Rapid Finance is our 2020 pick as the best alternative lender for merchant cash advances. The company offers cash advances ranging from $5,000 to $500,000 as well as term loans, lines of credit, bridge loans, SBA loans, invoice factoring, asset-based loans, commercial real estate loans and healthcare cash advances.
To understand how we selected our best picks and to see a comprehensive list of alternative lenders, visit our best picks page.
Pricing: Rates and Terms
Merchant cash advances are different from traditional small business loans. With traditional small business loans, you make monthly loan payments, but cash advances are paid back via credit card sales. You repay the loan by giving Rapid Finance a fixed percentage of your future Visa, MasterCard, American Express and Discover card sales until you've repaid the predetermined payback amount.
One way Rapid Finance determines the percentage it will charge your company is by comparing your total monthly sales to your monthly credit card sales. Businesses with high credit card sales typically have a lower fixed percentage fee, while those with lower credit card sales have a higher percentage.
What makes cash advances so attractive is that payments are linked to your business's daily credit card sales; when sales are slow, your payments are smaller. We like that there are no monthly minimums with Rapid Finance. Other lenders we considered require you to pay a minimum amount each month, regardless of your credit card revenue. Rapid Finance's model means you pay off more of your loan when your business is doing well.
Rapid Finance doesn't make you change credit card processors to get a cash advance. Other lenders we looked at have specific processors you need to use, or they require you to switch to their preferred processor to be eligible for a loan.
If Rapid Finance doesn't have an existing relationship with your credit card processor, it sets up a pass-through account. If it does work with your credit card processor, the processor will withhold Rapid Finance's percentage from your credit card sales and transfer that money directly to Rapid Finance on a daily basis.
Once you have the loan, there are no restrictions on its uses. Other lenders we evaluated place limits on how you can spend the money.
Rapid Finance Features
Application and Approval Process
Rapid Finance has a simple, short application and approval process. Before you even contact the company, you can fill out an instant quote questionnaire on its website. If you decide to continue and apply for a merchant cash advance, the next step is to either fill out an online application or call the company, where you can provide your information directly to an account executive over the phone.
You'll answer some basic questions – where your business is located, how long you've been open and your total monthly sales – to get an estimate of how much of an advance you might be eligible for.
Once you've qualified, the company provides a preliminary funding amount. This isn't the amount you may ultimately be approved for, but it gives you an idea of how much of an advance you might receive so you can make an informed decision on whether to proceed with the application process.
We like that Rapid Finance gives you this early estimate. It's an ideal way to get an understanding of what you qualify for and whether Rapid Finance is the right company for your financial needs. Most of the other lenders we examined don't provide an estimate until the entire application is complete.
After submitting your application, you get to see a more accurate loan amount. You then need to confirm your total monthly revenue and credit card sales by providing bank and credit card statements. You must provide a government-issued photo ID, a voided check from your company's checking account, three bank statements from your business account, and your last three credit card processing statements.
An underwriter then reviews all the information and runs a credit check before determining if you're approved for a cash advance and, if so, the amount and terms of the loan.
Time Until Deposit
Rapid Finance's approval process can be completed within a couple of hours, with funds available in as little as one day. This makes Rapid Finance an ideal quick-funding option.
Several variables determine whether your business qualifies for a cash advance. Your business's total monthly revenue and credit card sales, as well as your credit score, determine your eligibility.
Overall, Rapid Finance has pretty relaxed qualifications. The company focuses mainly on revenue rather than credit score when reviewing loan applicants.
Rapid Finance's requirements for the minimum time a business needs to be in operation and its credit card revenue are more allowing, too, compared to what most lenders require. Many lenders require businesses to be established for at least. Rapid Finance provides various funding levels, which are based on how well your business meets certain qualifications, with more established businesses able to qualify for more funding.
The lack of restrictions and collateral requirement makes Rapid Finance's loans flexible for small business owners looking for quick funding.
Rapid Finance Pros
Rapid Finance has an easy application process, quick funding and excellent customer service. Business owners can get financing from $5,000 to $500,000, which is one of the highest advances of any company we reviewed.
Rapid Finance helps small businesses that need fast cash and have a high volume of credit card sales. Rapid Finance offers two merchant cash advance plans: the starter merchant cash advance, which has relaxed requirements; and the premium merchant cash advance, which provides advanced funding options for more established businesses.
Rapid Finance Cons
Rapid Finance business term loans are not available to borrowers in New Jersey, Montana, Nevada and Rhode Island. It also does not provide funding for nonprofits, kiosks, law firms, marijuana dispensaries, travel agencies or car services.
Customer Service and Reputation
We were very impressed with the customer service we received from Rapid Finance. To test the type of support you can expect, we called the lender multiple times, posing as a business owner interested in a cash advance.
Each time we called, a representative answered quickly. These reps skipped the hard sell and instead spent time answering our questions. Other lenders we spoke to were more interested in determining our loan eligibility before they answered any of our questions.
Throughout our calls, all of our questions were answered thoroughly, leaving us with a clear understanding of how Rapid Finance's merchant cash advances work. Some of the other lenders we spoke with either couldn't answer all of our questions or offered short answers that didn't give us the clarity we needed.
After our calls, the representatives followed up with an email encouraging us to contact them with any other concerns. We did send follow-up questions on several occasions to gauge the type of replies you can expect. Each time, we received a response – containing thorough answers – within minutes.
Rapid Finance is an accredited member of the Better Business Bureau with an A+ rating. As of May 2020, only four complaints had been filed against the lender. That is far fewer than some of the other lenders we considered. You can read more about the nature of the complaints on the BBB website. The company scored five 5 out of 5 stars. The number of positive reviews was significantly higher than the negative ones, cementing Rapid Finance as a company that provides a solid service.
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