Small business owners often need funding help to sustain or grow their businesses. Unfortunately, approval rates at traditional lenders remain well below 50%.
Online lenders like US Business Funding are often willing to work with business owners when the banks say no. The company has an approval rate of over 90% for its small business loan products. It provides equipment financing, working capital loans, and SBA loan options.
However, it might not be the right fit for every company. Most of its products require two years in business. Some customers have also mentioned high interest rates and additional fees. Are those extra costs potentially worth it if you can get approved?
This review can help you decide whether US Business Funding is the best option for your company by covering the benefits, drawbacks, and application process. Specifically, we’ll answer these questions and more:
US Business Funding (USBF) is an online lender that provides equipment financing, SBA loans, and working capital funding solutions. The company is an approved SBA lender and a member of the National Equipment Finance Association.
USBF provides funding for small and medium-sized businesses (SMBs). It also provides vendor financing, which allows equipment sellers to offer financing to their customers. Equipment sellers should contact the company about becoming a partner.
Small business owners can apply for equipment financing up to $200k with a simple one-page application and minimal paperwork. It also has higher borrowing amounts when applying for a full financing package, which includes more in-depth information.
The lender launched in 2004 and has funded over $2 billion since that time. It’s based in Santa Ana, CA.
US Business Funding offers equipment financing, working capital solutions, and access to the SBA loan program. Here’s how each program works.
US Business Funding’s equipment financing products include loans and equipment leasing. The programs allow small businesses to acquire essential business equipment on credit. Equipment loans operate like a term loan, except the money goes to the equipment seller.
With an equipment loan, the business owns the equipment and holds the title. The lender maintains a security interest on the title until the loan is paid in full. The business owns the equipment outright after paying back the loan.
Examples of equipment you can finance include:
Equipment leasing is a form of renting equipment. USBF offers various equipment lease options.
Fair Market Value: This type of equipment lease provides low monthly payments and the option to purchase the equipment at its fair market value at the end of the term. Alternatively, you can renew the lease or return the equipment.
Dollar Buyout: This lease option operates similarly to a loan. You’ll have higher monthly payments, but you can purchase the equipment for $1 at the end of the term. It’s also called a capital lease.
Wrap Lease: Existing US Business Funding customers have the option to consolidate debt, close out an old lease, and enter into a new one. It’s a good option if you’re financing more than one piece of equipment.
Business Expansion: Provides up to $35k for equipment financing when you open a new location. There are some rules governing this option, such as the business must be in close proximity, and current ownership must be the same and operating for at least five years.
Refinance Program: Allows businesses with a good payment history to refinance existing equipment debt. The minimum request is $10k, and the maximum is $75k. Refinancing can only cover the cost of the equipment. Debt from soft costs (delivery fees, installation, taxes, etc.), software, or obsolete materials cannot be refinanced.
New Business: Most of the lender’s products require two years in business, but its new business financing program is for companies with fewer than two years. Companies in their first year of operation can get up to $15k. Businesses between 12 and 23 months can get up to $20k.
Sale Lease Back: Companies that recently paid for equipment in cash can sell it to US Business Funding, which then leases it back. Amounts for application-only are between $5k-$100k with terms between 24-60 months.
Working Capital: The lender offers a working capital line of credit of up to $25k to pay for costs associated with a new equipment lease. It differs from the company’s standalone working capital products.
The SBA loan program is often considered the “gold standard of small business financing.” Part of the reason is that the US Small Business Administration (SBA) partially guarantees the loans, sets rules for lenders, and caps interest rates and fees.
However, small businesses must apply to an SBA-approved lender as the government agency doesn’t accept direct applications. An approved lender could be a bank, credit union, or alternative business financing facilitator (like UCS).
US Business funding facilitates SBA 7(a) and SBA 7(a) Express loans. Small business owners can use the loan proceeds for operating capital, to purchase equipment, commercial real estate financing, and more.
US Business Funding provides access to various working capital products, which you can use to cover everyday expenses. The online lender’s working capital funding solutions include small business loans, merchant cash advances, and lines of credit.
How much your business qualifies for depends on your credit history and monthly sales volume. For example, if you apply for a merchant cash advance and have $50k in monthly sales, you’ll usually receive between $50k-$70k.
Most working capital loans are for short-term financing, usually 6-24 months. However, the lender has some business loan options that can go up to 10 years.
Eligibility requirements depend on the financing product. Here’s how to qualify for each one.
Businesses with fewer than two years of history can apply for the “New Business” equipment lease. It has a lower borrowing amount and shorter terms. See above for more information.
Despite the SBA partially guaranteeing the loan, SBA loans have high qualifications. While US Business Funding doesn’t list a minimum credit score, SBA-approved lenders usually have requirements between 650-700. You also can’t have any tax liens, recent bankruptcies, foreclosures, or defaults on previous government loans.
In addition, you must be a US-based for-profit business operating in an eligible industry. Ineligible industries include lending, lobbying, gambling, or illegal activities.
The company does not publish a personal credit score or annual revenue requirement for working capital loans. Some options, like merchant cash advances, have lower credit score requirements.
While it lists “competitive rates,” one of the more common complaints is high rates. The actual rate you receive is based on your credit score, business history, and financials.
The lender indicates it may be possible to get financing with poor credit. However, you’ll need strong financials to offset the perceived credit risk from a bad credit score. You should also be aware that bad credit business financing products typically have much higher interest rates and fees.
USBF doesn’t indicate if a down payment is required for equipment financing. Some business lenders cover 100% of the equipment costs, including soft costs. Check with the lender to see if it requires a down payment.
Most of US Business Funding’s equipment financing options are eligible for tax benefits under the Section 179 Tax Deduction. Ask about potential tax savings when pursuing equipment financing. Consult with your accountant or tax professional to ensure your business is eligible.
It states that business owners can finance new or used equipment. USBF also finances private-party equipment sales.
The lender has a business loan affiliate program. ISOs and business loan brokers can partner with the company to offer its products to their small business clients.
US Business Funding provides a simple application process for most financing options. You could potentially complete the entire process on the same day you apply.
The application process for an SBA loan or equipment financing over $200k gets more complicated.
Follow these steps to apply.
You can start the process by completing the lender’s one-page application. You will provide information about yourself, your business, how much you’re requesting, and your intended use of the funds. For equipment financing, you’ll also include the equipment invoice.
A representative from the US Business Funding team will contact you after submitting the application. If you applied for application-only equipment financing, the call will be the lender’s decision on your application.
For equipment financing over $200k or SBA loans, the call will discuss the next steps for the application process. This could include what documentation you must provide.
You must provide additional documentation if you applied for an SBA loan or a full financing package. Examples of documents you might need to provide include the following:
Once approved, the finance specialist will work with you to finalize the agreement. You’ll work on establishing a loan amount and payment plan that works for your business.
For equipment financing, the lender pays the vendor, which then delivers and installs the equipment. For other loans, the funds are sent to your business bank account.
SBA loans take several weeks to close and fund. However, the lender can fund most other loan requests in seven days or less. Repeat customers can receive their funds within 24 hours.
The post-funding process looks different depending on the loan or lease you received. SBA loans and equipment financing carry fixed monthly payments. The various equipment leases have different options for purchasing the equipment, returning it, or renewing it. Lease interest rates are fixed, and you can pay them off anytime.
Repayment for working capital loans can vary significantly. Some loans will have fixed monthly payments. ACH products, like a merchant cash advance, require automatic payment from your daily or weekly sales.
You’ll have to contact the company about early payoff penalties or discounts. It also doesn’t provide information for renewals other than the equipment warp lease option.
US Business Funding borrower qualifications are lower than most banks. It offers various business funding solutions, including SBA loan options.
The lender provides a convenient application-only process for loans up to $200k. It also has very high borrowing limits when you pursue a full financing package.
Small business owners can access fast funding for most of the lender’s products. You also get a dedicated specialist to assist with the process.
Some customers have complained about high interest rates. There are also comments about extra fees.
The lender does not publish fee schedules or interest rate ranges, making it difficult to compare costs. You must apply to see what rates are available.
Pros:
Cons:
Yes, US Business Funding is a legitimate online lender. The company is Better Business Bureau (BBB) accredited with an A+ rating at the watchdog site. It’s also a member of the National Equipment Finance Association and a AAA-rated member of the Business Consumer Alliance.
Like many financial services companies, US Business Funding has polarized reviews. Many customers praise the lender, while others have strong criticisms.
The company has a 4.6 out of 5 rating on more than 650 Google Reviews and a 3.8 out of 5 rating on over 120 Trustpilot reviews. At the time of writing, it’s also closed 23 BBB complaints in the previous three years.
Positive reviews talk about the fast and easy process. Several customers mentioned the numerous financing options. Most positive reviews also talk about the excellent customer service of the US Business Funding team. Multiple reviews mention the financing specialist by name.
One of the most common themes in negative reviews is aggressive marketing tactics. There are multiple complaints about relentless emails and calls.
Several customers also complained about the high costs. Some state the rate they received was higher than what they were quoted, accusing the company of bait and switch tactics.
US Business Funding boasts a 95% approval rate, but that doesn’t mean you’ll definitely get approved. Also, if you do get approved, the loan amounts, rates, or terms might not work for your business cash flow.
If you were declined, you should receive a denial letter explaining why. You can also contact US Business Funding for more information, such as when you can apply again.
Fortunately, small business owners have many lender options if USBF doesn’t work. Most online lenders can provide working capital loans. You also shouldn’t have issues finding another equipment financing provider.
There are fewer online lenders for SBA loans, but you still have several options. You could also consult a business loan broker or apply to an alternative business lending marketplace. Either option can help match you with lenders and loan options where you’ll most likely qualify.
You might also be interested in one of these small business loans:
US Business Funding is best suited for small business owners seeking equipment financing who can’t qualify for a bank loan. It’s also a good option for working capital loans.
Established companies with excellent credit can likely qualify for more advantageous loan options. The online lender also won’t be a good fit if you want to compare costs before applying. However, the fast funding times and convenient application-only option make it an attractive lending option.
Based on the available information and user reviews, we rate US Business Funding at 3.9 out of 5. It’s a viable option for equipment financing, but the lack of transparency on interest rates and credit scores is a concern.
Disclaimer: The US Business Funding trademark is owned by US Business Funding LLC, and its use herein is for reference purposes only, and it does not indicate sponsorship or endorsement from US Business Funding LLC.
