5 Things to Check in a Bluevine Agreement Before You Sign

Owners who sign a Bluevine line of credit agreement look first at the rate, then sign. That is a mistake. Check five things first. Who is the lender really, and what collateral do you pledge? What is the real cost of money here? What happens if you miss a payment or default? Are you stuck with automatic debits that you cannot revoke? Is arbitration the only way to fight back, and do you have a 30-day opt-out to avoid arbitration?

1. Who the lender is

This isn’t a Bluevine loan, but a Celtic Bank line of credit serviced by Bluevine. In a 2022 SEC-filed version, the line of credit required that you sign over a first-priority lien in virtually every business asset. That means the bank might take those assets if you do not repay.

That blanket lien freezes your ability to raise other money using those assets. You cannot sell or pledge that collateral without consent. This means that if you want to get equipment financing with another vendor, your Bluevine blanket lien stands in the way. It lasts for as long as the line is open, and a later lender generally stands behind Celtic.

Say your key machine breaks and you need a loan to buy a new one. You go to a new equipment lender, who offers a deal where the machine itself serves as collateral for the loan. But since the line of credit has a lien on the business’s assets, they will not do the deal unless the Celtic lien is carved out, or its holder agrees to let the equipment lender’s claim be first. Celtic might delay your closing, and if it says no, that blocks your ability to finance.

The UCC allows an equipment lender to have priority (their lien goes ahead of an existing one) if they are financing purchase of the equipment and file a financing statement within 20 days of delivery. However, loan agreements typically bar any new debt or lien without lender consent. Taking a new loan anyway puts you in default.

For this agreement, Celtic’s lien could show up on the public UCC record as “all assets,” instead of as any one specific thing. It means nearly everything is pledged, even things you bought years ago for cash. The lien even ties up assets you might buy later. If you want to get rid of a truck and buy a new one, that requires Celtic’s OK. It may say no.

Once no money is owed and no commitment to lend remains, you can request in writing that Celtic Bank terminate the blanket lien. Celtic must do so within 20 days of your demand.

2. What it really costs

Bluevine touts interest rates as low as 7.8%. But those are reserved for its top qualifying customers. NerdWallet reports that the APR can run as high as 95%. To learn what you pay, sign in to the Bluevine dashboard, go to Account Details, and click on “Pricing and Terms” to see for yourself. But read the fine print because each withdrawal you make charges a fee. Your actual terms will be given in advance of a draw, before you confirm it.

The 12-week weekly plan has fixed fees, so the amount is known up front. Early repayment will not alter that total. The 12-month monthly plan allows repayments over 12 months, but only with a 700-plus credit score.

3. What happens when you miss a payment

Miss one and your line goes on hold, either immediately on the weekly plan, or only after a retry next week fails on the 12-month monthly plan. To lift it requires that you catch up on both missed payment and a late fee equal to the greater of 5% of the missed payment, or $35.

Missing a payment is not the only reason for default. The SEC-filed agreement says that the lender can call a default if it decides in good faith that it is “insecure.” If you default on other debts to other lenders, the entire amount you owe can be demanded at once. The lender also may make negative business and personal credit reports about you, the guarantor.

4. The automatic debit

When you sign up for Bluevine, you agree to automatic weekly or monthly ACH debit draws from your bank account. This continues until your balance is zero, and you cannot revoke this until you have repaid in full. Trying to revoke this is an “event of default” under the 2022 terms, and so can lead to demand for full repayment at once.

5. The arbitration clause

The 2022 fine print of the Bluevine line of credit terms excludes class-action lawsuits and requires individual binding arbitration under Utah law. You can opt out within 30 calendar days of signing, but only if you notify the lender in writing of your decision to do so. Failure to notify is acceptance. Check when you sign.

Before closing, go back to the lien: your ability to finance in the future rests on the scope of the security agreement that the lender wants, so look it over before the rate. Some lenders will agree to narrow the collateral before signing, but rarely after. If you already have the lien, ask for a written release before ordering new equipment. You also can search the Secretary of State’s office UCC online files to see if a lien is on file.

A free contract review costs nothing and takes a day or two. Call (888) 837-7053, or send the agreements to Delancey Street for a straight read on your options.