PROS / You can get a quote over the phone with estimates for how much financing you could receive, the repayment cost and interest rate.
CONS / Repayment costs are higher than average.
VERDICT / Capital for Merchants can be a good choice for small and new businesses that don't make a lot of revenue each month because the lender only requires you post $2,000 per month in credit and debit sales, and the repayment terms are flexible.
Capital for Merchants offers two different types of merchant loans: merchant cash advances and business cash advances. The maximum financing available from this lender is up to $1 million per location, and the lowest amount you can borrow is $2,000 to $5,000. You could pay as much as 25 to 38 percent in repayment costs on the financing you receive, which is among the highest in our review. You also pay a fee to apply, which is deducted from the amount that you borrow.
Capital for Merchants is one of the few alternative business funding companies that offer a quote over the phone. The representative we spoke with was very forthcoming with information when we called, you can get estimates for the amount of the advance you are eligible for, the repayment cost, and daily repayment percentages and amounts. However, you won't find eligibility requirements posted online.
This lending company could be a good choice for a new business that has been in operation for at least six months and makes less monthly revenue than more established businesses. Capital for Merchants requires that you process a minimum of $2,000 each month in credit and debit card sales, which is one of the lowest processing requirements in our review. Along with your application, you're required to submit three months of processing statements and business bank account statements.
When you make payments as a percentage of your daily credit card sales, the hold-back rate ranges from 3 to 25 percent. Your credit card processor may not be compatible with Capital for Merchants, but the lender guarantees to give you a lower rate if you have to switch processor companies. If you're locked into a contract with your current processor, you can choose to repay your loan in daily set amounts that the lender withdraws from your business bank account. If you prefer to know exactly what your daily payments are, or if the majority of your receivables come from invoices or cash instead of credit card payments, this could be a better option for you. The lender's term lengths for working capital loans for small businesses are flexible, and there is no penalty should it take longer than anticipated to repay your advance.
Capital for Merchants is more accepting of new businesses that don't earn as much revenue as more established businesses. The company is forthcoming with information about its financing programs and offers flexible repayment terms. However, the repayment costs are higher than many of its competitors, and you have to pay an application fee.