Headway Capital Business Loan Review
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Pros and cons of Headway Capital
Pros
- No annual or monthly service fee
- No prepayment penalties
- Can receive funds the next business day
Cons
- Not available to businesses in certain states
- Only one product offered
- Website is not transparent about the required credit score or documents needed to qualify
Headway Capital small business loans review
Headway Capital’s small business loans are offered as a business line of credit. Monthly non-compounding interest rates start at 3.30%, and Headway charges a 2% draw fee in most states. Some competitors offer lower rates for business lines of credit. However, Headway doesn’t charge annual or monthly fees or penalties if you want to pay back what you borrowed early. Since you only need to be in business for a minimum of six months with a minimum annual revenue of $50,000, it can be a good option for newer businesses, especially those with less than stellar credit, as the company looks at more than your credit score to qualify. Though Headway evaluates your personal credit history, you can avoid a hard credit pull in most cases.
Funding is relatively fast and can be expected within the next business day, but you can only receive up to $100,000. Businesses that need to borrow a larger amount may need to look elsewhere. Alternatively, borrowers in select states may also need to seek a different lender, as Headway Capital does not offer its product everywhere.
- Small businesses with less than perfect credit. If you’re looking for a bad credit business loan, Headway Capital could be a good option for you because it looks at more than your credit score when determining eligibility for its loan product.
- Newer businesses looking for financing. Small businesses only need to be in operation for at least six months with an annual revenue of at least $50,000 to qualify for a business line of credit.
- Fast funding. Once approved, small businesses can receive funds within the next business day.
Headway Capital small business financing at a glance
| Product | Loan amounts | Repayment term | Estimated interest | Fees |
|---|---|---|---|---|
| Business line of credit | $5,000 to $100,000 | 12, 18, or 24 months | Minimum 3.30% monthly interest |
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Line of credit
Headway Capital offers a business line of credit in amounts ranging from $5,000 to $100,000. A business line of credit is a flexible form of funding you can draw from as needed, and interest is only charged on the amount you borrow.
Headway Capital’s starting monthly interest rate is 3.30% to, but you may also incur a draw fee of 2%. Keep in mind that that’s the interest charged each month — not the total cost of borrowing. Many lenders advertise either the total flat interest rate or the APR, which includes both the interest and any fees you’ll pay annually. When comparing lenders, make sure you calculate the total cost of borrowing. Headway may also assess late fees of an undisclosed amount if you’re late with a payment.
Repayment terms can be 12, 18 or 24 months, and with each draw you can select a repayment schedule that fits your needs. Headway Capital offers both monthly and weekly repayment plans.
Headway Capital borrower requirements
| Minimum annual revenue | $50,000 |
| Minimum time in business | 6 months to 1 year |
| Minimum credit score | Not disclosed |
To get a business loan with Headway Capital, you’ll need to make at least $50,000 in annual revenue and be in operation for at least six months. While some business lenders have minimum required credit scores needed to apply, Headway Capital states that they take a holistic look at your business instead. What this means in practice is that your business’s revenue and profitability will likely carry more weight.
In addition, Headway Capital limits its funding to businesses in 41 states and the District of Columbia. Businesses based in any of the following nine states are not eligible for a Headway Capital line of credit: Arkansas, Connecticut, Michigan, Montana, Nevada, North Dakota, Rhode Island, South Dakota and Vermont.
Required documents
Headway Capital doesn’t publish the documents needed to apply for a business loan on its website, but most lenders have small business loan requirements that include financial statements, tax returns from the past two years and bank statements.
Alternatives to Headway Capital
| Headway Capital | Fundbox | Bluevine | |
|---|---|---|---|
| Minimum credit score | Not disclosed | 600 | 625 |
| Loan products offered | Business line of credit |
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| Time to funding | Next business day | Next business day | Within hours for an additional $15 fee |
| Starting interest rate | 3.30% monthly |
| 7.80% |
| Maximum loan size | $100,000 | $250,000 | $250,000 |
| Minimum annual revenue | $50,000 | $30,000 | $120,000 |
Headway Capital vs. Fundbox
Both Headway Capital and Fundbox offer a business line of credit that can be received the next business day upon approval. Newer businesses can qualify for startup business loans from Fundbox, since the lender only requires three months of business history. Fundbox also has a lower annual revenue requirement of $30,000. However, eligibility for Headway Capital is determined by more than just a credit score, while Fundbox has a 600 minimum credit score requirement, so Headway may be the better option for businesses with credit issues.
Headway Capital vs. Bluevine
Bluevine offers a higher maximum loan size than Headway Capital, making it ideal for small businesses in need of more funds. However, Bluevine does require a business to make a minimum annual revenue of $120,000, which can be difficult for some companies. But if you need money fast, Bluevine can get it to you within a few hours of approval for an additional wire fee.
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