there are few industries with which they won't do business.
Businesses offering hospitality services, running food service establishments and performing construction work often have difficulty showing the consistent cash flow banks like to see and may be rejected for traditional loans. Arts and entertainment businesses relying on the popularity of shows and attractions can also have difficulty maintaining a steady influx of cash. Because LoanBuilder looks at multiple factors when considering approval, these industries may have the chance to obtain the funding they need despite financial challenges.
LoanBuilder doesn't provide loans to car dealerships selling new vehicles or to service providers such as law offices.
LoanBuilder offers a wide range of term lengths depending on the qualifications and needs of applicants. According to the lender's website, merchants can expect terms of 13 to 52 weeks, or about 3 to 12 months. Applicants can adjust term lengths using the online Configurator to determine total fixed costs and weekly payments.
Short term lengths mean higher weekly obligations, and companies lacking reliable cash flow may not be able to meet the requirements. Consistency of income, the financial health of a business and the availability of funds must be taken into account before accepting shorter terms. The Configurator is a helpful tool for applicants looking for loans but unsure of whether or not their companies can sustain payments without defaulting.
What's Required to Apply
LoanBuilder considers a combination of factors when deciding whether or not to approve a merchant for funding. However, all applicants must meet four basic requirements:
- Operate in one of the 50 U.S. states
- Be in business for at least 1 year
- Have an annual revenue of $100,000 or more
- Maintain a personal FICO score of at least 600
To complete a pre-approval application, a merchant may click the "Check Eligibility" button on LoanBuilder's homepage or go to the online Configurator. The lender encourages use of the Configurator so that merchants can see what loan terms and rates are available before applying.
Estimates in the Configurator are based on a few short questions about personal and business credit and business history. Merchants can customize the resulting suggestion to include higher or lower funding amounts and longer or shorter terms. Once the desired settings are determined, applicants must fill out a three-page online pre-approval form. Required information includes:
- Business name and/or DBA
- Business address and phone number
- Business email address
- Year of establishment
- Tax ID number
- Industry and sub-industry
- Entity type
- State of incorporation
- Purpose of the loan
- Annual revenue
- Number of full-time employees
- Personal details and contact information
- Percent of business owned
Checking eligibility doesn't affect an applicant's credit score, but the final application process does involve a hard credit check. If LoanBuilder approves a merchant based on the initial information, the final application typically requires the most recent four months' worth of business checking account statements. LoanBuilder may ask for additional documentation, such as utility bills and tax forms, in the event certain personal or business details can't easily be confirmed. All loans require a personal guarantee in the form of a UCC-1 blanket lien to secure funding in the event a merchant defaults on payments.
Once a loan is approved and a final contract signed, funding may be transferred in as little as one day. Loans exceeding $75,000 can take two business days to process and deliver.
According to MerchantMaverick, LoanBuilder's variable fixed cost model uses buy rates ranging from 1.02 to 1.18. It's not easy to determine the accuracy of this from the online Configurator, as the calculations are expressed as a "total interest percentage" and broken down into expected weekly payments when merchants preview loan options.
When asked for clarification, a representative from LoanBuilder's sales department explained the range of percentages is wide and can be anywhere from 4 to over 20 percent based on term length, personal and business credit, a company's industry and time in business.
The Configurator makes it possible to get an idea of the total fixed cost of funding from LoanBuilder based on various term lengths. Merchants curious about the weekly obligation involved when pursuing a LoanBuilder loan can input the desired loan amount and adjust term lengths to receive estimates on which to base the decision of whether to apply for funding.
Payments on approved loans are deducted on a weekly basis from a merchant's business checking account via an automated clearing house. This offers a little more freedom than short-term loans requiring daily payments by allowing merchants extra time to bring in, consolidate and deposit funds, and the automatic payment structure means there are no paper statements or bills to keep track of.
Coming to a short-term lender like LoanBuilder with an outstanding balance on a loan from a third party can sometimes mean immediate rejection. However, LoanBuilder will extend funding to applicants paying off traditional bank loans, making it possible to obtain additional short-term funding to cover expenses.
Loans from other short-term lenders make approval and lending more complicated. LoanBuilder may still provide a loan to merchants paying off short-term financing, but part of each payment for funding from LoanBuilder is applied to the existing balance until the third-party loan is paid off. This method effectively turns stacking into a form of debt consolidation and limits the amount of LoanBuilder's funding a merchant can put toward business expenses.
Merchants receiving the maximum amount of funding for which they're approved from LoanBuilder may stack loans with the lender if more cash is required before the first loan is paid off. After paying back 50 percent of the initial funding, a merchant may put in an application for a second loan. However, if only part of the total approved amount is taken at the time of the first loan, merchants must opt to take this additional funding instead of a new loan.
No documentation fees are required when applying for a LoanBuilder loan.
LoanBuilder doesn't charge any additional fees on top of their fixed loan rate.
LoanBuilder seeks to create long-term relationships with the merchants it serves and therefore offers the option for renewal once a current loan has been completely paid off. To be approved for renewal, a merchant must maintain a consistent payment schedule over the course of the initial loan and provide updated financial information when a renewal is requested.
If a business still exhibits a strong financial standing with reliable revenue, it's likely LoanBuilder will approve a renewal. Approval is subject to a review of financial records and the history of the merchant's LoanBuilder account.
The FAQ section on LoanBuilder's website states payment of the full interest charge is required regardless of when a loan is paid off. This means there are no perks to paying off loan balances early, but the lender also doesn't penalize merchants for early repayment.
Similar to other lenders in the industry, LoanBuilder doesn't require extensive proof of what merchants intend to do with the funding they receive. The pre-approval application provides several possibilities, all typical of the short-term lending industry:
- Acquiring another business
- Buying out a partner
- Covering gaps in cash flow
- Equipment and vehicle maintenance or repair
- Handling payroll
- Launching marketing campaigns
- Making improvements
- Opening a new location
- Paying bills or rent
- Paying off or consolidating debt
- Purchasing inventory
- Purchasing new equipment or vehicles
One option unique to LoanBuilder is to use funding for personal purposes. Most short-term lenders limit loans to business use only. Since personal financial difficulties can affect the running of a business, this option allows business owners to get back on their feet when faced with personal monetary issues and to return their focus to daily operations.
Because LoanBuilder is a product of Swift Financial, all reviews and feedback for the lender are found under the Swift brand. Swift Financial has had a Better Business Bureau file since 2007 and holds an A+ rating. Part of this rating is based on the responsiveness of the company to customer complaints, which currently make up 23 percent of its reviews on the BBB site. As of this writing, Swift has addressed and resolved every complaint, making it one of the more responsive companies in the short-term lending industry.
On TrustPilot, Swift Financial ranks 9.6 out of 10 with 87 percent "excellent" ratings and only 2 percent "bad." Customers leaving good feedback cite several perks of working with the lender:
Customers unhappy with the service report:
Calling LoanBuilder for more information may or may not lead to a connection with a sales or customer service representative. Interested merchants can leave a message if the lines are all full, and LoanBuilder promises to return calls quickly.
Licenses & Accreditations
The LoanBuilder brand currently doesn't have its own BBB designation, but Swift Financial has been accredited since 2010 and continues to maintain a high rating.
Company Contacts Details
- Greg Buckley, Head of Operations
- Doug Bland, President and Chief Operating Officer
- Ed Harycki, CEO
- Jay Lee, Chief Marketing and Product Officer