Lending Loop Reviews, Ratings And Fees January 2021

Lending Loop is a small business loan marketplace that specializes in peer-to-peer lending. It is the only regulated marketplace of it’s kind in Canada. Business owners have the option to apply for a loan anywhere between $1,000 and $500,000. The entire process is completed online, which means you’ll have more free time to devote to your business and can worry less about financing.

Lending Loop Brings Businesses and Lenders Together

Business owners fill out an application, are evaluated by the Lending Loop team and are then added to the marketplace where potential lenders can commit to lending them the money they need. Once approval has been met, qualified clients can access a variety of financial solutions, any of which can be of great service to a business in need.   

Qualifying With Lending Loop

Although Lending Loop has slightly more lenient standards than many other business lenders in Canada, there are a few requirements that you’ll have to surpass in order to get approved for your small business loan. After all, the more financing you’re applying for, the harder it will usually be to qualify. 

Here are a few basic elements you’ll need to be eligible for a small business loan from Lending Loop:

• A business that’s been in operation for at least 1 year 
• Minimum annual revenue of $100,000
• A personal credit score of 600+
• A personal guarantor (if your credit score is insufficient)

They may also have to examine some of your business’s financial documents, including but not necessarily limited to:

• Detailed and viable business plan
• Balance sheets (summary of assets, liabilities, and stockholder’s equity)  
• Most recent year-to-date income statements
• Fiscal year-end statements from the past 2 years
• Business bank statements from the past 6 months
• Latest CRA Notice of Assessment
• Articles of Incorporation (your business must be a corporation or partnership) 
• Pre-authorized debit form

Remember, every lender has different standards for the clients they’re willing to approve, so be sure to visit the Lending Loop webpage or speak with one of their customer service agents to learn more about their full loan requirements.

How to Apply For a Small Business Loan 

Since Lending Loop offers business financing, the application process will be a bit more complicated than it would be with the average loan product from a more traditional lender. Don’t worry, because the entire process can be completed online within minutes and one of their account managers should be available to help you through each step.

Here’s how the loan application process will typically go:

• Start by creating a Lending Loop account and clicking “Apply Now” 
• You can then follow the necessary steps and fill in your application
• Once the application is complete, you can submit it for review 
• If approved, you must accept their terms and sign your agreement electronically
• Shortly after, you’ll be assigned a specific repayment term
• Your loan will then be listed on the Lending Loop marketplace
• Outside lenders can then examine your listing and may decide to fund your loan

Once your loan has been listed on their marketplace, your profile will remain posted there for 30 days or until your loan has been financed in full. The loan amount and interest rate you’re approved for will depend on which lender funds your business, as well as how strong your finances are. 

Features That Come With a Lending Loop Small Business Loan

Although the Lending Loop Borrower’s Guide states that they offer unsecured loans of $5,000 – $250,000, you may also be able to secure up to $500,000 if you can provide good collateral or receive funding from select lenders. 

If you become a member or apply for a small business loan through Lending Loop, you can also gain access to these helpful features: 

• Flexible repayment terms of 3 months to 5 years
• Adjustable interest rates starting at 5.9% 
• The ability to invest in other people’s businesses with their Auto-Lend program
• The chance to join one of Lending Loop’s partnership programs
• Free credit score monitoring through Equifax 
• Collateral is optional 
• Access to several borrowing options through a number of different lenders

Costs Associated With Lending Loop Small Business Loans

While the financing you receive from a Lending Loop small business loan can be highly advantageous for your corporation, there are a few associated costs that you must take into consideration before you apply, including but not limited to:

• Your loan principal
• Your interest rate (5.9% – 26.50%) 
• Administrative fees ($50 – $100 per month for loans under $250,000) 
• Origination fee (0.3% – 6.5% of the final loan cost) 
• Possible transaction fees ($25 – $60 each time you need to wire funds)

Despite the fact that every lender has different requirements and conditions for their loan products, the best thing you can do is apply when you and your business are financially stable. Essentially, the easier it is for you to make loan payments as agreed, the more financing and better interest rates you’ll be eligible for.

It’s also important to know that Lending Loop will check your Equifax business credit report when you apply. 

Lending Loop FAQs

No matter what financial institution you’re applying with and what type of credit product you’re looking to acquire, it’s always important to research your lender properly and ask the right questions.

What is Peer-to-Peer Lending?

Otherwise known as “P2P”, peer-to-peer lending is when an online service, such as Lending Loop, is able to connect prospective borrowers with different lenders across the country, typically online. As you know, Lending Loop’s main practise is to set corporations up with the financing they need via their marketplace listing page, which is where business loans are posted to await approval from various financial sources, such as banks, credit unions, and alternative lenders.

What Should Be Included in My Business Plan?

Remember, while every lender that Lending Loop can set you up with will have various requirements for their clients, many of them will want to see your business plan before they can approve you. If your plan is solid and has the potential of being lucrative, your chances of approval and loan amount will go up, and your interest rate will go down. 

Any good business plan should contain the following:

• An executive summary (the contents of your plan)
• An overview of your company’s current mission, assets, and financial health
• A SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats)
• Your company’s future goals, mission/vision statements, and financial projections

What Are the Pros and Cons of a Lending Loop Small Business Loan?

Let’s conclude our review of Lending Loop with a quick summary of all the possible benefits and drawbacks that you may encounter once you’re approved. Take a careful look at these pros and cons, as they can drastically impact your business’s financial well-being in both a positive and negative manner. 

Pros

• You can access large amounts of financing from a variety of Canadian lenders
• They report to Equifax, so good payments will improve your business credit score 
• Many different programs and services are available through their website
• Lending Loop serves clients in every province and territory in Canada
• Loan terms and interest rates are adjustable 
• Access to the right financing can help various aspects of your business 

Cons

• You cannot qualify if your business is private or under one year old 
• High rates and fees may apply if your business finances aren’t strong
• Defaulting on payments can harm your business credit report and financial health
• To properly apply, you must present many personal and financial documents