Published By Janet Gershen-Siegel at April 2, 2018
Behalf is an online lending company, among several other lending companies online. They offer purchase financing, and also have a virtual MasterCard in order to facilitate funding your purchases. We look at the specifics and drill down into the details.
Behalf is located online here: https://www.behalf.com/.
Their physical address is:
126 5th Avenue
New York, New York 10011.
Behalf keeps their headquarters in New York City with offices in Tel Aviv. You can call them at: (877) 943-9962. Their contact page is here: https://www.behalf.com/help-center/. They have been in business since their founding in 2012. Behalf is backed by venture capital funds from Viola Growth, Spark Capital, Sequoia Capital, MissionOG, Victory Park, and also Vintage.
Behalf’s fees are based on the terms offered to customers. However, their fees rise as the number of days to pay rise, with an apparent cap at 3%. Behalf offers products to both merchants and their business customers.
So for business customers, you select the amount to finance, the amount of time to pay it back, and whether you will pay on a monthly or a weekly basis.
Since the end of 2017, all funding from Behalf is through FinWise, a Utah-chartered bank which is located in Sandy, Utah.
Behalf online lender will make a hard inquiry on your personal credit when you first apply for financing.
There is a maximum line size of $50,000. It can extend this in instant purchase capacity to any business customer. Their minimum transaction size is $300. Plus there is no upper limit on individual purchase transactions.
Monthly fees start at 1%, and there is a fixed monthly rate. However, there are no origination fees and no maintenance fees. Also, you can save 10% on finance fees by choosing a weekly plan.
Advantages to online lender Behalf include a fixed monthly rate to make your budgeting easier. In addition, there is a discounted rate option if you select weekly payments.
Disadvantages include higher fees if you give your clients longer payment terms. As a result, your company will be penalized for providing better payment terms to your customers.
For companies just starting out, allowing for longer payment terms for customers can help to convert one-time customers into regulars.
Because this lender effectively penalizes a company for providing longer terms, this is a strike against using them if your company is a startup trying to build a reputation with your clients. Hence it could be particularly problematic for startup companies.
However, for a not so new company which can readily make payments, the discounted weekly payment plan (and rate) could be an attractive option. Working with this online lender could be a way to get a fast infusion of cash.
However, companies with regular revenue and enough time in business tend to qualify for more traditional financing, including loans from the Small Business Administration.
And finally, as with every other lending program, whether online or offline, remember to read the fine print and do the math. Go over the details with a fine-toothed comb, and decide whether this option will be good for you and your company.
Also, consider alternative financing options that go beyond lending, including building business credit, in order to best decide how to get the money you need to help your business grow. Building business credit will help your business for years to come. It will also add value to your business. This is because business credit is an asset!
As a small business owner, every type of funding you can get bears a second look. And that is certainly also true of Behalf.