Overview
The owner of every new small business should have great dreams and aspirations, but that doesn’t mean they have the means to fund their venture. What’s an entrepreneur to do? And what if he (or she) only has a mediocre credit score? Fresh Funding may be just the solution to this challenge. The company’s professional staff is trained to work with every business owner to find the right funding for their business.
If you have a need for funding and you need a decision quickly so that you can move forward with your plans, Fresh Funding is worthy of your consideration. Established in 2017 and headquartered in New York City, the philosophy of the Fresh Funding team, when it comes to financing a business, is that one size does not fit all.
Fresh Funding offers several funding options, including the following:
- Working Capital Loan, which gives you quick access to a short-term loan of up to $250,000, with no personal guarantee. Repayment is up to 18 months.
- Business Cash Advance, with this you can turn future sales into cash immediately. You can get up to $150,000 cash with no collateral and no personal guarantee.
- Business Line of Credit: A flexible working capital credit facility of up to $100,000 is available, with no collateral and no withdrawal fees.
Fresh Funding recognizes that each business will have specific needs and uses, as well as different abilities to repay and satisfy the debt. That is why they have a dedicated team of funding specialists ready to work with you to find a solution to your unique challenges. They have an easy pre-qualification process, and if you have a question or an issue that you would like addressed, their funding specialists are there to help.
Advantages and Disadvantages
Of course, like any lender, there are advantages to choosing Fresh Funding over others in the market, as well as disadvantages. This Fresh Funding review lays them out for you so you can make an informed decision.
- 24-hour approval
- Same-day funding in many instances
- Soft pull credit score at pre-qualification stage won’t affect your credit history
- Flexible repayment terms
- Funding of up to $250,000, depending on loan type
- One-on-one interaction with funding specialists
- Business must have been in operation for at least four months
- Lender may request information beyond the bank statements, i.e. tax returns and financial statements
- Personal guaranty required in some cases
- Collateral required in some cases
- Interest rates and fees are not disclosed on the website for every loan type
- Repayment terms in some cases may be on a daily or weekly basis which can put a burden on some businesses which have irregular cash flow
Services Offered & Types of Funding
Currently, Fresh Funding offers six different types of funding, some of which are common, and others that are a bit more specialized. The company offers a business lines of credit, business cash advance, working capital loans and short term business loans. Unlike many other alternative lenders, they also offer inventory loans and medical/dental loans for healthcare-related businesses.
The Fresh Funding website provides detailed information for only two of their funding options, namely, the business line of credit and the business cash advance. They encourage a potential borrower to reach out to them directly for more information on the other funding options.
Business Line of Credit
The premise behind any business line of credit is to have access to funds as and when you need it at some point in the future. Provided you have a positive cash flow and your business is growing, Fresh Funding is better positioned to assist you with a business line of credit. This is also where your long-term business plans and projections come into play.
A business line of credit is different from a standard term loan in that, once repaid, you will have access to the principal amount again. A line of credit is generally available to you for a pre-specified length of time; repayments may be on a staggered basis depending on how many times you’ve drawn against the line. A business line of credit can be secured or unsecured; understand that the interest rate charged will generally be more favorable for a secured facility.
Older, well established businesses are more likely to have the ability to secure a line of credit with collateral, so they may choose a traditional lender. Newer businesses or those who don’t have ready collateral or which can only offer a personal guaranty may find an alternative lender a better option. That’s where Fresh Funding meets the challenge, fortunately.
At a minimum, Fresh Funding will require the following from any potential borrower for a business line of credit:
- Bank account information (minimum three months)
- Personal credit score (not specifically rated but at least considered “good”)
- Personal tax returns (generally, three years)
- Business tax returns (dependent on age of business)
- Employer identification Number
Business Cash Advance
A business cash advance from Fresh Funding will give you immediate access to capital. The process is streamlined, beginning with an easy online application, an approval process that can be accomplished within hours, and funding to a verified business bank account automatically deposited after approval.
Per your contract, the repayment amount will be a percentage of future sales which accommodates periods of slower sales. It should be noted that a business cash advance is limited to select industries which are not specifically identified.
Fresh Funding has four tiers for cash advances; Starter, Standard, Premier and Premier Plus. Each tier has its own set of borrower requirements and applicable rate; which one will pertain to you will be the topic of discussion between you and a Fresh Funding specialist who will analyze your needs and review your documentation. Cash Advance Pricing or the Factor Rate is equivalent to the Payback Amount divided by the Amount Funded.
Briefly, the requirements are as follows:
| Starter Tier | Standard Tier | Premium Tier | Premium Plus Tier | |
|---|---|---|---|---|
| Factor Rate | 1.4 | 1.3 | 1.2 | 1.12 |
| Minimum length of time in business | 18 months | 12 months | 18 months | 24 months |
| Ownership status | At least 50% | At least 50% | At least 50% | At least 60% |
| FICO Score | Minimum 560 | Minimum 500 | Minimum 560 | Minimum 620 |
| Minimum monthly deposits | $30,000 | $15,000 | $30,000 | $50,000 |
| Average number of unique deposits | 8 | 5 | 8 | 10 (minimum) |
Before you Apply
Knowing that you need funding is only part of the issue. Obviously, the better “armed” you are with data, the greater the chance your loan will be approved. Even before you begin speaking to a funding specialist at Fresh Funding, let’s review some of the critical issues and documentation that might come up in the conversation.
- Amount and Use of Funds: It is important to know exactly how much capital you need and how it will help your business. It’s also important to be prepared for a future need. Fortunately, even if you are not too sure of your capital requirements, there’s no need to panic as the funding specialists are there to help you figure that out.
- Credit Score and History: Almost all lenders, whether in a traditional lending market or the alternative market, will use an individual’s credit scores to determine credit risk and accordingly, interest rates to be assessed. It is easy enough for you to check your own credit score so that you are not taken by surprise and so you are better able to defend it, if necessary. While your credit score is important, be aware that Fresh Funding does not rely solely on your credit score when making a decision; other factors are given similar weight.
- Security/Collateral and Personal Guaranty: Many lenders require you to use your assets to guarantee the loan. Similarly, some lenders will require a personal guarantee of the debt. Collateral can take the form of a home, car, inventory or other property that you own. Fresh Funding is fully aware of the difficulties a small business faces with regard to funding and its team is prepared to help. Depending on the type of loan you hope to secure from Fresh Funding, collateral will not be required, nor will a personal guarantee.
- Business Plan: Most lenders expect you to have a comprehensive business plan when you apply for funding. If you don’t have one, the Fresh Funding team will ask the right questions and, essentially, help you prepare one.
- Bank Statements: At a minimum, Fresh Funding will want to have several months’ worth of your bank statements to review so they can better gauge your ability to repay the debt.
- Financial Statements and Projections: Fresh Funding may or may not require you to have financial statements as it will depend on a number of factors. Very often, small businesses will have difficulty projecting future revenue of their business, but the absence of a projection is not a deal breaker with Fresh Funding.
Application Process
Fresh Funding has changed the mindset of the typical loan approval process. They can approve a loan within 24 hours and fund it the same day. Their goal is a reliable, simple and quick funding for your business. To take advantage of their business model you can apply online or submit a signed loan application with your last three months of bank statements for your business account.
If online is the preferred method, the process begins with a very brief application which will result in your being contacted by a funding specialist. The basic information needed is your business name, your name, as well as an email address and phone number at which to reach you. Lastly, they will want to know how much money you are hoping to borrow.
Thereafter, the funding specialist will assist you in completing a more formal application if you choose to move forward in the process. You may be required to submit various documents and financial information to support your request, as well as evidentiary documentation (your driver’s license or passport, as well as documentation of your company’s EIN, for example).
Upon approval of your loan request (which generally is done within 24 hours) your funds can be disbursed shortly thereafter, and generally within 36 hours of loan approval. For many borrowers, disbursement time is a major consideration as an undue delay can affect your operations, and even cause you to lose clients, which could have a significant impact on loan repayment. Fresh Funding wins points for its quick disbursement time and the staff’s true desire to help you get going.
Help & Support
At all times, the Fresh Funding team acts as true professionals. They assist clients through the entire loan request process, from pre-qualification through to approval, disbursement, repayment and servicing. Customer service is available via email or by phone five days a week, from 8am to 5pm (EST). They also have a presence on social media, including Twitter, Instagram and Facebook.
Testimonials on the company’s website express appreciation for dependable and fast service, as well as the one-on-one interaction with team members.
Final Thoughts
The Fresh Funding model is very unique in that every funding request is reviewed to ensure that they meet the borrower’s needs, and the staff tries to find ways to fund every applicant. They believe in the old-fashioned, personal approach, and when needed, can be creative as regards underwriting. Whatever funding requirements you need to have addressed, Fresh Funding is ready to assist and ensure that your business will succeed.
Having been in the business for only a relatively short time, the only shortcoming they have is the absence of verifiable candid user reviews from sources other than their own website, such as those one might typically find on Trustpilot or the Better Business Bureau. Having said that, if you take time to contact Fresh Funding, you should find that the team is helpful, courteous, and happy to help in any way they can; this should say more than any customer review.
