Credit Key vs. Small Business Loans: How Do They Stack Up?

Wednesday, June 5, 2019

We talk a lot about how Credit Key compares to traditional trade credit (spoiler alert: It’s a million times better), but there’s another business financing vehicle that’s worth comparing. Of course, we’re talking about small business loans, which have been an essential financing vehicle for decades.

Perhaps it’s time to replace them as well, though? Let’s take a closer look at how they stack up against Credit Key (another spoiler: Credit Key is still better).


Interest Rates and Cost of Loan

Whenever you’re talking about financing purchases, the interest rate and overall cost of the loan is essential to determining if it’s a good path to go down. Now, there are a wide variety of lenders out there that give small business loans; some are guaranteed by the Small Business Administration (SBA), while others aren’t. As such, the interest rates and costs to take the loan can vary widely from lender to lender and other factors such as loan amount, reason for the loan, credit score, etc. That said, small business loans typically start around 2.5 percent, but can go as high as 99 percent, and that doesn’t even include closing costs!

How Credit Key Stacks Up:    Here at Credit Key, all interest rates are 0 percent for the first month, and typically about 1-3% per month after that. And with no closing costs, Credit Key is definitely going to be a less expensive option.


Loan Size

How much a business can borrow can make or break an opportunity. Loan amounts can also vary by loan program, lender, etc., and is often based on a business’ credit score (and sometimes the CEO’s). It also depends on the term of the loan; where long-term loans (more than 12 months) are typically larger (similar to a mortgage) often in the hundreds of thousands of dollars, short-term loans are typically under $50,000.

How Credit Key Stacks Up:    The maximum Credit Key loan is 12 months, and we can approve loans for up to $50,000. That said, there are scenarios where, with the merchant’s approval, Credit Key can work with a borrower on a larger, longer term loan.


Integration and Approval Time

In today’s fast-paced e-commerce industry, being able to complete the transaction when at the moment the buyer wants to is crucial for closing more sales. And while there are plenty of lenders with online applications for small business loans, those are rarely—if ever—integrated right into the merchant’s checkout system. On top of that, small business loans can often take at minimum a couple of hours to be fully processed, and even a day or two for funds to be transferred.

How Credit Key Stacks Up:    Credit Key integrates directly into a merchant’s checkout page. Our financing request forms can typically be done in just a couple of minutes, and approval is in seconds! The funds go right to the merchant, while the borrower gets invoiced for the transaction monthly.


To be sure, small business loans play a vital role in helping businesses launch, grow, and prosper. But they’re certainly not the most convenient, the least expensive, nor the easiest solution. Luckily, Credit Key is. If you’d like to learn more about Credit Key, schedule a demo. We’re happy to demonstrate how we can help you provide the financing your customers need, all while helping you grow your business.

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