PROS / You could receive a rebate if you pay your loan back early.
CONS / The lender charges several fees in addition to the factor rate.
VERDICT / Fora Financial is one of the few lenders that only requires that you be in business for three months to qualify for a cash advance, making this a good choice if you're not well-established, but you may end up paying more in fees.
Fora Financial offers working capital loans for small businesses. Loans can range from $5,000 up to $500,000. This merchant cash advance company extends its offers to small businesses that have only been in business for three months. Because new businesses are a higher risk for merchant loans, the range of repayment costs 15 to 33 percent, which is slightly above average. Also, you could end up paying more for this business cash advance service in additional fees. Fora Financial charges a 4 percent origination fee and an application fee. However, if you repay the financing early, you can receive a prepayment discount. If it takes longer than you anticipate to repay the advance, you won't be required to make repayment minimums to be considered current on your financing, and you won't be penalized for exceeding the estimated repayment term.
Fora Financial provides a quote over the phone that includes estimates for the loan amount, the repayment costs and the range of hold-back percentages that you can expect. You can find the lender's eligibility requirements on its website. You must process a minimum of $5,000 per month, which is an average requirement, and you need to have been in business for at least three months. Along with your application, you're required to submit the last four months – if you've been in business that long – of your processing statements and business bank account statements.
You can repay your financing as a percentage of your credit card sales, with hold-back rates ranging from 15 to 25 percent, which is an average range. If the lender doesn't work with your existing credit card processing company and you don't want to switch providers, you can opt for the business cash advance repayment, which means the lender withdraws a fixed amount from your business bank account each business day. If you go with the business cash advance option, you can choose a repayment term of up to 18 months.
Fora Financial offers alternative business funding that can work well for startups because its qualifications are more forgiving than its competitors'. You only need to be in business for three months. However, the lender charges additional fees up to 25 percent repayment costs. On the plus side, if you're able to pay off your financing early, you could be eligible for a prepayment discount.