Expansion Capital Small Business Loan Review

About Expansion Capital Group

Expansion Capital Group

Our program is fast, simple, and lets you take advantage of those opportunities that just can't wait for a traditional bank loan. American business owners have outstanding vision and perseverance. To build a great company, it takes ingenuity, determination, and dedication. From hiring good people to generating new customers we understand it is tough being a small business owner. That's why solid financial partnerships can be the difference between a growing small business, those that just tread water and those that don't make it. Expansion Capital Group is that valued partner for expansion capital solutions. We are entrepreneurs who have launched and created businesses. Like you, we sweat the small stuff. Our entrepreneurial background gives us great appreciation for what you have built, your determination to continue growing, and an understanding to how working capital can be critical to your success. We provide expert guidance with our team of experienced finance managers dedicated to your success. We strive to be your financial partners for the long haul.

review breakdown

Recommended
92%
Interest Rates
Fees & Closing Cost
Customer Service
Responsiveness

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What is Expansion Capital Group?

Founded in 2013, Expansion Capital Group provides small business owners with short-term working capital loans that range from $5,000 to $500,000. The Sioux Falls, South Dakota-based company specializes in small business funding, expansion capital and fast financing approval.


Lender highlights

Cash flow over credit history. While some lenders rely heavily on credit history when making a lending decision, Expansion Capital Group looks at the overall health of a business, particularly at cash flow, in the loan approval process. The company relies on a platform it developed based on data aggregation and predictive modeling to make decisions about loan approval. Using both traditional and nontraditional sources of information, the company can predict the performance and cash flow of a small business. A business owner with a lien or open bankruptcy might find it hard to get a loan from a traditional bank, but a tax lien of up to $175,000 or an open bankruptcy will not automatically disqualify a business from getting a loan from Expansion Capital Group.

Quick turnaround. Expansion Capital Group gives quotes for funding within 24 hours and, if funding is approved, money can be deposited into a business owner’s account in as little as two days. Some traditional bank loans may take four to six weeks for approval.

No business plan needed. Expansion Capital Group does not require a detailed business plan for loan approval, which is often required when applying for a Small Business Administration loan. How the loan funds are used isn’t dependent on the business plan. Instead, funds can be used for many purposes such as new hires, payroll, new equipment or staff training. With Small Business Administration loans, business owners often cannot use the loan money on expenses not outlined in the business plan.

Higher interest rates. Short-term loans from non-traditional lenders typically have higher interest rates than those from traditional banks. These short-term loans often use simple interest, which is charged once and is a percentage of the original amount you borrow. The interest is not compounded. Unlike an annual percentage rate (APR), usually used for long-term loans, simple interest does not include the origination fee, a fee charged by the lender to cover the cost of processing the loan.

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What does Expansion Capital Group offer?

Expansion Capital Group offers short-term capital funding for three- to 12-month terms and for business owners who need quick capital or might not qualify for a traditional bank loan. These short-term loans use simple interest rates and have an origination fee. Small payments are automatically deducted daily to repay the loan. The size of the payment is based on multiple factors including business cash flow, size of the loan and term length of the loan.

Loan product Loan amount Loan term APR range/ factor rate Fees Time to funding
Short-term loan  $5,000-$500,000 3-12 months Simple interest rate starting with a minimum 3.5 % Origination fee based on the amount of the loan  As little as two business days

Rates current as of 6/5/2018

The simple interest rate is based on the customer’s credit profile. Only businesses with a very strong credit profile or a solid history of repayment with Expansion Capital Group would qualify for the lowest rate.


Eligibility requirements

Loan product Annual revenue Min. business credit score or personal credit score Time in business
Short-term loan  Annual sales or revenue of at least $100,000  Personal credit score of 500  6 months

Additional eligibility factors

Business must be located in the United States and must fall into one of 650-plus business categories approved for Expansion Capital Group loans.

Co-owners of a business must meet the 500 minimum personal credit score as well.

Businesses that are not eligible for Expansion Capital Group loans:

  • Startup companies
  • Companies located outside the United States
  • Companies that have sales or revenue less than $100,000
  • Businesses that have been in operation for less than six months
  • Owners with a personal credit score below 500

How to apply for Expansion Capital Group financing

The Expansion Capital Group application can be completed online or over the phone.

Documents to apply

  • Tax ID number (EIN)
  • Social Security number
  • Average monthly gross sales
  • Last three months of business bank and/or credit card statements

Pros & cons

Pros Cons
Fast approval process and time to funding. Startup companies are not eligible.
Expansion Capital uses healthy cash flow over credit history as main approval criteria. Higher interest rates than a traditional bank loan.
Easy application process. Personal collateral option can put business assets at risk in case of default.

Who is the best fit?

Expansion Capital Group is best for business owners who need short-term funding with a quick approval turnaround compared with a traditional bank loan. Some capital needs might include new hires, new equipment purchases, staff training or payroll expenses. Other good candidates for this loan are business owners who might not qualify for a traditional bank loan because of poor credit history, an active lien, an open bankruptcy or lack of collateral.


Fine print

Expansion Capital Group does not list its rates or fees on its website so make sure you know the fees and total interest you’re expected to pay. Business owners who are eligible for the lowest interest rates will be those with positive credit histories, steady cash flow and a strong history of debt repayments, particularly with a prior Expansion Capital Group loan.

Loan repayments will be deducted daily from your business bank account so it’s important to have the cash flow to cover the payments. Otherwise, you risk overdraft fees along with defaulting on the loan.

This type of short-term loan is not recommended for businesses with low margins, meaning a business without a steady, consistent stream of cash. Low margins can be the result of high operation costs, high costs of products or too low prices. These type of business owners might end up having to borrow more to pay expenses or repay the loan.

In some cases, Expansion Capital Group will approve a personal collateral option, allowing business owners to pledge their business assets in case of a default. If you use personal collateral to secure the loan, you are putting your business assets on the line if you default on the loan.


The bottom line: How Expansion Capital Group stacks up

Expansion Capital Group’s short-term business loans allow business owners to get a loan quicker and with less paperwork than a traditional bank loan. These loans are designed for business owners who otherwise might not qualify for a traditional bank loan and need access to funding fast.

Before selecting a lender, research the rates and terms of several companies. Make sure you know what fees will be charged and exactly how much you’ll repay and how often. Also make sure to evaluate your cash flow,so you know you can cover the daily payments. With any loan, if you suspect you’re not going to be able to make a payment, call your lender first before you default.

Being prepared and investigating all your options will help you make sure you’re getting the best deal on your loan.

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