Secfi Review

About Secfi

Secfi, based in San Francisco and operating in the heart of Silicon Valley, specializes in providing non-recourse financing solutions with a unique focus on equity planning for startup employees. At Secfi, the team genuinely cares about empowering startup employees by offering innovative financial products and equity planning tools.

Key features

• Loan Amounts. Access loans of up to $10 million, providing substantial financial support to navigate various equity-related scenarios.

• Fixed Payments. Enjoy the predictability and stability of fixed payments, allowing for better financial planning and management.

• No Prepayment Penalties. Secfi stands out by offering flexibility; there are no prepayment penalties, empowering individuals to settle their loans without incurring additional costs.

• Credit Checks. The process includes credit checks, ensuring a transparent and fair evaluation while maintaining the confidentiality of your financial information.

Pros and cons

Pros

Cons

Reliability

Secfi is considered reliable, and it adds an extra layer of credibility by being associated with Secfi Securities, LLC. This entity is an SEC-registered broker-dealer and a member of FINRA (Financial Industry Regulatory Authority) and SIPC (Securities Investor Protection Corporation). These affiliations signify that Secfi operates within the regulatory framework established to protect investors and maintain the integrity of the securities industry.

The fact that Secfi Securities, LLC is registered with the SEC and is a member of FINRA and SIPC provides users with assurance that the company adheres to industry standards and is subject to regulatory oversight. This contributes to the overall reliability and trustworthiness of Secfi as a platform for equity planning and financing for startup employees.

How to apply for a Secfi loan?

1. Go to the Website. Start by visiting the Secfi website. You can do this by entering the URL in your web browser.

2. Choose Secfi Loans Section. Navigate to the Secfi Loans section on the website. Look for this specific section to access information and services related to loans.

3. Click "Get Started". Once you are in the Secfi Loans section, locate the "Get Started" button and click on it. This will initiate the loan application process.

4. Sign Up to Add Your Equity Details. You will be prompted to sign up or log in to your account. If you are a new user, you'll need to create a free account. Provide the necessary information, including your equity details.

5. Request Financing. After adding your equity details, you will likely find an option to request financing. Click on this option to proceed with your loan application.

6. Review Your Situation and Proposal with an Equity Strategist. Once you've submitted your financing request, a Secfi Equity Strategist will review your situation and proposal. This step is crucial for customizing the financing solution to your specific needs.

7. Secure Loan. After the review process, and if your proposal is approved, you can proceed to secure the loan. Follow the instructions provided by Secfi to complete the necessary steps for securing your financing.

Сonditions and requirements

Conditions

• No Prepayment Penalties. Borrowers benefit from the absence of prepayment penalties, providing the flexibility to settle the loan early without incurring additional costs.

• Payment Options. Choose from two fixed payment options: monthly interest-only payments with a lump sum payment at the end of the term or monthly payments of principal and interest, offering flexibility in managing repayments.

• Loan Amounts up to $10 Million. Secfi provides access to substantial loan amounts, empowering individuals to navigate various equity-related scenarios with financial support.

• Credit Checks. As part of the application process, both a soft credit check and a hard credit pull will be performed. The soft credit check ensures a preliminary assessment, while the hard credit pull is conducted for a more comprehensive evaluation.

Requirements

1. Overall Financial Situation. Secfi evaluates the borrower's comprehensive financial situation, considering aspects such as personal finances, credit history, liquid assets, and the private equity value of every loan applicant.

2. Credit History. A positive credit history is often a crucial factor in the loan approval process. Secfi may assess your creditworthiness to gauge your ability to manage and repay the loan.

3. Liquid Assets. The availability of liquid assets may be considered as an indicator of your financial stability. This can include cash or other assets that can be quickly converted into cash.

4. Private Equity Value. The private equity value of every loan applicant is taken into account. This may involve an evaluation of the equity you hold in private companies, especially if you are applying for stock option financing.

Ways to receive the money

As for general funding options used by such companies, these can include:

• ACH (Automated Clearing House) Transfers. A secure and efficient method for transferring funds electronically between bank accounts.

• Wire Transfers. A faster option for transferring funds, especially for larger amounts, involving the electronic movement of money from one bank to another.

• Check Issuance. In some cases, companies may offer the option of receiving funds via a physical check.

Products

1. Exercise Financing. Secfi provides financing options to assist individuals in exercising their stock options, unlocking the potential value of their equity.

2. Liquidity Financing. This product enables individuals to access liquidity by leveraging their private company shares, providing financial flexibility.

3. Secondary Sale. Secfi facilitates secondary markets sales, allowing individuals to sell a portion of their private company shares, providing an avenue for liquidity.

4. Wealth Management. Secfi offers wealth management services, helping individuals strategically manage their financial assets, including stock options and equity.

5. Stock Options & Equity Advice. Secfi provides expert advice on stock options and equity, assisting individuals in making informed decisions regarding their equity compensation.

6. Investment Management. This product involves professional management of investments, aligning with the financial goals and preferences of the clients.

7. Secfi for Startups. Tailored solutions designed to meet the unique financial needs of startups and their employees, including equity planning tools and financing options.

8. Secfi Capital. A comprehensive suite of financial products and services, including financing solutions and wealth management, underlining Secfi's commitment to supporting individuals throughout their financial journey.

9. Secfi Financing Explained for Executives. A specialized offering designed to cater to the financial needs and requirements of executives, providing clarity on financing options and wealth management strategies.

How to repay a Secfi loan?

• Follow the Agreed Schedule. Adhere to the agreed-upon payment schedule based on your chosen payment option. Whether it's monthly interest-only payments or monthly payments of principal and interest, consistency is key.

• Ensure Sufficient Funds. Ensure that your designated bank account has sufficient funds to cover the scheduled payments. This ensures smooth and timely transactions.

• Lump Sum Payment (if applicable). If you chose the monthly interest-only payments with a lump sum payment at the end of the term, be prepared for the final lump sum payment at the agreed-upon maturity date.

Other Loans

• Best Business Loans

Reasons for getting rejected for a Secfi loan

1. Company Viability. If your company is not deemed to have a strong growth trajectory or is facing financial instability, it may impact the approval of the loan.

2. Exit Probability. Secfi assesses the likelihood of your company's exit, and if it appears uncertain or unfavorable, it may influence the approval decision.

3. Personal Equity Situation. The evaluation of your personal equity situation is a crucial factor. If your equity situation is not aligned with the criteria set by Secfi or if there are concerns about the potential value of your equity, it could affect the approval.

4. Financial Stability. Your overall financial stability, including personal finances, credit history, and liquid assets, plays a role in the approval process. If there are red flags in these areas, it may impact the decision.

5. Mismatch of Exercise Costs and Financial Viability. Secfi evaluates whether financing exercise costs makes sense for you, your company, and Secfi. If there is a perceived mismatch or if it doesn't align with the financial interests of all parties involved, it could lead to rejection.

6. Incomplete or Inaccurate Information. Providing incomplete or inaccurate information during the application process may lead to rejection. It's essential to ensure that all required documentation and details are accurate and up-to-date.

7. Creditworthiness. A negative credit history or insufficient creditworthiness may impact the approval decision. Secfi may conduct credit checks as part of the evaluation process.

Alternatives

• Forge Global is known for its platform that connects investors and shareholders in the private market, offering liquidity solutions and services related to private securities.

• EquityBee focuses on helping startup employees exercise their stock options by connecting them with investors who provide financing. It's a platform that aims to bridge the gap between employees and investors.

• Upstock offers tools and services related to equity compensation, allowing users to better understand and manage their stock options. It provides insights and assistance to enable employees navigating the complexities of equity.

• EquityZen is a platform that facilitates secondary market transactions for pre-IPO shares. It allows investors and employees to buy and sell shares in private companies before they go public.

Loans like Secfi

OnDeck

OnDeck stands out as an excellent choice for short-term business loans, offering the flexibility of borrowing substantial amounts, even for businesses with a minimum credit score. What makes OnDeck particularly attractive is its ability to provide funds swiftly, with same-day approval and disbursement for qualifying applicants. Moreover, OnDeck emphasizes the opportunity to build and strengthen business credit by consistently making on-time payments. The loan terms range from 18 to 24 months, with loan amounts spanning from $5,000 to $250,000. While the starting interest rate is 35.40% for a portion of customers, the accessibility and speed of funding make OnDeck a notable player in the short-term business loan landscape.

Funding Circle

Funding Circle distinguishes itself in the realm of long-term business loans by offering competitive rates, extended repayment terms, and a lack of prepayment penalties. This lending option caters to businesses seeking larger loan amounts, ranging from $25,000 to $500,000, with a reasonable starting interest rate of 11.29%. Beyond financial support, Funding Circle prioritizes efficiency, enabling businesses to access funds in as little as two business days. Notably, Funding Circle also showcases its commitment to diversity by providing funding options specifically tailored for women-owned businesses and minority entrepreneurs. The loan terms extend from 6 to 84 months, making Funding Circle a favorable choice for businesses with a more extended financial horizon.

Credibly

Credibly positions itself as a reliable source for working capital loans, particularly for businesses requiring quick funding to address immediate operational needs like payroll or inventory expenses. Notably, Credibly's working capital loans boast a rapid approval process, often providing funds in less than 24 hours. The lender exhibits flexibility by considering applicants with a minimum credit score of 500 and a willingness to look beyond a less-than-perfect credit history, provided there is a healthy annual revenue. Beyond working capital loans, Credibly collaborates with a network of lenders to offer a diverse range of financing options, including merchant cash advances, business lines of credit, equipment financing, SBA loans, and invoice factoring.

Fundbox

For startups in need of swift financing, Fundbox presents an appealing option with its business line of credit, offering up to $150,000. What sets Fundbox apart is its relatively lenient eligibility criteria, allowing new companies to qualify after just six months of operation and a minimum annual revenue of $100,000. The business line of credit provides the flexibility to withdraw funds as needed, and businesses only pay interest on the amount utilized. Additionally, Fundbox offers perks such as up to 20% off fees through its Fundbox Plus upgrade. With competitive starting interest rates ranging from 4.66% for 3-month terms to 8.99% for 6-month terms, Fundbox addresses the financial needs of emerging businesses seeking quick and accessible startup loans.

Editorial Opinion

Important

How to Choose a Lender

1. Make sure to confirm whether the lender is licensed to operate in your state. You can verify this information with your state regulator or attorney general.

2. Check if the lender is a member of a reputable association, such as the Community Financial Services Association of America. Membership in such organizations may provide an extra level of reliability.

3. Carefully review all the terms and conditions of your payday loan contract.

4. Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.

5. Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.

6. Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.

Methodology

At Finanso, we've carried out a comprehensive analysis of over 50 business lenders, assessing them based on 35 different parameters across six key categories: accessibility of loans, customer relations, quality of service, interest rates, and transparency of conditions.

In each category, we carefully considered the most critical factors in selecting a lender. These factors include the interest rates, available loan amounts, minimum credit score, minimum income, application fees, and the speed at which funds are transferred.

At Finanso, we highly value our users, which is why we also focus on the quality of customer service, user reviews, and additional features that can aid our users in making a well-informed decision.

Our ultimate goal is to provide insightful recommendations and expert advice to assist you in selecting a lender that best caters to your specific needs.

Additional Resources

• GoKapital Account Review
• How to Apply for GoKapital Loan
• How to PayOff GoKapital Loan
• GoKapital Mobile Apps
• GoKapital Reviews

Sources

• Secfi
• SecFi's alternatives and competitors
• Secfi Reviews