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A late payment, an opportunity for expansion, or critical equipment repairs—these are just a few of the reasons a small business owner turns to financing options. Even before the pandemic, nearly half of SMBs sought funding.
Of course, you probably already know the challenges of finding small business-friendly financing:
- Banks often take weeks to process line of credit or loan applications, with no guarantee of approval, and you often need several years of business history in order to qualify.
- Alternative and online lenders take a few business days, but it’s hard to know who to trust.
- Plus, making the mistake of trusting the wrong lender can result in hundreds or thousands of dollars in unnecessary fees and exorbitantly high interest rates.
For Intuit QuickBooks users, these obstacles are all but eliminated, as the popular accounting software now provides QuickBooks financing options.
What Is QuickBooks Financing?
QuickBooks financing, also called QuickBooks Capital, provides a platform for small business owners to tap into various funding options to suit their unique needs.
Currently only available to QuickBooks users who have been with the platform for more than six months, this option provides a convenient way to keep your bookkeeping software and your funding with one company. Intuit Financing Inc. supplies QuickBook Capital direct loans.
Small businesses can take out a direct loan amount of up to $150,000 on a 6-18 month term. The interest rate APR can be as low as 2.61% or as high as 29.04%, and APR ranges from 9.99% to 34%. What interest rate you are offered depends on several factors, including your loan amount and credit score.
When you finance your small business through QuickBooks Capital, you have access to more than just QuickBooks loans. You can also choose funding from some of QuickBooks’ partners in their marketplace (including FundThrough!)
If you’d like more info on managing cash flow in QuickBooks, see this post.
The Benefits of QuickBooks Financing
There are several advantages to using the QuickBooks platform to pursue small business funding. For example, the application process is relatively streamlined because QuickBooks already has access to your accounting documentation, as well as your business history. This makes the application process faster and easier than traditional funding methods suck as banks.
QuickBooks direct loans also come without any extra fees, including an origination fee. This way, you know exactly how much your financing will cost you. That said, you still might find a loan or credit option that better suits your needs within the QuickBooks Capital marketplace. These options will have their own terms, fees, and underwriting process.
How Does QuickBooks Financing Work?
The process for QuickBooks Capital is fairly straightforward:
- Submit your application, which is pre-filled by QuickBooks.
- After reviewing the application and submitting it, you will see offers in the marketplace.
- Select the offer that makes the most sense for your business.
- Get your funding directly deposited into your bank account.
What information will you need to complete the application? It’s simple, and most of it is already in QuickBooks:
- Basic business information.
- Business employer ID number or (in the U.S.) social security number.
- Financial information, such as revenue and tax data.
- Personal information and state-issued ID, and supporting documents.
Repayments are automatically debited in your QuickBooks account.
What Can I Use QuickBooks Financing For?
Typically, a small business owner can use QuickBooks financing for any expense that will help grow their business, including taking on big projects, making strategic hires, purchasing equipment, making payroll, or securing inventory. Financing can also help to ease seasonal strain or cover any gaps related to an unforeseen emergency within your business. But, is QuickBooks funding right for you?
Different financing options available through the QuickBooks marketplace — such as lines of credit or a working capital loan — may require you to to take specific steps in order to maintain eligibility. However, most business financing methods are flexible with how you choose to spend it.
How to Apply for QuickBooks Financing
Applying for QuickBooks Capital is a cinch since QuickBooks automatically pulls your information for the application. What are QuickBooks financing eligibility requirements? They include:
- Revenue of at least $50,000 over the past 12 months
- Primary business bank accounts connected to QuickBooks
- Personal and business credit history
- 6 months of activity in your QuickBooks account
- FICO of 620 or higher
- Zero bankruptcies for at least 2 years
- Your business is located outside of Alaska
Other Options on the QuickBooks Capital Marketplace
QuickBooks financing provides access to more than QuickBooks direct loans. You can also select from several different funding sources, including lending partners.
Business Lines of Credit – Similar to a personal credit card, a business credit line will let you borrow up to your credit limit. You only have to pay interest on the amount you’ve borrowed. However, getting approved for the line of credit your business is often difficult, if not impossible, for small or new businesses. But even if your business isn’t eligible for this option right now, there are many other business-friendly funding options.
Invoice Funding – One of the most popular financing methods, invoice factoring, also called invoice funding, is simple. With this flexible form of financing, you get your invoice paid in days instead of months—at FundThrough, we provide 100% of the invoice amount upfront less a fee—and your customer repays according to the invoice terms. (With invoice financing you get your invoice paid in advance, but you pay back the balance over 12 weeks with no customer involvement. See the difference between invoice financing and factoring here.)
Working Capital Loans – This form of credit is usually a short-term loan used to cover immediate operational needs. Businesses with seasonal cycles tend to benefit most from business loans such as working capital loans. However, it’s important to note that this option typically uses your personal credit score instead of your business credit score. You’ll repay the entire loan over a pre-determined timeframe with regular loan payments. Loan qualifications will vary depending on your needs and the lender.
Fast Facts: QuickBooks Capital FAQ
- How much can I borrow from QuickBooks Capital?
With QuickBooks financing, you can borrow from $5,000 up to $150,000.
- What are the interest rates and APR?
The interest rates for QuickBooks direct loans range from 2.61% to 29.04%
APR is from 9.99% to 34%.
- What is the difference between interest rates and APR?
The interest rate is how much it costs to borrow money per month.
The annual percentage rate (APR) is the yearly cost of borrowing that money. The APR includes the interest rate and additional fees, such as the origination fee, underwriting fee, and other related charges.
- Am I eligible for business financing from QuickBooks Capital or their funding partners?
QuickBooks Capital and its partners all have different requirements for funding qualification. However, to be eligible for QuickBooks financing, you need:
- Revenue of at least $50,000 over the past 12 months
- Primary business bank accounts connected to QuickBooks
- Business and personal credit history
- 6 months of activity in your QuickBooks account
- FICO of 620 or higher
- Zero bankruptcies for at least 2 years
- Your business isn’t located in Alaska
- How will my QuickBooks loan amount be repaid?
QuickBooks will auto-debit your payment until the loan term is complete or you pay off the loan early.
- Is FundThrough a QuickBooks funding partner?
Yes, we are! You may be offered our invoice funding options through the QuickBooks Capital Marketplace. We are also integrated with QuickBooks; when you create an account, your eligible invoices will be automatically pulled into our platform so you can select which ones you want to get funded.