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LoanMe Review

By
Matt D'Angelo
,
business.com writer
|
Apr 17, 2019
Home
> Finance
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LoanMe is an alternative lender that provides transparent information about its wide variety of loan products. It offers loans up to $250,000, working capital and fixed payback loans. While LoanMe is a national organization, it only provides services in 29 states. Complicated financing laws per state sometimes limit alternative lenders from operating nationwide. If you're interested in financing with LoanMe, you'll have to be based in Alabama, Arizona, California, Delaware, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio, Oregon, South Carolina, Utah, Virginia, Washington, Wisconsin or Wyoming. LoanMe also provides loans to businesses based in Washington, D.C.

LoanMe

LoanMe

The Best Business Loan and Financing Options of 2019

The Verdict

LoanMe is very transparent on what it offers – you can easily view what amount and rate your business will qualify for. LoanMe provides a great service for small businesses, but it only operates in 29 states.

To view all our recommendations for small business financing, visit our best picks page.

LoanMe is among the most transparent lenders of the companies we reviewed. It provides all loan information directly on its website, with full charts of loan amounts, interest rates, additional fees and minimum monthly payments. If you're looking for specific information on what the company offers, you can get a good idea of where you stand without speaking to a salesperson. 

Rates and Terms

LoanMe separates its offering into tiers based on loan qualifications. These tiers are distinguished by a letter grade, from A (most qualified) to E (least qualified). As the tiers descend, the interest rates go up and the loan amounts go down. This model is standard for alternative lenders. For working capital loans, interest rates range from 24% to 149%. The 149% interest rate is among the highest we found, but it only applies to Tier E applicants. Loan terms also descend from 120 months for A-rated applicants to just 24 months for E-rated businesses.

The fixed payback loans have a different pay model from working capital loans and traditional business loans. LoanMe does not charge an interest rate, so each monthly payment is entirely principal. Instead, the company charges an origination fee upfront. This fee ranges from 14% to 35%, depending on your business's qualifications. Terms also descend from 12 months for A-rated businesses to just six months for E-rated businesses. LoanMe requires an origination fee on all its loans. For working capital loans, the origination fee is 5% to 10% and is paid in addition to monthly interest. The company also breaks down loan amounts and minimum monthly payments on its website.

Paying back the loan is a simple process. LoanMe automatically deducts monthly payments from your business's checking account. This way, you don't have to worry about submitting checks or initiating a payment for your loan. If you pay off your loan early, LoanMe doesn't charge any prepayment fees. Many businesses may get a discount on the interest expense for paying early, but this only applies to working capital loans.

LoanMe only offers one loan at a time per business, so you can't take out multiple loans with the company. If you take out a loan with LoanMe, pay it back on time and are in good standing with the company, you could qualify for more favorable terms on future loans. Despite loaning with the company in the past, you still have to apply and get reapproved based on qualifications like credit and business income.

Company Features

LoanMe has one of the most transparent loan processes of any company we reviewed. After you fill out an online application, the company will review your credentials and issue your money the same day if you qualify. The entire process is fast, because all the terms and information are provided upfront on the website.

Application Process

Interested business owners can complete an online application and get an instant answer on whether they're qualified. You can also call and complete the application over the phone. The online application requires personal and business information, like your first and last name, date of birth, home address, phone number, email address, business name, business start date, the state your business is based in, and your monthly gross revenue. There are also credit authorization disclosure and contact authorization agreements, which allow LoanMe to run a credit check and contact you at the phone numbers you provide in your application. It reviews your application immediately after you send it.

Length

Loan lengths vary based on a business's credit and financial stability. If you're looking for a working capital loan, expect terms of 2-10 years. These are long terms compared to other services, but LoanMe makes it clear that you can pay off the full amount of your loan at any time. There's no fee for paying it back early, and you could even earn a discount on your interest for doing so. Fixed payback loans are much shorter, ranging from six months to a year. These loans are for smaller amounts than working capital loans. 

Qualifications

LoanMe's qualifications and requirements are relatively loose. There are some basic requirements, like having a checking account, online banking capabilities and a valid ID. Beyond this, you have to have a credit score over 500, show at least two months of business income, be a for-profit business and have a bank account in the business's name. If you meet these criteria, you can qualify for a loan with LoanMe. The terms will be based on your credit score and the financial stability of your business. These requirements are some of the least stringent among companies we reviewed.

Collateral

All of LoanMe's loans are unsecured, which means you don't have to put up collateral. LoanMe does require a personal guarantee, which is a legal promise to repay the loan. With a personal guarantee, if your business fails to pay the loan amount, you (or whoever signs the agreement) will be personally responsible. 

Time Until Deposit

LoanMe offers same-day financing, making it one of the fastest financers of the companies we reviewed. The only stipulation is you must agree to the terms of the loan before 4 p.m. EST. The company provides wire transfers every day at 4:30 p.m. EST, so agreeing to the application before 4 p.m. will mean you get your money the same day you applied for a loan. This turnaround time makes LoanMe an ideal service for businesses that need cash quickly.

Special Documentation

Besides a valid ID and proof of two months of business income, which can usually be provided with bank statements, LoanMe doesn't require any special documentation. However, LoanMe will do a credit inquiry, which could affect your credit score.

When to Use This Type of Loan

LoanMe doesn't have any restrictions on what you can use the money it loans you for. Some loan companies limit how the money can be spent, or issue money for specific purchases like business software or equipment. LoanMe's service and loan options make it ideal for quick cash for your business. The same-day money transfer means you can easily pay off invoices, cover payroll, buy business supplies or equipment, or keep extra cash on hand for business-related purchases. LoanMe provides a quick financing option, but its long-term contracts and rates also make it good for financing bigger purchases for your business. Individual terms will be based on your business, but the high origination fees and interest rates mean that it may be best to pay off your loan as quickly as possible.

Reputation and Customer Service

LoanMe provides phone and live chat sales support. As we reviewed companies, we contacted various organizations to learn more about their services. LoanMe is the only company we reviewed that offers live chat sales support. This is a great feature for business owners to ask quick service-related questions. We talked with LoanMe sales representatives via live chat on multiple occasions. In all instances, they were quick to answer our questions without pushing for a sale or trying to obtain our personal or business information.

LoanMe also has a decent online reputation. As of March 2019, it's accredited by the Better Business Bureau and has an A rating. It has 70 customer complaints on the site, though, and a score of 1 out of 5 stars from customers on the site. While low, this isn't the lowest customer rating we found when researching alternative lenders. It has 3.7 out of 5 stars in Google reviews.

Limitations

LoanMe's biggest limitation is that it only operates in 23 states. If your business isn't in one of the states it works with, you likely won't be able to get funding. LoanMe representatives were very upfront with us about this.

Another aspect to be aware of with LoanMe, while this is not a limitation in the traditional sense, is its requirements and how they relate to the loan offerings. LoanMe is one of the only companies that's transparent about having interest rates as high as almost 150%. Getting stuck with a 150% interest rate on a working capital loan (in addition to the origination fee) means you will spend your term paying off more than double the principal you initially loaned. Before signing, make sure you review the terms and ensure that they make sense for your business.

Editor's note: Need a business loan? Click the Compare Quotes button below to have our sister site BuyerZone connect you with vendors that can help.

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LoanMe

LoanMe

The Best Business Loan and Financing Options of 2019

The Verdict

LoanMe is very transparent on what it offers – you can easily view what amount and rate your business will qualify for. LoanMe provides a great service for small businesses, but it only operates in 29 states.

Matt D'Angelo
Matt D'Angelo
Matt D'Angelo is a staff writer covering small business for Business.com and Business News Daily. After graduating from James Madison University with a degree in journalism, Matt gained experience as a copy editor and writer for newspapers and various online publications. In addition to his writing and reporting, Matt edits articles. He reviews small business services, including PEOs, small business loans and GPS fleet tracking services. He's been with Business.com and Business News Daily since 2017.