Headway Capital Business Loans 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
- Limited transparency on credit score and documentation requirements
Headway Capital small business loans review
- Small businesses with less than perfect credit. Headway Capital could be a good option for businesses seeking a bad credit business loan because it looks at more than your credit score when determining loan eligibility.
- Newer businesses looking for financing. Small businesses only need to be in operation for at least 6 months with an annual revenue of at least $50,000 to qualify for a business line of credit.
- Borrowers seeking fast funding. Once approved, small businesses can receive funds within the next business day.
Headway Capital’s small business loans are offered as a business line of credit with monthly non-compounding interest rates starting at 3.30% and a 2% draw fee in most states. Some competitors offer lower rates for business lines of credit, but Headway doesn’t charge annual, monthly or prepayment fees, as some lenders do.
Since you only need to be in business for a minimum of 6 months with a minimum annual revenue of $50,000, it can be a good option for newer businesses. It’s also good for businesses 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.
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’s business line of credit ranges from $5,000 to $100,000, which you can draw from as needed and only pay interest on the amount drawn.
Headway Capital’s starting monthly interest rate is 3.30%, 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 annual percentage rate (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 with monthly and weekly repayment plans selected with each draw.
Headway Capital borrower requirements
| Minimum annual revenue | $50,000 |
| Minimum time in business | 6 months to 1 year |
| Minimum credit score | Not specified |
Getting a business loan with Headway Capital requires at least $50,000 in annual revenue and at least 6 months in operation. The lender doesn’t disclose a minimum credit score and evaluates applications on business performance, including revenue and profitability.
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 loan application document requirements, but most lenders have small business loan requirements that include financial statements, tax returns from the past two to three years and bank statements.
Alternatives to Headway Capital
Headway Capital may not be the best fit for:
- Business that need more than $100,000 in funding
- Borrowers seeking low-cost financing
- Companies in states Headway Capital doesn’t serve
If you’re looking for more financing options, you can consider the following lenders.
| Headway Capital | Fundbox | Bluevine | |
|---|---|---|---|
| Minimum credit score | Not specified | 600 | 625 |
| Loan products offered | Business line of credit |
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| Time to funding | Next business day | Within two business days |
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| Starting interest rate | 3.30% monthly | 4.66% for 3 months | 7.80% |
| Maximum loan size | $100,000 | $250,000 | $250,000 |
| Minimum annual revenue | $50,000 | $100,000 | $120,000 |
Headway Capital vs. Fundbox
Both Headway Capital and Fundbox offer a business line of credit that can be received quickly; the next business day upon approval for Headway Capital or within two business days for Fundbox. Newer businesses can qualify for startup business loans from Fundbox, since the lender only requires 3 months of business history. 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 requires a business to have 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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