Lendr does not use traditional loan products but offers two main alternate financing options for small business owners: working capital merchant cash advances and invoice factoring.
Lendr extends working capital advances on the strength of your projected sales, and repayments get deducted from your future sales. Factoring gets deducted out of your accounts receivable. Because debts get covered out of future sales or accounts receivable, Lendr is willing to work with business owners who have lower credit scores, provided they have a consistent revenue record. However, in exchange for assuming this financial risk, they charge higher repayment fees than traditional lenders.
Consider Lendr if you:
- Have trouble qualifying for less expensive financing options
- Have an emergency expense
- Have a time-sensitive business opportunity
Lendr Working Capital Merchant Cash Advances
Lendr provides working capital for expenses such as hiring, marketing, remodeling or equipment purchases, financed through merchant cash advances. Under this arrangement, Lendr advances you a lump sum, which you agree to repay by letting Lendr deduct a percentage of your future sales.
Repayments get deducted from your sales on either a daily or weekly schedule. Payments can be deducted from your credit and debit card transactions or your business bank account.
Lendr merchant cash advance features:
- Amounts from $5,000 to $500,000
- Terms from 4 to 14 months
- Daily and weekly repayment options
- Options for repayments to be withdrawn from your credit/debit transactions or your bank account
- No penalty for early repayment
Lendr’s website does not disclose what repayment rates they charge for their merchant cash advances, but provides an example of an offer. The example uses an advance of $25,000 to be repaid over 9 months with daily repayments of $170.83. Assuming this refers to payments made on business days, and assuming 22 business days a month, this comes out to about $33,824.34 in debt obligations on a $25,000 cash advance, equal to about 135% of the amount advanced.
Consistent with this example, third-party reviewers report that Lendr uses factor rates that differ from traditional interest rates. Whereas repayments calculated with interest rates can vary with the amount of principal you still owe, factor rate repayments use a flat fee based on a multiplier or percentage of the amount borrowed to be repaid on top of the original amount. In the example from Lendr’s website, the factor rate is about 1.35, or 35%.
Lendr also offers financing through factoring. With factoring, you sell unpaid receipts your customers owe you at a discount to a third party. The money you get from selling your invoices becomes cash you can use. Meanwhile, the third party collects the money from your customer, takes out a factoring fee to cover your debt and pays you the remainder.
Lendr offers 2 types of factoring:
- Full-service factoring where you receive the full value of the invoice and pay fees of 2% to 3.5%
- Partial-service factoring where you only receive part of your invoice value, but you pay lower fees starting at 0.5%
Lendr factoring features:
- Terms from 18 to 24 months with an auto-renewal option included
- Payment periods from net 30 to net 47, meaning that they accommodate business models where customers pay you from 30 to 47 days after receipt of goods or services
The most common Lendr factoring offer is 2% for a net 30 business model.
Lendr Lending Experience
Lendr’s site features an online form you can use to begin your application. The form solicits basic information, including:
- Contact information
- Your capital needs
- Your monthly revenue
After you submit the form, a representative will contact you to continue the process. You will then be asked to provide documentation supporting your business ownership and revenue levels.
Lendr will also do a “soft pull” on your credit. This is a type of credit check that will not appear on your credit report and will not lower your credit score.
During the approval process, you will have access to an online portal to check the progress of your application. You can also call or email a representative for updates.
If you meet Lendr’s qualifications, you may be approved for a loan offer in as little as 2 hours. After you agree to an offer, Lendr sends you your funds the next business day. Your repayments begin 2 days after receiving your funds.
Points weighing in Lendr’s favor include:
- Multiple financing options
- Specializes in financing restaurants
- Willingness to work with newer businesses and business owners with low credit scores
- Easy application process
- Fast approval turnaround
Strikes against Lendr include:
- Lack of transparency on their website about repayment rates
- High repayment rates
- Covering repayments from your sales or accounts receivable can hurt your cash flow if you don’t manage your budget properly
To apply for Lendr products, you need:
- Monthly Revenue $10,000+
- Personal Credit Score 500+
- Ownership At least 51% ownership
- Time in Business 1+ Years (6+ Months Startups)
When evaluating applications for approval, Lendr gives more weight to revenue than to personal credit scores.
Lendr Application: What You Need to Apply
To complete your Lendr application process, you may be asked to submit supporting documentation such as:
- Financing applications for all majority owners
- Driver’s license for all business majority owners
- Proof of business ownership, such as articles of incorporation or a business license or corporate tax returns
- Operating agreement
- Recent business bank statements
- Year-end financial statements from the past year
- Year-to-date profit and loss statements and aging reports (reports showing unpaid customer invoices)
- Corporate tax returns and personal tax returns
- Workers compensation certificate
- A voided business check for electronic deposits
Exactly which documentation is required varies based on whether you’re applying for a merchant cash advance or invoice factoring.
Final Say: Lendr Loan Reviews
If you’re making enough revenue and you’re in the market for alternative forms of financing, Lendr may be a tempting solution to get a quick cash injection. But repayment rates are high, so it may save you money to research other options first to see if you can qualify for cheaper rates elsewhere.