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Find A LenderClearbanc: Overview
Clearbanc is a venture capital that is headquartered in Toronto. However, Clearbanc is unique in its approach as it provides businesses funding for a fee rather than taking an equity stake. It was first established in 2015 by Michele Romanow; investor on CBC’s prime show Shark Tank. Clearbanc is great for small businesses and start-ups as they do not do credit checks. Rather, their approval is based on other factors like revenue, ad performance, and more. Clearbanc is the largest eCommerce investor in the world. They’ve even been featured in a number of business magazines like Forbes and TechCrunch, and work with plenty of huge online companies across the globe, such as Amazon, Facebook, and Google.
How To Become a Clearbanc Client
Since Clearbanc operates mainly online, they can cater to potential clients from almost anywhere in Canada. However, in order to qualify for one of their business advances, your company will have to be based in the field of eCommerce or SaaS (Software as a service). Here are a few other elements you’ll need to get approved:
- A corporation or limited liability company
- Minimum monthly revenue of $10,000
- A business that’s been operating for at least 6 months
- A solid revenue history
Documents Needed To Apply With Clearbanc
Essentially, if your eCommerce or SaaS company has been active and generating a decent revenue for at least 6 months, then it will have a good chance of being eligible for a business advance through Clearbanc. Luckily, applying is relatively easy and can be completed 100% online, as long as you have the proper documentation, such as:
- The company’s Articles of Incorporation
- A piece of personal government-issued identification
- Business bank account information (recent statements, etc.)
- Details concerning the company’s officers & directors
Before you can properly qualify for an advance, the experts at Clearbanc will need to verify that you’re running a legitimate company with a solid foundation. Don’t worry, they will not share your information with any outside parties. If they’re willing to go through the same application process, you can also apply with a business partner if you wish.
Features That Make Clearbanc Stand Out
Now let’s discuss some of the things that set Clearbanc apart from other eCommerce or SaaS business investors. After all, the health of your company is important, so it pays to do your research. Here are just some of the positive features you’ll discover if you become one of Clearbanc’s many clients:
- They offer growth capital advances of $10,000 – $10,000,000
- Their services are available for businesses in 5 different countries
- They were founded by and have partnered with several prominent business experts
- Your information is kept safe using military-grade encryption technology
- All their fees are detailed upfront once you’re approved for an advance
- There is no specific date when you must repay your full advance
- Applying will not affect your business credit score
- They don’t ask for collateral or a personal guarantee for approval
- Special Mastercards are available for marketing expenses
What a Clearbanc Business Advance Could Cost You
Remember, Clearbanc is a business investor, not a business lender. The products they offer are not business loans, but rather cash advances. As such, you won’t have to pay an interest rate, nor a loan origination fee. However, there are a few associated costs that you’ll have to factor into your budget, including but not limited to:
- A flat service fee of 6% – 12.5% of the full advance amount
- Periodic payments from your future revenue (1% – 20%)
As mentioned, Clearbanc states that they will list all your potential fees upfront before asking you to sign on as an official client. The amount you actually end up paying in fees will be based on several factors, such as your predicted day-to-day sales, business metrics, and market data. Although payments can be automatically withdrawn from your business bank account, you can also request they be debited via ACH (Automated Clearing House), which allows credit and debit card transactions.
What Are the Pros and Cons of a Business Advance From Clearbanc?
Whether your business is only 6 months old or has been in operation for years, it’s always important to consider its financial health and choose the best source of financing available. So, while Clearbanc is a highly rated eCommerce investor and is endorsed by many, it’s smart to weigh the benefits and drawbacks of their services before you apply:
Pros
- Qualified businesses can get approved for relatively large advances
- Fees are adjusted according to the strength of your business
- There is no set repayment date
- It’s possible to qualify for a second advance, even if your first isn’t fully paid
- Advances may be funded in as little as 1-3 business days
- No equity or other security is required to gain approval (minimal requirements)
- Fees are listed upfront, so you’ll know exactly how much you’re paying overall
- Services and products are available in 5 countries
Cons
- In some cases, fees may be too high for your business budget
- Defaulting on repayments may result in penalties and damaged credit
- Only eCommerce and SaaS business are eligible for funding (currently)
Clearbanc: Frequently Asked Questions
Is it possible to get approved for a second advance?
- At least 80% of your first advance is paid
- Your business has seen prominent growth since funding began
- Your revenue has increased due to a new income source
- You did not apply for the maximum amount the first time
