LoanMe LoanMe
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3 5stars

LoanMe Review

LoanMe
Rating:
Bottom Line:
APRs and fees are on the steep side; payments reported to the credit bureaus; ideal for both newer and established businesses looking to build credit

Full Review:
LoanMe's goal is to provide loans to small businesses who don't qualify for traditional loans or who have urgent short-term cash needs. Many applicants might be lured by same-day funding and less stringent qualifications, but its rates and fees are much higher than other services.


Types of Loans Available

LoanMe provides unsecured business loans in amounts of $3,500 to $250,000 for almost any purpose. It says that its loans are ideal for one-time purchases or debt consolidation, but other suggested purposes include remodeling/upgrades, expansion/new location, buying out a business partner, startup financing, working capital, business taxes, advertising/marketing, payroll and product development. You do not need to provide any collateral for a loan, only a personal guarantee.


Interest rates for loans are rather high, ranging from 24% to 149%, but the service encourages borrowers to pay their loans off as quickly as possible and only charges interest based on the amount of time you are borrowing. Multiple charts on the website show the difference between making minimum payments on the same loan over a 10-year span versus paying it off in 10 days or a couple of months.

During the application process, you will be assigned a grade from A to E, which determines how much you can borrow, your interest rate and your origination fee. Those with higher grades will access the better loan terms.




Qualifying

To qualify for a loan from LoanMe, your business must be profitable, at least two months old and have a business bank account in its name. There is no minimum annual revenue you must make in order to qualify, but you do need a verifiable source of personal income. Additionally, the applicant must have a personal credit score of 500 or more. Considering many small business loan services require at least one year in business and a personal credit score of 600 or higher, these requirements are much less stringent than we've come to expect. Companies just getting on their feet or business owners with less-than-stellar credit may find better luck with LoanMe than some of the other services we review.

Businesses of all types qualify with LoanMe, including home-based consultants and Internet-based companies. Sole proprietorships are also eligible. Applicants in 29 states as well as D.C. can currently apply for loans from LoanMe. States that LoanMe does not lend to include Alaska, Colorado, Connecticut, Florida, Georgia, Iowa, Massachusetts, Michigan, Montana, Nevada, New York, North Dakota, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Vermont and West Virginia.


Application Process

LoanMe has a fairly standard online application process, and you can also apply by phone if you wish. The online application is quick and asks for both personal and business information, including your contact information, social security number, personal monthly income, business tax ID number and monthly business income. The application also asks you to indicate whether you are enrolled in any kind of credit counseling or debt settlement program, which makes sense considering LoanMe puts an emphasis on customers using its services to help rebuild credit for themselves or their business.


Once you have completed the application, you will receive a decision immediately and be offered different loan options to choose from. You can choose to accept one of the loan offers or decline all of them. If you accept, LoanMe will require a copy of your personal ID, a voided check and access to your business bank statements (which it can access electronically). Once this information has been provided and you have accepted the terms of your loan, the money will be deposited into your business bank account.

If you accept your loan terms by 4 p.m. PT, it's possible to receive your loan funds the same day as your application, since LoanMe performs wire transfers at 4:30 p.m. PT every day. However, keep in mind that some banks might not process the transfer within the same day, so it might take longer to access the money on your end.




Repayment and Fees

Terms offered by LoanMe range from two to 10 years (24 to 120 months). Payments are made on a monthly basis, and while the preferred payment method for LoanMe is a monthly automatic deduction from your business bank account, you can also pay by check, cashier's check and ACH. Keep in mind, there may be extra fees associated with alternative payment methods.

LoanMe charges an origination fee which is based on the grade you are assigned during your application. Borrowers with an A grade will be subject to a 5% origination fee, while those with grades of B - E can expect a 10% origination fee. This is significantly higher than many other business loan services we've reviewed. However, the service notes that if you take out a second loan, your origination fee will be smaller — either 3% or 5%. This fee will be deducted from the total amount of your loan before it is deposited into your bank account so make sure you add that when you're requesting your loan amount.


There are no fees to pay off your loan early, and in fact, LoanMe urges customers to pay back their loans as quickly as possible, since you only pay interest for the days you borrow. Whether you want to pay your loan off early or make extra payments, LoanMe encourages customers to call and arrange to do so. Additionally, all payments made are reported to both the personal and business credit bureaus, which is great for businesses and owners who wish to build credit. That said, make sure your payments are on time so your credit is not negatively impacted by late or missed payments.

If you'd like to take out a second loan, LoanMe requires that you completely pay off your initial loan first. Second-time borrowers may be eligible for lower interest rates and higher loan limits, but neither is guaranteed.


Customer Service and Trustworthiness

Support for customers and applicants is offered via email, telephone and live chat. Phone support for loan applicants is offered 24/7, while phone support hours for existing customers are Monday through Friday from 8 a.m. to 6 p.m. PT as well as Saturday and Sunday from 8 a.m. to 5 p.m. PT. Live chat for both new and existing customers is available Monday through Friday, from 8 a.m. to 7 p.m. PT.

LoanMe is an accredited member of the Better Business Bureau and currently has an A+ rating with the organization. However, there are complaints on its file regarding the high interest rates it charges. The company has been in business since 2012 and received its BBB accreditation in 2014.




Conclusion

The interest rates and origination fees with LoanMe are much higher than most of its competitors, but it does offer loans up to $250,000 for newly established businesses as well as lend to business owners who have fair to average credit. The long repayment terms also set LoanMe apart, but with such high rates, it's wise for borrowers to pay back their loans as quickly as possible. If you can't get a loan elsewhere and would like to build your credit, LoanMe might be a good option for your small business.

Compare to Other Small Business Loans

If you have a question or concern we haven't answered on our site, please let us know. Your question will be added to the NextAdvisor Forums so that we and other experts in our community can answer it. Due to volume, we aren't able to respond to every question, but we answer as many as we can.



Service Details

Minimum/Maximum Loan Amount:$3,500 - $250,000
APR:24% - 149%
Terms Available:24 - 120 months
Origination Fee:5% - 10%
Owner's Credit Rating:500+

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