Kiva vs. Fundible: Which small business lender is right for you?

If you run a small business, you may need a small business loan to help cover expenses or finance an expansion. Kiva and Fundible are two small business lenders that can help, though they serve different markets. Kiva offers microloans while Fundible offers several types of business loans for companies with poor credit.

We’ll break down the differences between these two lenders and help you choose the right small business lender for your company.

Kiva vs. Fundible at a glance

Both Kiva and Fundible offer small business loans for companies that may not have great credit. Fundible offers more types of business loans with competitive rates for entrepreneurs that need business loans for bad credit. Kiva microloans are a better fit for business owners who only need small loan amounts and don’t want to pay fees or interest.

Kiva business loans

Kiva is a unique business lender that offers microloans of $15,000 or less. These are open to many types of business owners, even entrepreneurs seeking funding for a business idea.

What sets Kiva apart from the competition is that it charges no interest or fees. You can borrow money and pay it back without paying a penny more than you receive.

Kiva operates much like a crowdfunding or peer-to-peer lending platform. You’ll need to help source your own loan funds, encouraging people in your community to help fund your loan. That means it may take a while to get the money you want to borrow, but the wait is often worth it, given the lack of interest and fees.

One drawback is that Kiva does require a personal guarantee. Though you won’t pay interest on the loan, if your company can’t afford the payments, you’ll have to pay the loan out of your personal funds.

Pros

• No-cost loans
• Limited documentation requirements
• Crowdfunding model can help advertise your company
• Limited approval requirements

Cons

• Shorter term
• Slow funding
• You have to help source your funding
• Small loan amounts

Fundible business loans

Fundible is an online business lender that specializes in lending to businesses whose owners have less-than-stellar credit. Its website states a minimum credit score requirement of 500, but a spokesperson told Bankrate, you may still qualify for a loan with a score as low as 450.

Unlike Kiva, Fundible offers a variety of loans, including SBA loans and equipment loans for amounts up to $10 million. That makes it more appealing for businesses that have large funding needs.

The drawback of Fundible is that it can be expensive. Some loans carry rates as high as 3.50 percent monthly, which can add up quickly. But if you’re struggling to qualify with other lenders, you might be willing to pay that price.

Pros

• Qualify with poor credit
• Wide variety of loan options
• Borrow up to $10 million

Cons

• Monthly interest rates can get high
• Some loans come from partners, not Fundible.

How to choose between Kiva and Fundible

Kiva and Fundible are far more accessible than many other lenders. Both can provide access to capital for small business owners with bad credit, but they serve different markets. Kiva focuses on businesses that need the smallest of microloans. Fundible business loans are more flexible, covering a variety of options.

Choose Kiva for interest-free microloans

Unlike Fundible, Kiva charges no interest or fees for its loans. You can borrow as much as $15,000 without having to pay a cent.

That means Kiva may be especially appealing for brand-new startups that need a low-cost way to borrow some cash.

Choose Fundible for fast business loans

Fundible offers much faster funding than Kiva. Fundible can put money in your bank account within days. In some cases, Fundible can even fund loans on the same day.

Kiva’s crowdfunding model means that loans can take quite some time to fund. Through crowdfunding, individuals can pledge to offer a small amount to help fund a loan. If you’re asking to borrow $10,000, it can take quite some time to find enough people willing to chip in $10, $20, $50, or $100 each to hit $10,000.

Choose Fundible for accessible loan options

Fundible offers many types of loans, including term loans, lines of credit, SBA loans, and equipment loans. These loans are comparable to traditional loans found at banks and credit unions. The difference is that Fundible has more relaxed eligibility requirements. It’s willing to help small business owners with bad credit and a limited time in business.

Alternatives

Kiva and Fundible both offer loans that even people with poor credit can qualify for. But that doesn’t mean they’re a great option for everyone.

One good alternative to consider is Lendistry, a Community Development Financial Institution. This lender focuses on lending to minority business owners and businesses in low-income areas. That can make it an alternative to Kiva for established businesses that need larger loans.

On the other hand, a traditional business lender like Bank of America could be a good alternative to Fundible for business owners with good-to-excellent credit.

Don’t forget about business credit cards, which can offer short-term financing at no cost, assuming you pay the balance in full each month. They can also offer cash back or other rewards, giving you even more reason to use one.

SBA loans

SBA loans are government-insured loans that lenders offer in partnership with the Small Business Administration. Fundible and other lenders benefit from the insurance the SBA provides, letting them offer larger loans to businesses.

There are also specialized SBA loan programs, such as the SBA Community Advantage loan program. This program helps lenders that focus on underserved communities, letting them offer loans for up to $350,000 through the SBA 7(a) program. There’s also the SBA microloan program, which targets small and minority-owned businesses. These working capital loans have limits up to $50,000.

Bottom line

Both Fundible and Kiva are solid options when it comes to business loans. Kiva focuses on microloans, while Fundible offers several accessible business loans.

Before choosing any small business lender, make sure you’ve done your research. Use a business loan calculator to help you find the most affordable loan based on the loan amount and repayment terms that work for you. Research and compare multiple lenders, looking at interest rates, fees, eligibility requirements and best repayment terms. It may take some time but could save you money and help avoid defaulting on a business loan.

Frequently asked questions

• Can I get a business line of credit with a 500 credit score?

  Getting a line of credit for your business with a 500 or lower credit score will be hard, if not impossible. Even Fundible requires a score of 580 or higher.

• How hard is it to get an SBA 7(a) loan?

  Getting an SBA 7(a) loan can be difficult. Banks may have strict eligibility requirements to qualify for SBA 7(a) loans. You’ll need to research to find the right SBA lender for you.If you don’t qualify for an SBA 7(a) loan, you may be able to get an SBA Community Advantage loan. It’s the SBA 7(a) loan but has reduced loan amounts and is available to business owners in underserved communities.

• What is the easiest SBA loan to get?

  SBA microloans are among the easiest SBA loans to get, thanks to their low maximums and focus on newer companies and business owners in underserved communities. The SBA Community Advantage loan is also more accessible than other types of SBA loans.