Headway Capital Review

Pros and cons

Pros

• Fast funding time
• Low minimum credit score requirement
• Just 1-year minimum time in business required

Cons

• Lower maximum loan amount
• Draw fees may apply
• Not available in all states

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Loan offerings through Headway Capital.

Headway Capital offers lines of credit to small businesses. Instead of a traditional loan, a line of credit from Headway Capital grants small businesses the flexibility to withdraw funds up to their limit as needed, making it a superb option for managing cash flow or handling unexpected expenses.

See if your business is eligible
for financing through Lendio.

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Things to consider.

Quick funding time.

One of the standout features of Headway Capital is its quick funding time. Once your application is approved, funds can be available in your account in just one business day. This speed is particularly beneficial for small businesses that need immediate access to cash to take advantage of a time-sensitive opportunity or to address unexpected financial needs.

Smaller loan amounts.

While Headway Capital’s maximum loan amount of $100,000 might be sufficient for many small businesses, it’s important to consider that some enterprises might require larger sums of money to achieve their goals. Whether it’s for significant expansions, large-scale inventory purchases, or extensive marketing campaigns, companies seeking higher funding amounts may need to explore additional financing options.

On the plus side, the minimum credit line (and draw amount) is $5,000. Smaller businesses will appreciate this lower threshold, which can still make a huge difference in funding a new project, marketing plan, or inventory purchase.

Fees and interest rate.

When assessing Headway Capital’s offering, it’s crucial to keep in mind the fees attached to their lines of credit, including a 2% draw fee that applies each time you withdraw funds. Although these fees can increase the overall cost of borrowing, they are typically clearly outlined in your agreement, ensuring there are no surprises down the line.

Interest rates are also a vital aspect to consider. They can vary based on your business’s creditworthiness and financial strength, so it’s essential to understand how they impact your total repayment amount. Headway Capital offers a simple interest rate that compounds daily. There are no prepayment penalties.

Borrower-friendly requirements to get a line of credit.

Headway Capital sets itself apart with borrower-friendly requirements for obtaining a line of credit, making financial support more accessible for a diverse range of small businesses. Applicants need a minimum credit score of 625 and a minimum time in business of at least one year, which are relatively low compared to many other lenders that tend to set the bar higher. This inclusivity extends to the minimal operational history requirement of just one year, which opens doors for relatively new businesses that might still be in the early stages of their growth trajectory but require funding to take the next step.

Flexible repayment options.

One of the most appealing aspects of Headway Capital’s lines of credit is the flexible repayment options available to borrowers. Businesses can choose from 12, 18, or 24-month terms, depending on their specific needs and financial situation. This level of flexibility ensures that businesses can plan their finances effectively, with predictable weekly or monthly payments that can be easily integrated into their budgeting processes.

Not available in all states.

Regrettably, Headway Capital does not offer its services in all 50 states. Ineligible states are Arkansas, Connecticut, Michigan, Montana, North Dakota, Nevada, Rhode Island, South Dakota, and Vermont. This limitation means that some businesses might not be able to access Headway Capital’s financial products, depending on their location. If you’re considering applying for a line of credit with Headway Capital, it’s essential to first check if they operate in your state. This can be easily done through their website, where they list the states where their services are available. 

Excellent third-party customer reviews.

In addition to fairly competitive terms and borrower requirements, Headway Capital’s reviews on Trustpilot are excellent at 4.7 out of 5-stars.

93% of these reviews categorize Headway as either “excellent” or “great.” Customers describe the application process as quick and easy, and Headway has also built a reputation for solid customer service. 

Evaluation

Headway Capital is best for:

• Small businesses in need of quick funding. With the ability to fund businesses within one business day of approval, Headway Capital stands out as an optimal solution for small businesses that require immediate cash flow to address urgent needs or capitalize on time-sensitive opportunities.
• Entrepreneurs with lower credit scores. Given the relatively low minimum credit score requirement (625), Headway Capital is an excellent option for entrepreneurs who might struggle to secure financing through traditional banks due to their credit history.
• Businesses looking for flexible borrowing options. The line of credit model offers businesses the flexibility to withdraw funds as needed up to their approved limit, making it an ideal choice for managing varied operational costs and investments without committing to a lump-sum loan.
• Newer businesses with at least one year of operation. With its minimal operational history requirement, Headway Capital is accessible to relatively new businesses that have been operational for at least a year.

Where Headway Capital might fall short:

• Limited coverage. Headway Capital is not available in all states.
• Draw fees and interest rates. The additional costs associated with borrowing, including draw fees and potentially higher interest rates for some applicants, could increase the overall expense of the financial product.
• Maximum loan amount. For some businesses, the $100,000 cap on borrowing may not suffice, especially for those looking to fund significant expansions or large projects.
• Potentially stricter criteria for certain industries. Some applicants may find that their specific business sector can impact their eligibility and the terms offered by Headway Capital.

How to apply for financing with Headway Capital through Lendio.

1. Complete Lendio’s online application form: You will complete a brief online application on Lendio’s website. The form asks for basic information about your business, such as its name, how long it’s been in operation, your monthly revenue, and the amount you’re looking to borrow.
2. Documentation submission: Alongside your application, you will be asked to submit documents that verify your business’s financial standing. These could include recent bank statements, income statements, balance sheets, and tax returns. Having these documents ready in advance can speed up the process.
3. Review and acceptance: Once your application is submitted, Lendio will match you with potential lenders that fit your needs. If Headway Capital is a good fit for your financing requirements, you will receive an offer outlining the loan terms. Review these terms carefully to ensure they align with your business goals and repayment capabilities.
4. Finalize the deal: If you decide to proceed with Headway Capital, you will work directly with their team to finalize the loan details.

The bottom line.

Headway Capital, with its combination of flexibility, speed, and accessibility, provides a compelling option for small businesses navigating the often complex terrain of financial services. It stands out for offering quick funding solutions, accommodating borrowing requirements, and flexible repayment terms, all of which are critical factors for small businesses looking for responsive and adaptive financial resources.

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