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Lender
Rating by Finanso®
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The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

IOU Financial

Finanso.Multilogin™

About lender

IOU Financial is a Canadian lending company that provides small businesses with fast and flexible loans - up to $600.000 of working capital. Since 2009, it has been helping Canadian business people and entrepreneurs to achieve their goals as soon as possible. The company already has an impressive number of clients. Since 2009 they have provided more than CAD 1.2 billion, comprising more than eleven thousand loans to small businesses throughout the United States and Canada. The company has its headquarters in Montreal, Canada. Its North American operations center is in Atlanta, Georgia, US. IOU Financial pre-approves 85% of its applicants and funds them in as little as 24 to 48 hours, which differs from traditional financial institutions.

Features

IOU Financial is a company that provides its services to small businesses and entrepreneurs; namely, it offers loans that help them rapidly seize growth opportunities. The company has a pretty high pre-approval rate: 85%. Still, it is important to note that approval generally depends on the client’s company’s annual income and other characteristics. However, personal requirements are also essential.

The approval takes much less time than in banks. Thanks to the advanced, automated application and approval system that accurately assesses applicants’ financial realities emphasizing day-to-day cash flow, IOU Financial reduces the turnaround time for the approval process to 24 hours.

Also, IOU Financial allows its customers to choose the repayment frequency: daily, weekly and bi-weekly. However, the company has a complicated fee system. It charges several fees, such as the loan origination fee, a post servicing fee, and a loan guaranty fee, but still, there are no prepayment or upfront fees to apply or borrow. Even though they offer their customers to use a free online calculator that will indicate customers’ payments, it may not include their origination, guaranty, or service fees, so before applying, clients had better approach the company’s operators to find out all the necessary information.

Pros and cons

Pros

  • The company helps small businesses seize growth opportunities.

  • The company operates in Canada and the US.

  • The pre-approval rate is pretty high: 85%.

  • The company allows clients to adjust the repayment schedule.

  • IOU Financial does not charge any prepayment or upfront fees to apply or borrow.

  • The company can offer a second loan once the customer has paid 40% of their first loan’s principal.

  • The pre-approval doesn’t take more than 48 hours.

  • Most of their loan costs are specified on their website.

  • The application form is simple and 100% online.

Cons

  • They have a highly complex system of fees.

  • Start-ups and businesses with low income may not be approved.

  • The company doesn’t offer merchant cash advances (financing in exchange for a percent of customer’s sales).

  • The requirements are pretty strict.

As we can see, the company has several important advantages. They offer flexible repayment schedules and do not charge any prepayment or upfront fees to apply or borrow. Also, they allow customers to take a second loan once they have paid 40% of their first loan’s principal.

However, IOU Financial has some disadvantages. First, the company only deals with small businesses and entrepreneurs. Their fee system is complicated, so clients need to study it in the first place. Also, they can disapprove start-ups and companies that have a low income.

Loan conditions

If customers want to apply for a loan from IOU Financial, they must fill out the application form on the company’s website. Usually, it takes about 3 minutes. Also, they can approach the company by calling them, texting them, or by visiting one of their offices.

The company has some requirements that clients and their businesses must meet. For example, customers must be older than 18 years, be Canadian citizens, and more than 80% of the business must belong to them. In addition, the customer’s business must be at least one year in operation, show ten deposits per month of at least $10,000, incur no more than three negative days and/or five NSF in any given month, and show an average ledger balance of at least $3,000, have an annual revenue at least $100,000. Also, some documents must be provided: three months of bank statements, driver’s license, other ID, and a void cheque.

The company offers loans varying between $10,000 and $600,000. The terms are 6, 9, 12, 15, 18, and 24 months. The repayment schedule is adjustable. Clients can repay their loans daily, weekly, or bi-weekly. The interest rate starts from 15%.

Methods of loan funding

When a customer completes the application form and gets approved, the borrowed amount will be transferred by direct deposit in 24 hours.

FAQ

What is IOU Financial?

IOU Financial is a company that operates in Canada and the US. It offers loans for small businesses helping them with healthy cash flow. Business people and entrepreneurs can be provided loans from $10,000 up to $600,000 for 6 to 24 months.   

Who owns IOU Financial?

IOU Financial is a privately held company. Robert Gloer and Phil Marleau are its directors and co-founders.

How do you qualify for IOU Financial?

To be qualified for a loan from IOU Financial, customers must be older than 18 years, be Canadian citizens, and more than 80% of the business must belong to them. In addition, the customer’s business must be at least one year old, show ten deposits per month of at least $10,000, incur no more than three negative days and/or five NSF in any given month, and show an average ledger balance of at least $3000, have an annual revenue at least $100000.

How much can you borrow from IOU Financial?

The borrowable amounts start from $10,000 up to $600,000.

Is it a legitimate company?

This is a legitimate company. It has an A+ accreditation from BBB. In addition, IOU Financial states on its website that its financial activities are subject to federal, state, and local regulations and that the business is licensed and/or registered with all states where it conducts business. Quebec Business Number: 1171437552.

Company documents

Terms of Use
Privacy Policy

IOU Financial provides successful small businesses access to the capital they need to seize growth opportunities quickly. 

© IOU Financial

Calculate loan payments at IOU Financial

With IOU Financial calculator you can calculate an approximate payment schedule for the loan

IOU Financial calculator
Interest rates are given in accordance with the rates of the bank in Ottawa as of 03.10.2022
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What to pay attention to when applying for a loan from IOU Financial

  1. The company must have a license if it runs business in Alberta, British Columbia, Manitoba, Ontario and Quebec.
  2. You can check the availability of the relevant license (copy) at the branch of the lending company.
  3. Membership in a self-regulatory organization (SRO) is an additional guarantee of the reliability of the lending company. This information can also be checked at the company's branch or on its official website.
  4. Availability of lending policies.
  5. The procedure for applying for a loan.
  6. The procedure for concluding the loan agreement and receiving the payment schedule.
  7. Other conditions for granting loans.

We recommend

  1. To check out the interest rates and frequency. 
  2. Check the availability of individual terms in the loan agreement (principal amount, term, date of advance, etc.).
  3. Check whether the loan agreement contains information about the total cost of borrowing.
  4. Take time to think – you can change your mind before agreeing or signing a loan agreement.
  5. Speed of loan processing.
  6. Accessibility – alternative lenders often operate where there are no bank branches.
  7. For the borrower - high interest on the loan.
  8. For an investor, the safety of funds is not guaranteed by the state.

What distinguishes IOU Financial from banks:

  1. Simplicity - loan processing is less formalized than in a bank.
  2. Fast loan processing.
  3. Accessibility.
  4. For the borrower - high interest on the loan.
  5. For an investor, the safety of funds is not guaranteed by the state.
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