Upstart is an online lender that offers consumer loans to qualified borrowers.
Founded in 2012, Upstart beganas a truly bonkers idea, in which students agreed to part with a certain percentage of their income for the next 10 years in exchange for capital and mentorship from investors. One fellow, for example, gave up 3.32% of his earnings for the next 10 years in exchange for a $25K loan. While I’m sure there’s some alternate universe where thismodel works perfectly, the (hilarious) fact that the co-founder had to assure people that the programwasnotindentured servitudemeant that something had to change.
In 2014, a change did happen: Upstart discontinued their income share agreements and began offering fixed-term P2P loans. The latter is by no means new territory —
Prosper and Lending Club, two of the biggest names in P2P lending, have been at it since the mid-2000s. The difference is, Upstart has preserved the same target audience — young adults.
As a result, while credit scores are a consideration, those with little or no credit history are still eligible to receive capital. The underwriting process takes characteristics into account such as your “education, credentials, work experience” and, of course, the aforementioned credit (if you have it).
It’s worth noting that, while it was required in the past, Upstart no longer requires applicants to have a college degree. In other words, they’ll work with what you’ve got. If you don’t have a credit score or a college education, it’s not the end of the line.
All this is not to say that Upstart will accept anybody. It just means that Upstart has different criteria about who they accept and what rates those customers get. Instead of largely judging a potential borrower by their trustworthiness, which is reflected by a credit score, Upstart takes all the information you give them and compares it to other historical borrowers with the same characteristics.
Technically, Upstart offers consumer loans. Their big thing is credit card refinancing. They’re also known for offering loans so that people can attend coding boot camps.
More tailored to the purposes of this website, these loans can also be used for business purposes. However, I see very little difference between a loan used for businesses as opposed to a loan used for anything else. But let’s cut to the chase!
You are likely here because you want to know if Upstart offers decent rates. The answer is: yes, but not uniquely so.The APRs, which currently max out at 35.99%, fall right in line with the typical rates offered by competitors.
Because these loans are tied to your personal ability to repay, and not your business’s, Upstart is a very startup-friendly company. So if you’re confident enough that your startup will be able to sustain repayments, go right ahead.
