Journey Capital Review: A Bouy For Your Small Business?

You are the backbone of the economy, but get no love from big banks. Canadian small businesses are notoriously underserved and struggle to get the financing they need to stay afloat – let alone thrive! Journey Capital (formerly OnDeck Canada) is an online lender filling the gap with fast, flexible, and easy-to-access financing solutions. So if you’re sick and tired of the Big Six nonsense, it might be time to borrow outside the branch.

Journey Capital shifts the paradigm with a holistic approach to assessing creditworthiness – because you and your business are more than just a 3-digit number. Their smart technology can get you approved and funded in as little as 24 hours. Before you risk another business loan rejection, here’s what to know about Journey Capital.   

Why do big banks snub small businesses?

In short, the profit motive and failure to evolve in a digital world. According to a CBC article, most big banks won’t finance loans under $250,000 because the return is not worth their time and effort. The main culprit? The expensive overhead costs that come with a physical branch network make smaller loans virtually unprofitable, and therefore, undesirable. 

Couple that with antiquated eligibility metrics, and you have a recipe for rejection. Big banks disproportionately focus on credit scores over other intuitive data points that provide a more accurate picture of your creditworthiness. Non-bank competitors like Journey Capital leverage digital innovation to access that data and provide better service while traditional banks rest on their laurels. 

Does that make you mad? Because it should. 

What is Journey Capital ?

Founded in the US in 2007, Journey Capital is a digital-only lender exclusively serving the needs of small businesses. The company expanded into Canada in 2015 to offer quick access to capital for small businesses above the 49th parallel. With their easy online application and rapid approval process, Journey Capital can help you get the funds you need without the stress of dealing with the big guys.

How does Journey Capital Canada work?

Because Journey Capital Canada is an online-only lender, they’ve eliminated the operating expenses that make small business loans unattractive to the big banks. That’s one less roadblock standing between you and the capital you need. 

Next, Journey Capital uses smart technology to streamline the lending process to provide quick and flexible financing solutions tailored to your small business needs. By considering a broader range of factors, like cash flow and how long you’ve been in business, they’re able to assess your financial fitness more accurately. 

The application process takes just 10 minutes or less and can be done entirely online so you can get back to business. But don’t worry, you still get that personal touch. A dedicated lending specialist will contact you, ensuring you get expert advice from a real human. If approved, you can receive your funds in as little as 24 hours!

Types of financing offered

Your business is as unique as you are, and so are your financing needs. Journey Capital understands there’s no one-size-fits-all solution. They currently offer 3 different types of small business financing solutions and CEBA repayment support:

Fixed Term Loans: $5,000 – $300,000

Journey Capital offers short-term installment loans with flexible terms and repayment options. Your dedicated lending specialist will go over your options so you can choose the loan amount, length of term, and a daily or weekly repayment schedule to best suits your needs. There are no penalties to pay off your loan early. 

Line of Credit: up to $300,000

You can open a line of credit up to $300,000 to manage cash flow and bolster your business. If approved, you can access the funds in as little as one day. Choose between a daily or weekly repayment schedule, and opt for either a fixed or variable repayment plan.

A Fixed Repayment plan is ideal if you want the peace of mind that comes with a fixed payment amount. Regardless of how often you draw funds or make extra payments, your outstanding balance will be restructured into a new, equal fixed amount.

A Variable Repayment plan is your go-to option if you want to pay off your principal as fast as possible and save on interest charges. Your payments consist of a portion of your principal plus weekly interest, gradually reducing over time.

Flex Funds: $5,000 – $300,000

Journey Capital offers a merchant cash advance solution called Flex Funds that gives you quick access to money in exchange for a percentage of your future card sales. It’s not a loan, so you don’t have to worry about taking on debt and accruing interest. Plus, there are no maintenance fees or collateral requirements.   

Instead of making fixed monthly payments as you do with a loan, you repay the advance by giving Journey Capital a fixed percentage of your daily debit and credit card sales. The amount you pay varies based on your sales volume, so when business is good, you pay back more, and when it’s slow, you pay back less.

Just keep in mind that while you aren’t paying an interest rate, the percentage of sales you need to pay back to Journey Capital makes this type of financing more expensive than other types of financing.   

CEBA Repayment Program

If the Canadian Emergency Business Account helped your small business weather the Covid19 storm, it’s almost time to pay it back. But Journey Capital financing can help you save up to $20,000.

First, you need to make sure you’re eligible for CEBA loan forgiveness and how much. If eligible, you need to pay back the principle amount in full by December 31, 2023.

If you don’t have that much money on hand, that’s where Journey Capital comes in. Just apply for financing, then choose the term and repayment options that are most comfortable for you. Then use those funds to pay back your CEBA loan so you can benefit from loan forgiveness.

Am I eligible for Journey Capital Canada financing?

Journey Capital has more relaxed requirements compared to traditional banks, making it easier to qualify for financing when you need it. The basic eligibility criteria are as follows:

• Business must be registered in Canada
• Must be in business for at least 6 months
• Make at least $100,000 annual revenue
• Have a minimum 600 business credit score
• Have a business bank account at a Canadian financial institution

However, meeting the minimum eligibility requirements does not guarantee approval. Journey Capital will also assess the overall financial health of your business before making a lending decision.  

How much does Journey Capital Canada financing cost? 

Journey Capital’s pricing model isn’t exactly transparent, which is frustrating if you’re trying to assess the cost of credit and compare business loan lenders. But generally speaking, these are the rates and terms you can expect:

Financing Amount: $5,000 – $300,000

Repayment Terms: 6 – 18 months

Repayment Plan: Daily or Weekly & auto-debited from your business account

Interest Rates: 8% – 29%

The Journey Capital website discloses that interest rates on fixed-term loans range from 8%-29%, but not a word about rates on lines of credit. Where most traditional lenders will post a rate of “X% + Prime”, I could find no such disclosure by Journey Capital. 

Flex Funds require a percentage of future debit and credit card sales as repayment. And while Journey Capital claims their rates are competitive, I could not find any rate disclosures on this financing option either. 

Why are the interest rates higher than big banks? 

Time for some real talk. Even though Journey Capital is on a mission to empower small businesses, they’re essentially a sub-prime lender. Sure, they’re better positioned to profit on smaller loan amounts thanks to their digital-only business model. But it’s actually more expensive for them to access the capital they need in order to lend it to you.

That’s because they don’t have depositor accounts to lend from like the big banks do. So even though traditional banks offer lower rates, they’re still risk averse and unwilling to finance small loan amounts. That leaves too many creditworthy businesses in a lurch. 

Journey Capital drops the rope to make business financing way more accessible. But that accessibility comes at a cost. On the flip side, there is the opportunity cost and its impact on your business to consider if you can’t get the financing you need from traditional lenders. 

How does Journey Capital determine my financing terms? 

Journey Capital’s rates vary widely from 8% to 29% and repayment terms range from 6 – 18 months. That’s quite a swing, so how do they determine the rate and terms you will get? Luckily, Journey Capital takes a holistic approach by evaluating both your personal and business financial situation. Here’s a closer look at how they determine your loan terms:

Personal Financial Assessment: Journey Capital considers your personal credit score, which gives them insight into your borrowing and repayment history. They also take into account your current debt load to assess your ability to manage and repay new debt. Finally, they consider your ownership percentage in the business because it indicates your level of investment and commitment – your “skin in the game” so to speak.

Business Financial Assessment: Journey Capital also reviews the business credit score to get a snapshot of your company’s creditworthiness and financial behaviour. They look at your annual revenue to determine the size of your business and evaluate its financial stability. Journey Capital also examines public records for any outstanding liens, judgments, or other legal matters that could affect your ability to repay a loan. 

Cash flow, which represents the money coming in and out of your business, gives Journey Capital a sense of your company’s liquidity and ability to cover loan payments. Last but not least, the number of years your business has been in operation reflects your experience and the potential longevity of your company.

This comprehensive assessment ensures that the interest rate and loan terms offered to you are suitable for your business’s current circumstances and personal financial position while also mitigating their risk exposure based on your profile.

Pro Tip! While the rates range from 8% to a whopping 29%, Journey Capital does offer special lower rates to businesses that are especially financially fit and have a very strong credit history. 

Do I need to provide any collateral to get financing from Journey Capital Canada? 

Unlike many traditional lenders, Journey Capital does not require you to pledge personal or business collateral upfront. This means you can access the funds you need without having to put your assets on the line. It’s a hassle-free approach that allows you to focus on what matters most – growing your business.

How to apply for Journey Capital financing

Ready to hit the Deck? We’ve got your back every step of the way, so you can focus on what you do best – running your business like a boss. Here’s how to apply: 

Fill Out an Application

Apply online in under 10 minutes, or apply over the phone by calling (855) 704-7458. Be sure to have your basic business information on hand such as: 

• License number, address, contact information, etc. 
• The last 3 months of business bank statements
• Annual revenue
• Business credit report and credit score
• Business asset and liability statement(s)

Explore Your Options

Keep an ear out for a call from your very own lending expert within just one business day. They’ll walk you through the offers you’re eligible for, and if approved, you’ll get to choose the term, amount, and repayment schedule that suits you best. With a quick and easy online checkout, you’ll be all set!

Get Your Money

With Journey Capital, you could be eligible to receive your funds on the very same day you apply. Talk about fast financing!

Pros & cons of Journey Capital financing

When considering Journey Capital for your small business financing needs, it’s essential to weigh the pros and cons to determine if it’s the right fit for your situation. Here are some key points to consider:

Pros:

Quick & Easy Application Process: Journey Capital’s online application is simple and can be completed in just a few minutes. You only need basic business information and three months of business bank statements to apply.

Fast Funding: Once approved, you could receive your funds on the same day. This speed is especially beneficial for businesses that need quick access to capital to cover unexpected expenses or take advantage of timely opportunities.

Flexible Repayment Options: For the line of credit, Journey Capital offers both fixed and variable repayment plans, allowing you to choose the option that best aligns with your business’s cash flow. You can also choose between daily or weekly repayments.

No Collateral Required: Journey Capital does not require upfront personal or business collateral to secure a term loan or line of credit, making it easier for businesses to access financing without putting their assets at risk.

Tailored Financing Solutions: Journey Capital considers both your personal and business financial information to offer customized loan terms and interest rates that align with your unique needs and financial situation.

Cons:

Higher Cost: Journey Capital’s financing options are generally more expensive than traditional bank loans. The convenience and flexibility come at a higher cost, so it’s important to carefully consider whether the benefits outweigh the costs.

Shorter Loan Terms: Journey Capital’s loan terms are shorter than those offered by traditional banks, which might not be ideal for businesses looking for long-term financing.

Automatic Repayments: Journey Capital’s repayment structure involves automatic deductions from your business bank account, which may be inconvenient for some business owners.

Eligibility Requirements: While Journey Capital has more relaxed eligibility requirements than big banks, businesses with poor credit or low annual revenue might still struggle to qualify for financing.

Impact on Cash Flow: Frequent repayments (daily or weekly) might strain your cash flow, especially if your business experiences revenue fluctuations.

Who is Journey Capital best suited for?

Journey Capital is a strong financing contender for small business owners who need quick access to capital, whether it’s for managing unexpected expenses, taking advantage of growth opportunities, or simply navigating cash flow volatility. 

This makes it particularly suitable for businesses with strong sales but variable cash flow like restaurants, retailers, and seasonal businesses. Journey Capital’s tailored financing solutions and flexible repayment options can benefit businesses with unique needs and financial situations. 

However, given the higher cost of credit associated with Journey Capital, it’s essential that you carefully consider your ability to manage the repayments and whether the benefits of quick and flexible financing outweigh the costs. But all in all, Journey Capital can be a great fit for your small business when you need fast, customized financing solutions, especially when traditional bank loans are a nonstarter.

FAQs about Journey Capital