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QuickBooks Capital: Review and Complete Guide to Business Funding
Small business owners have a variety of reasons they need funding: maybe you have some cash flow gaps because of long payment terms from your customers. Or, maybe you’re ready to take the next step in your business and expand. Whatever the case, finding funding can seem difficult, especially if you’re a small business without much history. But there are options available, including QuickBooks funding through their product QuickBooks Capital, offered by Intuit Financing Inc.
What is QuickBooks Capital?
QuickBooks offers small businesses the option to apply for multiple funding options at once. This service saves many small business owners valuable time they’d spend applying for funding with a bunch of institutions (including QuickBooks Capital) by showing them offers they likely already qualify for based on a soft credit check. The loans range from $1,500 and $150,000 with repayment terms from 6 to 18 months. You can compare the costs of weekly and monthly loan payments so that you can make payments to minimize interest while maximizing your cash flow in QuickBooks.
How does QuickBooks Capital work?
QuickBooks Capital is a loan product for small businesses. Here’s how it works:
1. Make sure all records in your QuickBooks account are up-to-date. Once all your records are up to date, QuickBooks will share your data (with your consent) with its wide range of online lender partners to explore potential business loan options tailored to your needs.
2. Review available offers. Evaluate the personalized offers available to you through QuickBooks loan financing partners, comparing the repayment terms and conditions of each.
3. Choose an offer. Once you’ve compared your offers, take the next step toward securing funding by completing the application process with a QuickBooks business loan partner.
4. Funds are deposited on approval. Once your application for funding is approved, you’ll receive funds directly to your business bank account.
Quickbooks Capital Requirements
Not sure you qualify for QuickBooks working capital funding? Here are the requirements QuickBooks is looking for:
- Your business records in QuickBooks
- Personal and business credit history; minimum score of 620
- Transactions in your business bank accounts
- Revenue of at least $50,000 over the last 12 months
- At least 6 months of activity in your account
- Not located in Alaska (QuickBooks Capital loans aren’t offered there at this time.)
While business collateral isn’t required, QuickBooks bases the loan in part on a personal guarantee. This means you promise to personally pay back the loan if your business is unable to.
QuickBooks Capital Interest Rates & Fees
QuickBooks Capital rates vary based on your personal guarantee and business health, but range from 2.61% to 29.04%. APR is between 9.99% to 34%.
There are no fees for QuickBooks Capital funding – that means no origination fee, no early payment fee, and no application fee.
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QuickBooks Capital Application Process
The first thing you’ll need to get started with QuickBooks Capital’s service is your login credentials, since you’ll be applying from your QuickBooks accounting software. You’ll also need:
- Basic business information (like phone number, address, and email)
- Business employer ID number or (in the U.S.) social security number
- Financial information, such as revenue and tax data
- Personal information and state-issued ID and supporting documents
The application takes just a few minutes, unlike complicated loan applications. To start the process, go to the Capital tab in your QuickBooks Online dashboard. From there, most of the application will be automatically filled in from information in your account. Check to ensure everything is accurate, add any missing details, and submit the application. The QuickBooks Capital team will follow up with any questions or request any additional documentation. You should get a response about whether you are approved for QuickBooks Financing, typically within a few business days.
If you’re approved, you can then choose your loan amount based on the amount you’re approved for. The money will be deposited into your business bank account shortly after that.
Customer Service & Technical Support
If you have any issues with the application process or with the QuickBooks platform as it relates to QuickBooks Capital’s offerings, you can call their phone support for help. There’s also a live chat option so that you can send a quick message to a representative. Searching for your question in the QuickBooks Capital FAQs or in QuickBooks online Q&A community could also lead you to the right information.
QuickBooks Capital Review: Advantages and Disadvantages
Considering the following pros and cons will help you determine if QuickBooks small business loan options are the right business finance solution for the specific needs of your company.
The Advantages of QuickBooks Financing
Streamlined Application Process
Because you can complete the entire process from within your QuickBooks account, QuickBooks Capital’s application process only takes a few minutes to complete
No Extra Fees for QuickBooks Loan
In contrast to many other short-term funding options, QuickBooks Capital’s loans don’t come with any fees, hidden or otherwise. You’ll know the total cost of capital and exactly how much you’ll pay upfront before agreeing to the loan term, along with how much your weekly payments or monthly payments will be.
The Disadvantages of QuickBooks Financing
Invite-Only Financing
One drawback of QuickBooks financing solution is that you have to have a QuickBooks account, and it must have at least 6 month of activity in it. (Meaning you can’t create an account and immediately apply for QuickBooks Capital.)
Limited Marketplace Options
If you don’t like any of the offers available or don’t qualify for QuickBooks Capital, other financing options are offered from lending partners in the QuickBooks Capital Marketplace. However, the options are limited. They may also have additional eligibility requirements.
Top Alternatives to QuickBooks Capital
These alternatives to QuickBooks Capital provide additional options to small business owners, each with its own features, eligibility criteria, and terms. Carefully evaluate and compare these alternative lender options to determine the best fit for your specific short- and long-term funding needs.
Invoice funding
If you don’t want to take on the debt from having a QuickBooks Capital loan or don’t qualify for bank lines of credit, invoice funding (aka invoice financing) might make sense for your business. With invoice funding, a business owner sells unpaid invoices to a factoring company. The business owner receives cash for the unpaid invoice amount, usually less fees, ahead of the payment terms. The business owner’s customer, who is responsible for paying the invoice, instead pays the unpaid invoice amount to the factoring company according to the original payment terms. Invoice financing provides complete confidence knowing that your cash is secured by an expected invoice payment.
Cash flow is the top challenge for small business owners, often due to late payments and long payment terms their customers expect. If you want to speed up cash flow with quick access to funding, FundThrough can help – and it’s integrated with QuickBooks Online for a streamlined funding process. Here are a few common reasons small businesses use invoice funding to secure additional cash flow:
- Making payroll costs
- Buying new equipment
- Paying their own suppliers & operating expenses
- Hiring staff
- Fulfilling large orders or projects that drive growth
Some businesses might be hesitant to use factoring, as they’re worried about customer perception should they factor outstanding invoices. While factoring may be viewed negatively by some clients, it’s not always an indication of financial instability. Proactive business owners use factoring as a tool to optimize cash flow, streamline accounts receivable, and overcome temporary cash shortages while pursuing business growth opportunities. At FundThrough, we work closely with you and your customers, maintaining positive relationships and upholding your business’s reputation.
Additionally, there’s some confusion around accounting for factored receivables in your bookkeeping. Our comprehensive step-by-step guide makes it easy to learn how to accurately record business factoring transactions.
Business-to-Business (B2B) Lending
B2B lending is a type of business financing option where one business chooses to loan funds to another. In many ways, B2B lending services operate in much the same manner as a traditional bank loan, with similar loan terms and conditions. Often, B2B lenders aren’t the financial source making the loans themselves. Instead, they facilitate the funding process between small businesses and their lenders.
Because B2B business loans are term loans much like a bank, they also have many of the same requirements. While these requirements are often not as stringent as those seen with a bank, they do ask that businesses have high credit scores, established business histories with a minimum time in business, and a specific amount of annual revenue for access to a credit limit with the most competitive rates.
Working Capital Loans
Working capital loans are a type of loan you can use specifically for your everyday operations, offered by a traditional financial institution. Short-term cash flow crunches are the most common reason businesses get these short-term loans, whether due to a growth spurt, a new project, or a gap in sales. They can take the form of term loans or cash flow loans with a fixed fee.
Drawbacks of working capital loans come in the form of high interest rates and a complex loan application process. As with any loan where collateral is minimized, direct lenders offset risk by applying high interest rates. These loans are often tied to personal credit scores (as well as your business credit score). It’s important to weigh the pros and cons when you’re considering cashflow finance for small business.
QuickBooks Capital FAQs
Does QuickBooks offer working capital?
Yes, QuickBooks offers working capital through its QuickBooks Capital financing service offered by Intuit Financing Inc. QuickBooks Capital evaluates business financial data within QuickBooks to offer customized funding options, including short-term loans, lines of credit, and cash advances, to eligible businesses.
Is QuickBooks financing just for QuickBooks customers?
Yes, you must be a QuickBooks customer to apply for QuickBooks Capital aka QBO Capital.
How Does QuickBooks Capital Work?
QuickBooks Capital works by leveraging the financial data within QuickBooks to provide customized business funding options to eligible businesses. You can then choose to accept a funding offer, completing the application process with an Intuit financing loan partner. Funds are sent directly to your primary business bank account, and you’ll repay any Intuit business loans according to the agreed upon loan terms.
What is the interest rate on QuickBooks Capital?
It depends on how much you borrow and the interest rate you qualify for, which ranges from 2.61%-29.04%. APR is between 9.99% to 34%. There are no origination fees or prepayment penalties for QuickBooks financing.
What industries does QuickBooks Funding work with?
QuickBooks Capital isn’t industry exclusive. If QuickBooks software makes sense for your industry, so should the financing options.
How much can I get from QuickBooks Funding?
The loans range from $5,000 and $150,000 with loan terms from 6 to 18 months.
What happens after I apply for QuickBooks Funding?
QuickBooks will follow up with any questions and whether you are approved in a few days. If you’re approved, you can then choose your loan amount based on the amount you’re approved for. Loan proceeds will be deposited into your business bank account one to two business days after that.
Ready to Factor an Invoice?
Get started by creating a free FundThrough account, or connecting your QuickBooks, OpenInvoice, or WorkBench account to start funding unpaid invoices. Want more info about how to use QuickBooks Financing? Our A-Z Guide is an excellent source of information!