Working Capital Management

Is QuickBooks Funding Right for Your Business?

QuickBooks is a cloud-based accounting software that allows businesses to manage their finances from anywhere. It has become very popular since it launched in 2002. QuickBooks has become the standard for small businesses because it offers a wide range of features at a reasonable price. The software is designed to help you track sales, expenses, inventory, payroll, taxes, and other financial information, but QuickBooks offers funding options for businesses as well. Here’s what you need to know about QuickBooks Funding to determine whether or not it’s right for your business.

What Is QuickBooks Funding?

QuickBooks provides business funding through their QuickBooks Capital program. This program uses business accounting data from users to determine whether or not they’d be a good fit for financing, and reaches out to them proactively.  

QuickBooks users can also access funding from one of the company’s many lending partners – FundThrough is proud to be one of them. In addition, QuickBooks also offers its own funding solution in the form of short-term business loans provided by Intuit Financing Inc. Loans range from $5,00 to $150,000, with APR between 9.99-34%, and repayment terms from six to 18 months. You can compare the costs of weekly and monthly loan payments so that you can make payments to minimize interest while maximizing your cash flow in QuickBooks

Short-Term Loans from QuickBooks

One funding option that comes directly from QuickBooks is the QuickBooks Capital short-term loan. Similar to any short-term loan, this QuickBooks funding comes in the form of a lump sum access to capital boost. You’re then responsible for repaying the loan, plus interest, via weekly payments over an agreed upon repayment term.

One aspect that sets the QuickBooks Capital short-term loan apart from other short-term loans is that it doesn’t come with any additional fees. The only fee you’ll pay is the interest on the funding loan.

QuickBooks Funding Loan Amounts

QuickBooks funding offers loans ranging from $5,00 to $150,000. This type of funding is ideal for smaller scale financing needs. However, if you’re looking for larger funding options, QuickBooks can connect you with one an online lender partner (like FundThrough) through their marketplace portion of QuickBooks Capital. 

QuickBooks Funding Loans Rates and Fees

The pricing details for QuickBooks funding loans include an APR between 9.99-34%, which is influenced by your business history and credit, as well as the terms of the funding. There are no other fees associated with QuickBooks funding aside from the interest – no origination fee, no prepayment penalties, etc. If you’re accessing funding through one of QuickBooks’ funding partners, they’ll have their own rates and fees for their products.

QuickBooks Funding Loans Repayment Terms

The repayment terms for QuickBooks funding varies from six to 18 months. QuickBooks does not charge a prepayment penalty, so if you want to repay your loan ahead of schedule (and save on interest in the process) that’s not a problem. For QuickBooks lending partners, repayment terms will vary, and there may not even be repayment depending on if you choose a funding solution such as invoice factoring.   

Are You Eligible? QuickBooks Funding Requirements

Not sure you qualify for QuickBooks funding? Here’s what QuickBooks looks at to determine if you’re eligible for a QuickBooks Capital loan.

  • Your business details and records in QuickBooks
  • Personal and business credit history; minimum score of 620
  • Primary business bank accounts you have connected
  • Annual revenue of at least $50,000 over the last 12 months
  • At least 6 months of activity in your account
  • Not located in the U.S. states of Nevada or Alaska (QuickBooks Capital isn’t offered there at this time.)

While business collateral isn’t required, QuickBooks bases the loan in part on a personal guarantee. This means you promise to personally pay back the loan if your business is unable to, which is something to keep in mind before taking on funding.

Again, if you’re accessing funding through a QuickBooks partner, their qualification requirements will vary. For instance, with FundThrough, your business credit and history is less important than your customer’s history, which often makes qualifying for funding easier.

Getting QuickBooks Funding Through their Marketplace

The first thing you’ll need to apply for QuickBooks funding is your login credentials. You’ll also need:

  • Basic business information (like phone number, address, and email)
  • 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

The application process for QuickBooks funding takes less than a business day to complete, unlike complicated loan or line of credit applications at a traditional bank. The seamless integration of your QuickBooks account with QuickBooks Capital makes the process quick and easy.

Step 1. Go to the Capital tab in your QuickBooks Online dashboard. From there, most of the application will be automatically filled in from information in your account. 

Step 2. Check to ensure everything is accurate, add any missing details, and submit the application. 

Step 3. QuickBooks will follow up with any questions and whether you are approved in a few days. If you’re approved, you can then choose your loan amount based on the amount you’re approved for. 

Step 4. Funding will be deposited into your business bank account one to two business days after that. 

The Advantages of QuickBooks Funding

One of the main advantages of QuickBooks funding is the streamlined application process. Because you can complete the entire process from within your QuickBooks account, the entire application process only takes a few minutes.

Another benefit of QuickBooks funding is that unlike many other funding options, it doesn’t come with any fees, hidden or otherwise. You’ll know exactly how much you’ll pay upfront before agreeing to the loan, along with how much your weekly or monthly payments will be – and there’s no prepayment penalty.

Another pro of QuickBooks funding is access to their QuickBooks Capital Marketplace, which gives small businesses access to other funding options. If you’re not interested in short-term QuickBooks loans, you can connect with a lending partner who offers other financing options that suit your unique situation. These options may include short-term or long-term loans, invoice financing, business lines of credit, and even SBA loans.

Finally, QuickBooks offers several customer support tools for their funding customers. If you have any issues with the application process or the platform, you can call their phone support for help. There’s also a live chat option so that you can send a quick message to a representative. The QuickBooks Capital FAQs and QuickBooks online Q&A community is also full of information. 

The Disadvantages of QuickBooks Funding

One drawback of QuickBooks funding is that it’s invite only – you must also have a QuickBooks account, with at least 6 month of activity in it. (Which means that you can’t just create an account and immediately apply for QuickBooks funding.)

Additional funding options are offered from partners in the QuickBooks Capital Marketplace if you don’t like or don’t qualify for QuickBooks funding – but the options are limited. And, they all come with their own eligibility requirements your business may or may not satisfy.

Top Alternatives to QuickBooks Financing

Invoice funding

If you don’t want to take on the debt from having QuickBooks funding or don’t qualify for bank lines of credit, invoice funding might make sense for your business. With invoice funding, a business owner sells invoices to a factoring company. The business owner receives cash for the invoice amount, usually less fees, ahead of the payment terms. The business owner’s customer, who is responsible for paying the invoice, instead pays the invoice amount to the factoring company according to the original payment terms. 

Here are a few common reasons small businesses use invoice funding:

  • Making payroll costs
  • Buying new equipment
  • Paying their own suppliers & operating expenses
  • Hiring staff
  • Fulfilling large orders or projects that drive growth 

Cash flow is the top challenge for small business owners, often due to long payment terms their customers expect. If you want to speed up cash flow with quick access to funding, FundThrough can help – and it’s integrated with QuickBooks Online. 

Business-to-business (B2B) lending

B2B lending is a type of business financing where one business chooses to loan funds to another. In many ways, B2B business loans operate in much the same manner as a traditional bank loan, with similar terms and conditions. Often, B2B lenders aren’t the financial source making the loans themselves. Instead, they facilitate the funding process between small businesses and their lenders.

Working capital loans

Working capital loans are exactly what they sound like: loans you can use specifically for your everyday operations, offered by a traditional financial institution like a bank. Short-term cash flow crunches are the most common reason businesses get these loans, due to a growth spurt, a new project, or a gap in sales. They can take the form of term loans or cash flow loans with a fixed fee. Unfortunately, working capital loans often come with high interest rates, a complex loan application process, and are often tied to personal credit history (as well as your business credit score). 

Learn More & Get Started

If you’re interested in learning more about QuickBooks funding, our A-to-Z Guide on QuickBooks Financing is chock full of information, and answers some of the most popular questions QuickBooks users have about QuickBooks funding.

Ready to get started invoice factoring in Canada and the United States? FundThrough can help. See if you qualify for our invoice funding solution, or connect your QuickBooks account to FundThrough to get started.

Explore fast payments with an experienced fintech

Interested in possibly embedding FundThrough in your platform? Let’s connect!