Thanks to the advent of online and alternative lenders, small businesses have more funding options than ever. While that’s a good thing because it gives you more options, finding the best lenders can be daunting.
Lending marketplaces like Clarify Capital aim to help small business owners successfully navigate various alternative lending options. Instead of taking the time to fill out applications with each and every lender, you can complete a single application, and the marketplace helps match you with lenders in its network.
The company’s team of funding advisors works to help you get the lowest rates from its partner lenders. However, the alternative lending facilitator might not be suitable for every small business owner.
We can help you determine if the company is a good option for your lending needs by covering the benefits, drawbacks, and application process. Specifically, we’ll answer these questions and more:
Clarify Capital is a boutique alternative lending company that facilitates multiple small business loan options through its network of 75+ lenders. The marketplace specializes in helping small businesses grow with fast funding at competitive rates.
The company offers both secured and unsecured financing. Secured financing means that there is security for the lender in the form of collateral. Unsecured financing does not have collateral, although you still might be required to sign a personal guarantee.
Co-founders Michael Baynes and Bryan Gerson launched the company in 2017. It is headquartered in New York, NY.
The marketplace provides a simple application and matches you with the best loan and lender options. It aims to put you in the best position possible for lower rates.
Clarify Capital offers several small business loans and funding options. Here are the available financing products.
A short-term loan provides working capital as a large lump sum disbursement, which you repay plus interest and fees in fixed payments. The marketplace offers both secured and unsecured short-term loans.
Term loans are the most common form of business lending. Most people think of term loans when they hear “business loans.” Most traditional lenders, like banks and credit unions, offer business term loans.
The short-term loan is an alternative to a traditional term loan. As its name suggests, the defining difference is how long you have to repay the loan.
The shorter repayment period means less risk for the lender. As such, alternative lenders can typically approve lower-credit borrowers for this form of financing.
A business line of credit provides a credit limit so that you can draw funds as needed. You only pay interest on the money you draw.
Clarify Capital offers revolving lines of credit, which operate like credit cards. As you pay back what your draw, the credit limit replenishes.
This form of business financing is suitable for ongoing projects, seasonal businesses, and covering unexpected costs. It provides funds on demand when you need it the most.
Invoice factoring is a business funding method where a company converts the unpaid invoices in accounts receivable into instant working capital. The factoring company provides a cash advance based on the invoice value. It collects payment for the advance when your customers pay their invoices.
The US Small Business Administration (SBA) oversees the SBA loan program, but you cannot apply directly to the SBA. Instead, business owners must apply to an approved lender or lending marketplace.
The SBA limits what lenders can charge and partially guarantees up to 85% of the loans. This gives the lender the security to offer higher borrowing amounts at low interest rates and extended repayment terms.
The drawback to SBA loans is that they have stringent qualifications, extensive documentation requirements, and take a long time to close and fund. It could take several weeks before you receive the funds for an SBA loan.
Equipment financing provides funding to purchase needed business equipment. The equipment you finance serves as collateral, which is called a self-collateralized loan.
You might be familiar with other self-collateralized loans, such as car loans or mortgages. Equipment loans allow businesses to acquire pieces of equipment when they don’t have the capital to purchase them outright.
Some companies offer equipment loans and equipment leases, but Clarify Capital only provides financing in the form of equipment loans. You can use the loan to purchase equipment across various industries.
Construction companies, landscaping, medical and dental offices, restaurants, gas stations, and beauty salons are just a few businesses requiring expensive equipment.
A merchant cash advance (MCA) provides a lump sum of cash, typically based on your sales history and projected sales. You repay the advance with a percentage of your daily sales.
MCAs are one of the more expensive business funding products on the market. The tradeoff is that they’re very accessible for small business owners with bad credit.
Since repayment is based on your sales, MCA funders pay more attention to your revenue than your credit history. Some MCA companies don’t have a minimum credit score requirement.
The funding arrangement is technically not a loan. Instead, the MCA company purchases a percentage of your future receivables with the cash advance, making it a business-to-business (B2B) transaction.
Most MCAs use factor rates. If you received an advance for $250,000 at a factor rate of 1.25, you’d multiply the advance amount by the factor rate:
$250,000 x 1.25 = $312,500. You’d pay $62,500 for the $250k advance. While you think of that amount as “interest,” the MCA company is purchasing $312,500 of your receivables for $250,000.
The marketplace doesn’t publish set minimums for equipment financing or SBA loans. It indicates that most companies are eligible for equipment financing.
SBA loans generally have stringent requirements. You’ll need excellent credit, established business history, and high annual revenue to qualify for an SBA loan.
The requirements for a merchant cash advance, line of credit, or short-term loan are:
Invoice factoring doesn’t have a minimum credit score. The only three listed requirements are:
There are also documentation requirements. The documents you must provide depend on the lender you work with and the product you receive.
It would be best if you were prepared to provide the following:
While the company markets low or competitive rates, the actual rate you receive depends on your qualifications. As is the case with all lending, the lower your credit score, the higher your costs. Some online reviews suggest you’d need a minimum credit score of 650 to qualify for the most beneficial rates.
It doesn’t publish much information about rates, fees, or repayment. The only way to know your costs is to apply and receive offers from its lender network. Carefully read the loan or funding agreement to ensure you know every cost involved and your repayment frequency so you can determine if your cash flow can handle the payment structure before moving forward.
Clarify Capital offers a business loan affiliate program. Independent Sales Organizations (ISOs) and business loan brokers can sign up to offer the marketplace’s lending products to their small business clients.
The application process is quick and simple. Follow these steps to apply.
You can call Clarify Capital or apply online. It states that the process takes about two minutes to complete either way.
If approved, you’ll receive loan offers from lenders in the company’s network. A Clarify Capital funding advisor will connect with you to help guide you through the loan offers to find the best rate.
The advisor continues to advise as you choose the option you want to pursue. You will complete any additional steps the lender requires at this point.
Depending on the loan type, you could access your funds within 24 hours of approval.
The repayment process largely depends on the lender where Clarify Capital places you. SBA loans and equipment financing carry fixed monthly payments.
Short-term loans and lines of credit can have daily, weekly, or monthly payments. Some lenders let you select your repayment frequency, but most lower-credit borrowers will have daily payments due.
Merchant cash advances are repaid with a percentage of your revenue, called a remittance or holdback rate. Most MCA payments are daily.
Repayment for invoice factoring occurs when your customers pay their invoices. The longer your customers take to pay, the more you get charged.
Clarify Capital doesn’t publish information on renewals. However, customer reviews suggest that borrowers have renewed with them.
The lending marketplace offers a quick and convenient online application with fast funding. You can apply in minutes and receive your funding within 24 hours of approval.
It offers several lending options, including the coveted SBA loan program. Clarify Capital also provides competitive rates and works to get the lowest-cost financing available.
Clarify Capital doesn’t publish a lot of information on rates and fees. This is mainly because the costs depend on the lender you match with.
While it markets low rates, you typically need good to excellent credit for the best rates. Some products might not be available in all states.
Here’s a quick summary of the benefits and drawbacks of Clarify Capital.
Pros:
Cons:
Yes, Clarify Capital is a legitimate lending marketplace. While the company doesn’t have a Better Business Bureau profile, it is verified on Trustpilot.
The lending marketplace has predominantly positive reviews. It has a 4.9 out of 5 rating on 78 Google reviews and a 4.9 out of 5 on over 230 Trustpilot reviews.
The positive reviews praise the company’s customer service, with multiple users mentioning their advisor by name. Several reviews state Clarify Capital did an excellent job understanding their business and financing needs.
Some users commented on the advisor’s ability to work through obstacles. Other common themes include the company being professional, honest, and providing a great experience.
Most reviews state the process was quick and straightforward, and they were able to receive the funding fast. Many users reported being happy with their funding amounts and rates. Multiple users stated they would repeat business with the marketplace. One user who claims they usually don’t write reviews felt compelled to leave a review and give Clarify Capital high marks after their experience.
The few negative reviews primarily come from customers who were denied funding. One user commented that they felt they were given false promises only to be rejected after submitting documents with sensitive personal information.
The user felt the process was a waste of time, and Clarify Capital didn’t respond when they called. There are also a few negative reviews without comments, just a low rating.
Like many alternative lending options, Clarify Capital caters to business owners with low credit scores. However, you’ll still need a minimum credit score of 550 to apply.
You also need an average of $10k in monthly revenue. Most products also require at least one year in business.
There could be other factors that impact your approval as well. Businesses with inconsistent revenue might have difficulty getting approved. Some online reviews suggest Clarify Capital doesn’t work with the adult entertainment, gambling, or marijuana industries.
If you were declined, the denial letter should explain why. You can contact Clarify Capital directly if you need more information.
Fortunately, there are many online lenders and marketplaces to consider if Clarify Capital doesn’t work for you. You should be able to find multiple financial services companies that offer business term loans, lines of credit, invoice factoring, equipment financing, and merchant cash advances.
Online lending options for SBA loans are less common, but there are still plenty of options to consider. You might also be interested in one of the following small business loan programs:
Clarify Capital is best suited for small business owners seeking fast funding at reasonable rates which are comfortable with the company’s lack of online transparency. It’s also a good option for business owners with good credit who are just outside the qualification range for a traditional lender, like a bank or credit union.
Lower credit borrowers won’t qualify for the lowest rates and might be better off applying through a marketplace with a more extensive network of lenders. Business owners with excellent credit, established business history, and high annual revenue would likely qualify for lower-cost business loans.
Based on user reviews and the available information, we rate Clarify Capital at 4.2 out of 5. The small business lending firm has top-notch reviews and a good product offering, but the lack of transparency holds it back.
