College Funding Changes In The Pandemic Relief Bill

There are several student financial aid provisions in the pandemic relief package that was included in the Consolidated Appropriations Act of 2021 that passed the House and Senate on Monday, December 21, 2020.

Student Loan Relief

Student loan borrowers are disappointed that the legislation did not include an extension to the student loan payment pause and interest waiver, nor did it provide any student loan forgiveness.

The payment pause and interest waiver is set to expire on January 31, 2021. President-elect Joe Biden will be able to extend it further after he takes office on January 20, 2021. Several possible extension dates have been floated, including April 1, April 30 and September 30, but Joe Biden has not yet said anything specific about the extension, just that it is needed.

Nevertheless, there are some changes in the legislation that affect student loan borrowers. In particular, the tax-free status of employer-paid student loan repayment assistance programs (LRAPs), which was set to expired on December 31, 2020, has been extended for five years through the end of 2025. Such LRAPs will be exempt from income and FICA taxes for both the employee and the employer.

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SULA, a complicated set of limits on subsidized Federal Direct Stafford loans, has been repealed. SULA mostly affected students who transferred from a 4-year college to a 2-year college.

In addition, there have been a few changes concerning the U.S. Department of Education’s Next Generation Processing and Servicing Environment (NextGen) for federal student loans.

  • New student loan borrower accounts must be allocated to loan servicers based on their past performance and servicing capacity.
  • Borrower accounts must be reallocated from servicers for “recurring non-compliance with FSA guidelines, contractual requirements, and applicable laws, including for failure to sufficiently inform borrowers of available repayment options.” Applicable laws include consumer protection laws.
  • NextGen must allow for multiple student loan servicers that contract directly with the U.S. Department of Education.
  • NextGen must incentivize more support to borrowers at risk of delinquency or default.
  • Borrowers must be allowed to choose their loan servicer when they consolidate their federal loans.
  • The U.S. Department of Education must improve transparency through expanded publication of aggregate data concerning student loan servicer performance.

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Changes in College Tuition Tax Breaks

The legislation changes the income phaseouts for the Lifetime Learning Tax Credit (LLTC) to be the same as the income phaseouts for the American Opportunity Tax Credit (AOTC), starting with tax years that begin after December 31, 2020.

The Lifetime Learning Tax Credit will start phasing out at $80,000 for single filers and $160,000 for taxpayers who file as married filing jointly. The tax credit is fully phased out at $90,000 (single) and $180,000 (married filing jointly). Married taxpayers who file separate returns are not eligible.

For comparison, the 2020 income phaseouts for the LLTC were $59,000 to $68,000 (single) and $118,000 to $136,000 (married filing jointly).

The new income phaseouts will not be adjusted for inflation.

In addition, the legislation repeals the Tuition and Fees Deduction, effective with tax years that begin in 2021. This is a permanent repeal, so the Tuition and Fees Deduction will not be resurrected by the next tax extenders bill.

New Funding for Higher Education Emergency Relief Fund

The $81.88 billion for the Education Stabilization Fund includes

  • $54.3 billion for the Elementary and Secondary School Emergency Relief Fund
  • $22.7 billion for the Higher Education Emergency Relief Fund (HEERF)
  • $4.05 billion for the Governor’s Emergency Education Relief Fund, of which $2.75 billion has been earmarked for Emergency Assistance to Non-Public Schools

The Higher Education Emergency Relief Fund previously received $16 billion as part of the CARES Act.

The allocation formula for the HEERF funding is more complicated than the one in the CARES Act, but the allowable uses are similar. Public and private non-profit colleges are required to use at least half of the money for financial aid grants to students. Private for-profit colleges are required to use all of the money for financial aid grants to students. Colleges must provide at least the same amount of emergency financial aid grants to students as they did under the CARES Act provisions, even if their total allocation is lower.

The emergency financial aid grants to students can be used for any element of the student’s cost of attendance or for emergency costs related to the pandemic, such as “tuition, food, housing, health care (including mental health care), or child care.”

The grants must be prioritized to students with exception financial need, such as Pell Grant recipients.

The emergency financial aid grants to students are tax-free.

Most College Students Remain Ineligible for Stimulus Checks

Most college students will remain ineligible for the recovery rebate checks, also known as the stimulus checks.

The legislation includes the same restriction that limits the $600 per qualifying child to children age 16 and younger. Only 0.1% of undergraduate students are age 16 or younger.

College students who are under age 24 are also ineligible, because they can be claimed as a dependent on someone else’s federal income tax return. The remain ineligible even if they are not claimed on someone else’s tax return.

A college student might qualify if they are married and file a joint return with their spouse or if they provide more than half of their own support. About 15% of undergraduate students are married. College students who are 24 years old or older may also qualify. More than 40% of undergraduate students are 24 years old or older.

College students can still claim the $1,200 stimulus checks from the CARES Act in addition to the new $600 stimulus checks, if they are eligible.

Increase in the Maximum Pell Grant

The maximum Federal Pell Grant has been increased to $6,495 for the 2021-2022 academic year.

Eligibility criteria will be pegged to a multiple of the poverty line starting with the 2023-2024 academic year. Students will be eligible for the maximum Pell Grant if they and their parents/spouse, as applicable, are not required to file a federal income tax return or if their adjusted gross income (AGI) is less than 175% to 225% of the poverty line. The higher threshold is reserved for households involving a single parent.

FAFSA Simplification

The legislation simplifies the Free Application for Federal Student Aid (FAFSA) starting with the 2023-2024 academic year. The new FAFSA reduces the number of questions on the form by two-thirds, from 108 questions to about three dozen questions. Follow me on Twitter. Check out my website or some of my other work here

Mark Kantrowitz

Mark Kantrowitz

I am Publisher of, a free web site about borrowing to pay for college. I am an expert on student financial aid, the FAFSA, scholarships, 529 plans, education tax benefits and student loans. I have been quoted in more than 10,000 newspaper and magazine articles about college admissions and financial aid. I am the author of five bestselling books about paying for college and have seven patents. I serve on the editorial board of the Journal of Student Financial Aid, the editorial advisory board of Bottom Line/Personal, and am a member of the board of trustees of the Center for Excellence in Education. I have previously served as publisher of, Cappex, Edvisors, Fastweb and FinAid. I have two Bachelor’s degrees in mathematics and philosophy from the Massachusetts Institute of Technology (MIT) and a Master’s degree in computer science from Carnegie Mellon University (CMU)



University of California Television (UCTV)

How to pay for college is a pressing question for all applicants from the class of 2020. COVID-19 has caused financial uncertainty and many are having to rethink their plans. Jodi Okun, an expert in financial aid, joins Steven Mercer to talk about how the pandemic is impacting financial aid awards, what to do if your family’s financial situation has changed, and how to plan for the future in uncertain times. [Show ID: 35963] More from: STEAM Channel ( UCTV is the broadcast and online media platform of the University of California, featuring programming from its ten campuses, three national labs and affiliated research institutions. UCTV explores a broad spectrum of subjects for a general audience, including science, health and medicine, public affairs, humanities, arts and music, business, education, and agriculture. Launched in January 2000, UCTV embraces the core missions of the University of California — teaching, research, and public service – by providing quality, in-depth television far beyond the campus borders to inquisitive viewers around the world. (

88 Small Business Grants for 2020

While the overall economic climate is not the most robust at the time of this writing, the grant industry has never been bigger. While applying for grants used to be reserved for niche operations, it is now something that all businesses should consider. Below, we’ll outline the best small business grants so you can get the finance that you need without wasting any time on redundant applications. 

A small business grant is a form of financial remuneration awarded once the applicant meets the criteria of the grant. The difference between a loan and a grant is that a grant does not have to be repaid, while a loan does. There are grants available for every possible field that you can think of. Typically, they are granted to people in disadvantaged areas or from specific groups – veterans, women, Hispanics, African Americans, etc.

Many grants are also industry-specific. If your business is involved in assisting a minority group in some way, or in helping the environment, then there are certainly going to be grants available. Keep in mind that there are local, state, and federal grants. Many grant programs are available for those doing business in rural areas.

It takes a long time to submit a relevant grant application. Do your research beforehand and make sure that you are applying to the right program. Federal grants are listed at Grants.Gov, and you can even track these grants on IOS and Android applications. However, there is no Federal grant for the simple growth of a business unless you are a minority group or hoping to solve a very specific problem.

How to Find a Grant for a Small Business

For Federal grants, the place to look is Grants.Gov. It is the chief repository of Federal grants. To apply for federal grants, you typically need to have something special to offer in comparison to state or local grants. You’ll also need to register through this online portal and submit the application form.

The SBA offers a number of State & Federal grant programs, and this is also an excellent place to look for eligible grants. Veterans, minority groups, and women-owned businesses should look on the SBA grant list page to see the available options. You can also find the eligibility criteria through the same site. Other places to spot State and Federal grants include:

How to Apply for (and Win) a Business Grant?

#1 – Find the Grant(s)
Many grants will have similar application procedures. Search Local, State, and Federal grant databases of all grants that you are applicable for. Once this is done, compile a spreadsheet of relevant grants. It’s best to apply for a number of grants at the same time to increase your chances of success. But each grant should be well-researched and given the utmost attention. Make your proposal as strong as possible for each.

#2 – Read the Criteria
A significant amount of grant applications are a complete waste, as the applicants do not meet the minimum eligibility criteria. Before you go ahead and apply for a grant, ensure that you read over (twice, preferably) all the conditions upon which the financial compensation is to be awarded.

#3 – Choose Your Grants
Where possible, review how many people applied to each grant last year, and how many prize winners there were. If there were 20,000 applicants for a single prize fund of $5,000, it may not be worth it unless you have a particularly strong application. Try to gauge your chances of success and narrow down to the grants that are really worth applying for. It’s definitely a good idea to investigate what kind of businesses have won in the past and see if yours is a match.

#4 – Request Forms and Information
For state grants, you will need to contact the relevant agency and ask to be sent the application forms. For local and commercial grants, the information is readily available and the forms can be downloaded from the website.

If you happen to be applying for a Federal grant, you will first need to register as a member on their website. You will be given a username and password, submitting the information through the Federal online portal.

#5 – Have a Clearly Defined Business Plan
A business plan is something that all businesses (large or small) should engage in. The plan does not have to be long or comprehensive. But it has to be precise, concise, and coherent. It should outline who you are, what you care about, what the problem is, and how your company intends to solve the problem. You can submit this plan along with your application in many instances.

#6 – Write the Grant Proposal
To a large extent, the business plan should sum up your business and can constitution much of the grant proposal. The business plan defines what your business really does. But it will need to be tailored to each grant you are applying to.

Grant proposal writing is a niche area, and you can hire a skilled grant writer if you are going after larger grants. The proposal should detail why your business is best suited to the grant, how it intends to assist, what the numbers and statistics are, the skills of the people running the company, and best policies to tackle unforeseen events.

#7 – Fill Out Additional Forms
While this is not mandatory, all information that you can supply to the reviewers will increase your chances of success. If there are any question marks over your business, then it leaves room for doubt. Increased transparency is always preferred.

#8 – Review
Missing information will reduce your chances of success. Read over the application to ensure that all data is correct. Once you have submitted the application, all you have to do is wait for the results. You will typically be notified by email. For Federal grants, you will be given a tracking number to monitor your application.

#9 – Reapply
If you did not qualify for a particular grant in a specific year, then don’t get too frustrated or doubtful about the process. You are against many applicants. Apply to the same grants next year, and mention in your proposal that you got declined last year, but have done much good in the interim period despite the odds. Grant writing is a skill – the more you do it, the better you get. You could be leaving money on the table if you avoid this industry completely.

Best Small Business Grants for 2020 (by Categories)

If you’re looking for a shortcut on grant applications, we’ve listed the best grants per category to shorten down on the research time needed. But keep in mind that the more popular a grant is, the more applications it will tend to receive – and the better your application will need to be. 

Best General Small Business Grants

1. Bill and Melinda Gates Foundation Grant Global Challenge

Bill and Melinda Gates Foundation Grant Global Challenge

The Bill and Melinda Gates Foundation global grant challenge is mainly awarded to non-profit organizations created under 501(C)(3) of the IRS tax code. However, this grant is only available to non-profit organizations. The main stipulation is that your business is orientated towards solving health issues. There are a large number of grants available depending on what problem needs to be resolved. The grant prizes vary, but some of the problems include mental health issues in Africa, hormonal health, economic opportunity, child welfare in impoverished communities, etc.

Read more at:



I Allegedly

This is absolutely amazing. Here’s a $20,000 small business grant and three $5000 grants that you can get for your small business. Good luck. #grants#smallbusiness#stimulus#iAllegedly Here are the four links to all the grants in this video. Good luck to you and your family. Share these with your friends and colleagues as well.……… Please join our email list. We will send you news as it happens. Please send mail, donations and cards to Dan at iAllegedly PO Box 564 Tustin, CA 92781 Please connect with us on social media. ; Email

How to Finance an Acquisition Using an SBA Loan

If you want to buy another business, don’t let a lack of capital hold you back. You’re unlikely to land on that killer idea the first time, so serial entrepreneurship is your best chance of success.  When you spot a business for sale that would thrive under your leadership, but your funds are tied up in your current company, consider an SBA (Small Business Administration) loan to finance the acquisition. 

Hang on – what’s the SBA?

The SBA is a federal agency that helps small businesses get loans. I doesn’t issue loans itself, but it works with lenders to overcome obstacles to business lending, such as guaranteeing loans, reducing risk and sourcing capital. On a deeper level, the SBA funds, licenses and regulates investment funds that in turn lend to small businesses. 

Because the SBA helps foster competition and diversity in the U.S. economy, getting an SBA loan to finance an acquisition is relatively simple. Importantly, it doesn’t matter whether you’ve been declined credit before or have a poor credit history. You might still qualify for a loan with the SBA. That said, it does have certain eligibility requirements, including:

  • Your business must trade in the U.S.
  • You must have invested in the business yourself.
  • You must be a for-profit business.
  • You must have tried but been unable to source funding from traditional lenders.

Related: SBA Approves Simple 1-Page PPP Forgiveness Application for Loans of $50,000 or Less

Why finance an acquisition with the SBA?

Better rates

When you’ve run out of other options, the SBA can save a potential acquisition deal. But that’s not all. SBA loans are also competitively priced (under 8 percent). As a federal agency, the SBA enforces responsible lending and risk management so lenders can afford to charge lower rates and fees. You’re arguably less exposed to predatory practices when you borrow from the SBA than from subprime business lenders. Terms vary from seven to 25 years, giving ample time to repay at an affordable monthly premium.

Better terms

Because the SBA guarantees up to 85 percent of the loan, there’s less pressure on you and your current business to shoulder all the risk. You’ll rarely pay more than a 10 percent down payment, and if you’re borrowing less than $350,000, you won’t always need collateral. That said, you will need to sign a personal guarantee to repay the loan in full. 

Help and support

The SBA can be a helpful sidekick during the acquisition process, too. You might hit a wall of due diligence and legal wrangling, which can deter even the staunchest entrepreneurs from moving forward. The SBA has a vested interest in your success here and can support you right until you sign the purchase agreement with counseling and learning resources. 

Related: Multiple Owners? Here’s How to Prepare for Your Loan Application.

How to get an SBA loan to finance an acquisition

The general-use 7(a) loan is the SBA’s most popular, and it’s ideal as acquisition finance. You can borrow up to $5 million which is more than enough for acquisitions of small or even medium-sized businesses. You can only borrow what you can afford to repay, however, which an SBA-approved lender will determine when you apply.

To begin applying for an SBA loan, you first need a list of SBA-approved lenders in your area. Head to the SBA website, fill in some basic details and its matching tool will produce a list of suitable lenders. Do remember this isn’t an application, and those in the list won’t necessarily give you a loan. 

Next step is to apply, the specifics of which will vary from lender to lender. But be prepared to hand over or have scrutinized the following information:

  • The amount of money you want to borrow and its purpose.
  • A business plan. Because you’re acquiring a new business, this should include post-acquisition plans and why it’s the right acquisition for you.
  • Your financials. The lenders will want evidence you’re capable of repaying the loan. Expect to hand over tax filings, balance sheets, P&L statements and more.
  • Your experience. They’ll want to see your industry expertise in both your current business and the one you’re about to buy should it be in a different sector.
  • Your credit history. Again, don’t stress if your record has a few hiccups. The SBA underwrites a portion of loans and therefore can accept some poor credit applications. 
  • Collateral. How will you collateralize the loan? Will it be stock, property or other assets? Depending on the lender, you might be able to choose what’s off and on the table collateral-wise.  

The SBA and the lender will assess your application and return with a decision. 

Some things to remember

Plan early as getting an SBA loan takes time

If you’ve already found a business you like, apply for the SBA loan now. As you might know, dealing with federal agencies is a long and bureaucratic process. It might be a few weeks before you receive a decision and perhaps a week or two more to receive funds. Get the ball rolling as soon as possible so you don’t lose out to another buyer.

7(a) interest rates are variable

The 7(a) SBA loan type is a variable base rate plus a markup negotiated with your lender. When this base rate changes, the rate on your loan changes, so be prepared for paying a bit more or less each month over the term of the loan. 

Negotiate, negotiate, negotiate

You need to negotiate fees, repayments, collateral, interest and so on with the lender. The SBA limits what the lender can charge, but rest assured the lender will seek the best outcome for itself. Don’t be afraid to negotiate the terms – especially if you’re in a position of strength such as having a good credit rating. 

SBA loans are one of the best forms of credit available. The interest rates are low, and the repayment terms are fair. If you already own a business and are eyeing up another, don’t fret if you don’t have the capital to finance the acquisition. The SBA can help you seal the deal. 

Related: 5 Surprising Reasons to Love the Small Business Administration

By: Andrew Gazdecki Entrepreneur Leadership Network Contributor



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5 Personal-Finance Mistakes That Kill Promising Companies


For most people, personal- mistakes affect only themselves. For entrepreneurs, a personal-finance slip-up can have far-reaching consequences. People who get into tight financial spots while running their businesses must make difficult choices about which bills to pay, which opportunities to let go and which partners to leave.

Founders of startups are no strangers to running lean, but that’s no reason to add to the pile. Good personal-finance habits set entrepreneurs up for success by empowering them to focus their energies on the growth of their companies. Bad habits take their attention away from their businesses and hinder their ability to expand.

Don’t let your focus on your company lead you to neglect your own affairs. Watch out for these common personal-finance mistakes, and take proactive measures to keep your life (and your startup’s growth) on track.

Letting your score slip

No matter how far off the grid you try to run, your credit score follows you. , personal loans, and even insurance premiums all depend at least partially on your credit score. Fail to pay attention to yours, and you could quickly find yourself paying exorbitant interest rates — if you qualify for credit at all.

Take time to familiarize yourself with the different aspects that contribute to your credit score. According to Chime, there’s more than one model that can be used to determine your score, but overall, total credit usage, balances and available credit are most influential. Understand the contributors to your credit score so you can take advance measures to keep your numbers high.

Carrying high-interest debt

Not all debt is bad debt, but some debts can become nightmares if you aren’t careful. Student loans tend to have reasonable rates, even though high balances can make them look intimidating. Payday loans and credit card balances carry much higher interest rates than comparable lines of credit. According to WalletHub, the average credit card interest rate hovers around 19 percent; reports that payday loans charge several times that, sometimes as high as 500 percent.

Take inventory of all your outstanding debts, along with their interest rates. Then, start paying the minimum amount on all but the debt with the highest rate, pouring as much toward that bill as you can. When you finish paying that one, rinse and repeat the process.

Not building an

carries substantial risk, even for people on solid financial footing. Go in without a backup plan, and you could find yourself wondering how to pay rent tomorrow. An emergency fund insulates you from short-term problems and gives you wiggle room when you have to wait a while between income sources.

Vanguard recommends keeping an emergency fund to cover three to six months worth of essential expenses. Depending on your personal situation, you may need more or less. Someone with a working spouse and a modest living situation may not need more than a month of backup, while a single person living in an expensive apartment should keep several months of funding in reserve.

Failing to separate your accounts

You’ve probably heard stories about successful founders who poured their life savings into their companies and came out on top. Many entrepreneurs fund their companies from their own accounts, and that’s a perfectly healthy way to start a company. However, if you start depositing funds from your customers’s orders in the same account you use to pay your electricity bill, you invite massive financial (and legal) headaches into your life.

Even if you’re a solopreneur doing freelance work, make the effort to open and maintain a separate account for your business. Instead of taking funds directly from your company coffers, recommends paying yourself a salary. When you cap your income, you can get a better understanding of where your business stands and build up savings to grow and invest.

Allowing accounts to go to collections

Don’t like to look at your bank accounts until absolutely necessary? Throw away bills without opening them? You’re not alone. Avoiding the reality of bills and budgeting can reduce stress in the short term, but the longer you avoid looking, the worse the situation becomes. Bury your head in the sand long enough, and a bill that you could have easily managed could move to a collection agency.

Not only does a bill in collection severely harm your credit score, but it can also lead to massive stress as debt collectors begin hounding you for payment. Schedule a time on your calendar once a week to go through your mail and check on your online accounts. That 30 minutes of financial upkeep per week could save you and your business thousands in the long run.

Better personal finance means better business finance, and better business finance means a smoother ride to the top. You deserve to focus on your company’s growth, so don’t complicate the matter with missed bills and poor credit. Take some time to get your affairs in order, then devote your energies to your company, confident in the knowledge that you’re on the right track.

Rashan Dixon





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7 Best Business Loans for Startups


Acquiring loans as a startup is no easy task. There are so many loan options available that it is easy to take out the wrong loan and get stuck with the wrong rates. Rates aside, there are many loan options which are not suitable for certain startups, as well as alternative kinds of finance which might easily be a better fit. Below are 7 of the best financial solutions for a startup, depending on the unique circumstances of the company.

  1. The Term Loan – The term loan is the most well-known financing option. There are short, medium, and long-term loans available and each will have specific terms and conditions depending on who you go to for the loan. The SBA (7)(a) is one of the most common kinds of startup loans available to small businesses in the USA. But despite its generous rates, the application process is incredibly difficult to complete.
  2. The Business Line of Credit – The business line of credit is one of the most useful kinds of loan options available to startups. This is because the loan can be drawn upon as needed, and you only pay interest on what you take out. Additionally, the funds can be in the account very rapidly. For these reasons, it is one of the most flexible kinds of loans.
  3. The Equipment Finance Loan – Equipment financing (sometimes called asset financing) is where you take out a loan for the purposes of buying equipment for your new business, such as computers for an IT company or machinery for a construction company. It often works similarly to a term-loan, except you are using the funds specifically to buy company equipment as opposed to more generic needs such as wages or utilities.
  4. The Business Credit Card – A business credit card is similar in many ways to a business line of credit. They are flexible and no collateral is required for their use. The qualifying criteria is also quite low and frequent use and repayment of credit card purchases is one of the best ways to increase your credit score. This is because credit card repayments are reported to business credit bureau agencies, not just personal credit agencies.
  5. Invoice FinancingInvoice financing is a form of financing where invoices are taken by a third party. It is not technically a loan, though the invoice collection companies will often advance about 75% of the cash within as little as 24 hours. The companies will take between 2 – 8 % of the total invoice as a fee. This is very useful in situations where revenue is needed and it takes a long time to collect on invoices.
  6. Venture Capitalism – It is always possible to attain financing through venture capitalism. This is generally better for startups who have a unique and novel business idea and really want to get started as soon as possible. But these startup owners need to understand that they are going to be giving away a significant slice of their businesses.
  7. ROBS – Rollover for business startups (ROBS) is an alternative way to get funding for a startup. It allows startup owners to invest funds from a 401K or individual retirement account into a startup. This allows people to avoid the standard early withdrawal penalties. According to multiple studies, businesses that use ROBS enjoy more success compared to startups that use traditional financing. However, ROBS can be quite complicated to carry out and you definitely need to consult an expert in order to see if its a fit for your business.

Best Loan Providers For Startups

Identifying the kind of loan that works the best for you is only the first step. Different loan providers offer different terms and conditions, and you will need to get in touch with a variety of loan providers to determine which one is right for you. Below are 4 of the best online loan providers in the market.


ondeckOndeck are probably one of the most well-known and reputable lending providers for startups. They have a 9.8 rating on TrustPilot, have an A+ rating with the Better Business Bureau (BBB), and have facilitated over $10 Billion in loans to over 80,000 startups. So what makes this loan provider stand out?

Like many online loan providers, OnDeck provides a hassle-free application process. The application process takes less than 10 minutes and the funds can be transferred into your bank account in as little as 24 hours. The customer service support team at Ondeck is a little ahead of the rest, with specialists who are polite, responsive, and friendly to all applicants. They are thoroughly professional. Ondeck offers term loans up to $500,000 with rates that go as low as 9.99% (though the lowest rates may not always be available). The terms are between 3-36 months. It also provides business lines of credit up to $100,000.

The only disadvantage with Ondeck is that the requirements are a little higher in comparison to other online loan facilitators, though they are still far less stringent compared to banks. Still, some startups may not be able to meet them. The requirements are:

  • At least one year in business
  • $100,000 in gross annual revenue
  • A personal credit score of at least 600



Kabbage is another excellent option when it comes to startup financing. The requirements for Kabbage are quite easy to satisfy for nearly all startups. For the purposes of attaining a loan, Kabbage only requires:

  • 12 months in business
  • $50,000 in annual revenue

The majority of startups should be able to meet these criteria. Even for startups that do not meet the $50,000 in annual revenue, $4,200 per month over the last 3 months is enough for the purposes of qualification. Kabbage is also excellent for startups looking for a business line of credit. A $250,000 line of credit can be applied for in as little as 10 minutes, with a term length of 6,12, or 18 months. This line of credit also comes with a business credit card for ease of use.

Kabbage only offers the line of credit, and this is what it specializes in. But the dashboard, application, and attached credit card make is one of the smoothest, most flexible, and most intuitive lines of credit out there. It makes it easy for startups to track and manage their capital. The funds can transferred to a bank account within 1-3 days or to a connected PayPal account within minutes.

Lending Club

lending clubLending Club is a peer to peer lending marketplace that is disrupting the traditional lending model in many respects. This is because the rates are far lower than many bank loans. At the same time, investors can still earn good returns on their loans. Startups who are looking for a small business loan can get a lump sum of up to $300,000.

As a peer to peer lending marketplace, Lending Club is much different from online loan providers such as Ondeck and Kabbage. Borrowers are evaluated based on their credit score and annual revenue, while investors also have to meet requirements. Loan applicants are assigned a score depending on how good their credit history is. The better the score, the lower the rate.

All Lending Club loans are term loans, and they can be taken out for a variety of different uses, such as working capital or equipment purchasing. The loan application process can be completed in under 10 minutes and the funds can be in your account within 1 – 3 days depending on your bank. Lending Club do not advertised their loan qualifying criteria. However, a minimum credit score of 600 is typically required. No collateral is required for loans less than $100,000, which is an added advantage.


fundboxFundbox provides 3 types of loan – the small business term loan, the business line of credit, and invoice financing. Fundbox is perfect for startups without significant collateral, with a low annual revenue, or with a low credit score. The qualifying criteria for Fundbox are:

  • $50,000 in annual revenue
  • 3 months activity in accounting software

There are no credit score requirements and the maximum loan amount is up to $100,000. This makes it perfect for new startups who need access to small sums of money to get going initially. Fundbox is also one of the few loan providers that offer invoice financing. Startups in the trade industry, professional services, manufacturers, and distributors are ones that can benefit from invoice financing, where invoices can take a long time to come in.

The only disadvantages with Fundbox are that the rates can be a little higher in comparison to other online lenders and that the accounting software must be compatible with the platform (QuickBooks, FreshBooks, Harvest, Xero Clio, Sage One, Kashoo, Jobber or InvoiceASAP). However, fees decrease the more that the Fundbox platform is used. Like most online providers, signup is quick and easy.

Daniel Lewis

Daniel Lewis

Daniel Lewis is an MBA accredited investment professional who wants to assist small business owners to gain access to finance. After going through many channels for funding, Lewis has found that getting the first loan right is vitally important for future success.
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