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19 Jul Credit Card VS. Business Loan: Comparing Interest Rates

Posted at 08:32h in Small Business Funding by hh

With the growth of marketplace financing platforms that offer an array of loan options like Quote 2 Fund, financial pundits have begun asking: Is using a credit card the most cost-effective means to finance a business? In a recent  Forbes article entitled “Credit Card Companies At Risk From Alternative And P2P Business Lenders,” contributor Marc Prosser sets out to answer that question.

His assessment includes a comparison of credit card APR and other common financing programs:

Comparison of Credit Card APR and Other Financing Products

  • Bank loans: 5-15%
  • SBA loans: 6-9%
  • Credit Cards: Around 16%
  • Peer2Peer and Peer2 Business Loans: 5-30% but typically around 15-30% for all but the most creditworthy borrowers.
  • Non-Profit Lenders: 18-35%
  • Invoice Factoring: 28-60%
  • Alternative Online Lenders: 30-70%
  • Merchant Cash Advances: 80-130%

Source: https://www.forbes.com/sites/marcprosser/2015/08/12/are-credit-card-companies-at-risk-from-alternative-and-p2p-business-lenders/2/

Tags:
business debt, loan against bank account, loans agains future sales, loans against credit card, small business loan


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