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Clearco Review 2022

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Everyone knows that owning a business is difficult, no matter how big or small it is. But it’s even harder to get funding for crucial business functions, like ad campaigns or starting a new product line. It can be even harder for online or e-commerce businesses to obtain this sort of funding. But there are so many online businesses these days that they must be getting their funding from somewhere, right?

More than 80% of businesses in the United States never get the funding they need to purchase equipment, products, pay various expenses or make payroll. That’s where Clearco (formerly Clearbanc) comes in. Clearco is a business financing company that offers equity-free capital to online businesses. We’ll tell you everything you need to know about Clearco in our Clearco review.

What is Clearco?

Of course if you’re reading this Clearco review, you’re likely wondering what it is and how it works, so we’re going to break it down in this section.

Clearco is a revolutionary lending platform that functions entirely online, and services online companies. They provide online companies with an easy way to gain the financing needed to grow their businesses.

The most interesting part of Clearco is the fact that they determine whether you qualify for a cash advance, not based on your credit score, but on the performance of your business. Your payments are based on your company’s monthly revenue, so they fluctuate and allow for things like a slow month or lull in business.

Clearco’s History and Reputation

An important factor for some people reading this Clearco review is learning about the company’s history and reputation. This gives people a good picture of what the company is all about and where they came from.

Clearco was first started in 2015 by entrepreneurs and seasoned Canadian investors. It’s goal was to give businesses an alternative to seeking venture capital from wealthy investors, investment banks or financial institutions which was the standard funding source for startup businesses until recently. These companies that were forced to use venture capital say that the money they received barely covered a few of their biggest expenses.

The company’s headquarters are located in Toronto, and they’ve partnered with big name investors like Emergence, Inovia, Founder’s Fund, and Highland Capital. The company’s co-founders, Andrew D’Souza and Michele Romanow (of CBC’s Dragon’s Den) raised $420 million in startup funds to get the company off the ground. During its first five years it was called Clearbanc, but because they didn’t want to exist as JUST a bank, they changed their name and now offers other services.

In 2021, Clearco had invested over $2 billion in more than 4,600 businesses. Since then, those numbers have only risen.

Here’s the part that some readers of this Clearco review will be most interested in: their reputation. Since their 2015 start, Clearco has become one of the biggest eCommerce startup investors.  Some of the big name companies that Clearco works with include:

  • Amazon
  • Google
  • Square
  • Pinterest
  • Stripe
  • Twitter
  • Facebook
  • PayPal
  • Snapchat
  • Shopify
  • Bigcommerce

Who is Clearco For?

You may be reading this Clearco review and wondering whether it’s a good fit for you and your business.

Here’s a list of the industries that can get the most benefit from Clearco’s services:

  • SaaS (Software As A Service)
  • Subscriptions companies
  • eCommerce
  • Online retailers
  • Marketplace (beta right now)
  • Mobile apps with in-app purchases
Clearco Review 1 - Comparewise

Do I Need Good Credit to Apply for Clearco?

If you’re a business owner with bad credit reading this Clearco review and wondering if you’ll qualify for funding, don’t worry. Clearco doesn’t screen companies based on their credit scores, but on the amount of revenue they pull in per month. (You have to bring in $10,000 monthly revenue.) They don’t have a minimum credit score requirement, and they don’t even run a credit check during the application process. As long as you meet their monthly revenue requirement, that’s all they care. So low credit isn’t an eligibility factor for Clearco

What is the Minimum Borrowing Amount for Clearco?

Many business owners reading this Clearco review are probably wondering what the least amount of money they can borrow and pay back is. That’s a logical concern. No one wants to have to pay back more than they can afford and just remain in a state of perpetual debt.

Clearco’s minimum borrowing amount is $10,000. We also feel the need to point out in our Clearco review that Clearco doesn’t report repayment to credit bureaus, which means that your credit score won’t improve from making payments- even if you make your payments on time. But it also means that it won’t hurt your credit score unless you make late payments.

What Do You Need to Apply for Clearco?

You’re likely reading this Clearco review and wondering what sort of paperwork that they require and how difficult it is to apply for funding through Clearco.

Here are the documents and information you’ll need to apply for Clearco:

  • Your bank account number and routing number
  • Some business information, such as your EIN (Employer Identification Number)
  • Information about each director or officer
  • Articles of Incorporation or Organization
  • Government-issued ID
Clearco Review-Founders-Comparewise

How to Apply With Clearco

We won’t just tell you about all of the fabulous benefits of using Clearco in our Clearco review. Here’s how to complete the application process:

  1. Create an Account

Like most online services, you’ll need to create an account. You’ll need the information listed in the previous section to set up an account. Once you’ve entered all the information, click the button that says “Calculate Now”.

  • Speak to a Representative

After you’ve created an account and entered your information, a Clearco representative will contact you within 1-2 business days. This contact doesn’t mean you’ve been approved for funding, but that you’ve been approved to complete the application process. This step is more for Clearco and serves as a screening process to weed out companies that don’t meet the requirements to apply.

  • Review Offers

The next time you log into your account, you’ll be presented with various loan offers to consider. You’ll also be given information about how to upload documents and get through the subsequent steps of the application process.

  • Connect Your Sales and Payment Accounts

The next step is to allow Clearco to connect with your online sales and payment accounts (like Stripe, PayPal or Square). This step is important because Clearco deals exclusively with online businesses, and because their business is conducted online, so are their payments and financial transactions.

  • Connect Digital Marketing Accounts

Next, you’ll integrate Clearco with your online digital marketing accounts (think Google, Amazon, or Facebook). This step may seem like a pain, but it will only take around 20 minutes to complete.

  • Sign Loan Documents

After you’ve entered all of your information and connected your accounts, you’ll be given a loan contract. The contract will include information like your borrowing amount, repayment percentage, and fixed fee. Once you sign this document and submit it, you should see funds in your account in 24 hours or less.

Clearco Loan Percentages

We found out a bit about Clearco’s loan percentages while we were investigating them for this Clearco review, and we feel like you need to know about them for the sake of transparency.

Clearco’s loans are based on two different percentages. The first is a fixed percentage of your future sales. The second is a flat rate fee, which can be anywhere from 6- 12.5%.

The first percentage is based on your business’s revenue stream. If your business takes in high levels of revenue consistently, then your percentage can be as low as 1%. But low-earning businesses can get nailed with repayments as high as 20% of their sales revenue.

The second percentage is based on participation with Clearco’s partners. We found during research for this Clearco review that if you go to their website you can see a list of marketing businesses like Google, Twitter, Facebook and Amazon. If you use your Clearco funding to buy ads from their partners, then you’ll get a flat rate of 6%. They also provide inventory financing for people who own eCommerce businesses. They don’t clearly state whether this offer provides you a 6% flat rate, as well.

If you decide to use the funding you receive for any reason other than inventory or digital marketing, then you can expect a rate as high as 12.5%.

Clearco Review-Saas-Dashboard-Comparewise

Is My Information Safe with Clearco?

Of course, when you apply for any sort of funding assistance you have to provide a lot of sensitive information. It’s perfectly understandable to wonder if your information is protected so that you don’t have to deal with identity theft or someone stealing money from your bank account, so it was important to us to include a section in our Clearco review about security.

Clearco uses military-grade encryption, which means that any information you share with them is safe. Other users can’t see, store or modify your account information or your bank details.

Does Clearco Require Collateral?

A lot of people reading this Clearco review are wondering what sort of collateral they’ll be required to offer up. The good news is that Clearco doesn’t require you to offer up any collateral. So if you happen to default on your loan, they won’t be able to take your personal assets. However, we don’t advise defaulting on these loans if you can avoid it because doing so will put you further into debt and of course it will also negatively impact your credit score, which will make it difficult to receive loans in the future.

Post Funding

Another important part of this Clearco review is letting you know what happens after you’ve received your funding from Clearco.

You’ll start repaying the loan immediately when you complete sales. They will take a percentage of your sales, which you’ve indicated in your application. Unfortunately, once you’ve signed the contract, you can’t change the fees or the repayment percentages.

There’s not a due date for payments. Instead, you simply make payments until the debt is paid. That’s it. Clearco doesn’t care how long it takes for you to pay them back.

You can apply for more funds after you’ve paid off your loan if:

  • You’ve experienced a drastic increase in revenue since last applying
  • You’ve paid off at least 80% of your total loan payment
  • You didn’t take the maximum borrowing amount when you took the first loan
  • Your business has a new source (or sources) of income.

Is Clearco Better Than Other Avenues for Funding?

If you’re reading this Clearco review because you’re in need of funding for your new business, you’re probably wondering what the difference between Clearco and other funding options is.

Most lenders typically won’t consider funding startup businesses. Worse still, many financial institutions and other lenders disqualify many small business owners because of poor credit scores.

We found while writing our Clearco review that Clearco will lend to businesses that have been open for 6 months and meet their monthly revenue requirements. Your credit score isn’t even checked, so it’s not a concern. If you sign up for digital marketing through one of their partners, then you can get a fixed fee of only 6%. That’s significantly less than the percentages that other financial institutions and investors typically charge. And the fact that Clearco doesn’t run credit checks makes funding an option for many business owners who would have otherwise been disqualified.

One of the biggest advantages we can talk about in our Clearco review is that Clearco has high loan amounts. You can receive a loan of between $10,000- $10,000,000. There’s no other lender of this type on the market that will lend out quite that much for high-revenue startup tech companies.

Another thing we discovered while we were reading about Clearco for this Clearco review is that other financing companies have now started prioritizing business performance over credit scores to determine the financing eligibility of companies. This means that since Clearco was one of the first companies to use this system, they’ve literally led the charge to change the industry standards.

Clearco Review 2 - Comparewise

Does Clearco Own Part of My Company Because it Invested?

This is an excellent question that we’re sure some savvy business owners have been asking themselves while reading our Clearco review.

Sure, Clearco will make an investment in your company, and you’ll pay that money back with interest. However, unlike other investment companies Clearco doesn’t take any equity stakes in your company.

What is an equity stake? An equity stake is a financial term that refers to the part of a company that a person or organization owns. It’s represented by the amount of shares the person or organization has. Investors typically give business owners capital, and the business owners provide them with equity stakes in exchange.

So, it’s refreshing that Clearco doesn’t make you adhere to these typical investment traditions.

Pros of ClearcoCons of Clearco
+ Quick application & approval
+ Up to $20M in funding
+ No collateral required
+ No credit check required
– Limited industries
– Need $10,000+/month in revenue

Drawbacks of Clearco

We won’t just fill you full of hot air and tell you how great Clearco’s services are. In an effort to provide an unbiased Clearco review, here are some of the drawbacks of using Clearco.

It’s important that we mention in our Clearco review how restrictive Clearco is when choosing clientele. Clearco currently exclusively caters to only six different industries, so if you’re in another industry you shouldn’t even waste your time applying. On the one hand, this means they have extreme confidence in these specific industries, but on the other it can be annoying if your business doesn’t fall into one of their chosen industries.

Another drawback we need to mention in our Clearco review is that they stipulate that your business make $10,000 a month in revenue. Lower-earning businesses need not apply.

Clearco only works with corporations or LLCs (Limited Liability Companies). So if you’re reading this Clearco review and you’ve chosen a different business structure, you can go ahead and pass on Clearco.

Clearco allows businesses who have been operational for only six months to apply, but they make the stipulation that they’re only eligible if they have consistent revenue for six months, as well. They don’t specify what “consistent revenue” means for them, either. But it’s safe to say that if you’re a business owner reading this Clearco review who experiences revenue dips or had financial trouble when you were first starting up, you won’t qualify for Clearco.

Another drawback we found while doing research for our Clearco review is that Clearco doesn’t report repayments to credit bureaus. So if you’re making your payments on time, it doesn’t raise your credit score at all. The only incentive that you have to make your monthly payments on time is that late payments could affect your credit score. We feel that Clearco could have incorporated a credit-boosting aspect to repayments by simply reporting them to credit bureaus. This would drastically help out small online startup businesses.

Clearco Review - Card - Comparewise

What Happens if I’m Turned Down by Clearco?

It’s logical to read our Clearco review and wonder what to do in the event that your application is declined by Clearco. Of course, there’s a chance of this happening, which is why there’s an application process to begin with.

If your application is rejected, it’s likely because you don’t meet their vague description of “consistent revenue”. If you make the required $10,000 per month in revenue, they can still decline your request for funding if they notice fluctuations in your cash flow. It makes sense when you think about it from their point of view: you’ll need to make daily payments, and if you don’t make daily sales consistently then you can’t make daily payments.

However, if your application is declined you can still check out things like terms, rates and borrowing amounts, which you can use to go to other financing companies and get the loan you want. If you don’t qualify for Clearco, consider a company that allows for weekly, bi-weekly or monthly payments as opposed to Clearco’s daily payments.

Do e-Commerce and SaaS Businesses Have Limited Financing Options?

This is a misconception that Clearco seems to use in order to gain business. It was made pretty plain to us while we were writing this Clearco review that business owners in the e-Commerce and SaaS industries aren’t as limited when it comes to financing options as they once were. Sure, they were drastically limited a few years ago, but everyone has woke up the the reality that these non-traditional industries are the future of the business world. Many financing companies are working with online business owners now, which means you can choose from a variety of lending services to find the best one to suit your needs.

Alternatives to Clearco

As part of our unbiased Clearco review, we know that Clearco isn’t for everyone. So, here are a few alternatives to check out:

SharpShooter

If you’ve been in business for 100 days, you can get an unsecured term, merchant cash advance or invoice factoring loan from SharpShooter. You’ll need a minimum monthly revenue of $10,000/month and you can get a loan of $500-$250,000. Their interest rates start at 9%.

Sharpshooter-Funding-Promo-Banner-Comparewise

OnDeck

Businesses that have been open for at least 6 months can receive secured term, line of credit or merchant cash advance loans from OnDeck. You’ll need a monthly revenue of $10,000/month to qualify, and you can get between $5,000-$300,00. Their interest rates vary between 8-29%.

Loans Canada

Businesses that have been in business for at least 100 days can qualify for an unsecured term loan from Loans Canada. Unlike the other lenders on our list, you only need to make $4,166/month in revenue to qualify for a loan from Loans Canada. They’ll give you between $2,000-$350,00 with an interest rate of 9%.

Clearco Review Conclusion

Clearco is a great choice for companies in the e-Commerce or SaaS industries that have been in business for over 6 months and consistently have $10,000 in monthly revenue. They provide loans of between $10,000- $10,000,000, which is more than many other lending companies of their type provide. Although there are a few drawbacks to their services, they’re still a good choice for some online startup companies who are looking for financing. Thanks for checking out our Clearco review.

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FAQ's about Clearco

What is Clearco?

Clearco is a revolutionary lending platform that functions entirely online, and services online companies. They provide online companies with an easy way to gain the financing needed to grow their businesses.

Who is Clearco for?

Clearco is for business owners looking for funding. Businesses in the following industries that can get the most benefit from Clearco’s services:

  • SaaS (Software As A Service)
  • Subscriptions companies
  • eCommerce
  • Online retailers
  • Marketplace (beta right now)
  • Mobile apps with in-app purchases

Does Clearco fund businesses with bad credit?

Clearco doesn’t screen companies based on their credit scores, but on the amount of revenue they pull in per month. (You have to bring in $10,000 monthly revenue.) They don’t have a minimum credit score requirement, and they don’t even run a credit check during the application process.

What is the minimum borrowing amount for Clearco?

Clearco’s minimum borrowing amount is $10,000. We also feel the need to point out in our Clearco review that Clearco doesn’t report repayment to credit bureaus, which means that your credit score won’t improve from making payments- even if you make your payments on time.

Does Clearco require collateral?

The good news is that Clearco doesn’t require you to offer up any collateral. So if you happen to default on your loan, they won’t be able to take your personal assets. However, we don’t advise defaulting on these loans if you can avoid it because doing so will put you further into debt and of course it will also negatively impact your credit score, which will make it difficult to receive loans in the future.

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Clearco Review 2022

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March 2, 2022
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