Gone are the days when small business owners needing money had to get a bank loan – or were resigned to getting no loan at all. Luckily for small business owners, there are many options for alternative lending today, designed for businesses that aren’t qualified for a bank loan, that need funding more quickly than a bank can provide, or that are looking for a bank loan alternative for any reason. One such lender who may be able to help is RapidAdvance, which has been in operation since 2006 and which, to date, has funded more than $1 billion in small business loans. RapidAdvance, located in Bethesda, MD, provides short-term funding for small business owners located throughout the United States (with some exceptions as explained later). The company offers traditional small business loans (with three tiers to choose from, depending upon your needs and ability to meet underwriting criteria), typical merchant cash advances, business lines of credit and small business bridge loans.
RapidAdvance claims on its website that it can fund a small business loan in as little as one day, but that may likely be an exception rather than the norm. The company does appear to have a lengthier application and underwriting process that some other alternative small business lenders, but that may simply be because they offer several different funding options.
One thing that was specifically impressive during this RapidAdvance review is that the company looks at a small business’s bigger picture when assessing a company's creditworthiness. In other words, RapidAdvance looks beyond a company's credit score to fully assess the overall health of the company.
It should be noted that while RapidAdvance's criteria for providing funding may, in some cases, be less stringent than a traditional bank's requirements, it generally will also mean that you'll pay more for that opportunity. It is always prudent to compare the potential costs of a short-term loan or cash advance funding between banks and alternative funding sources; even among alternative sources, interest and factor rates can vary, as can any promotional offerings.
In general, RapidAdvance can satisfy a range of funding needs for the majority of small business owners. The offerings range from short-term loans, to lines of credit, merchant cash advances and SBA bridge loans, all of which can be turned around and funded within a short period of time. The company says that the average turnaround time between application and submission is two days.
|Factoring Rate||Fees||Collateral Required|
|Small Business Loans||$5,000.00||$1,000,000.00||1.11 to 1.31||0% to 2.5%||UCC-1 Lien|
|Merchant Cash Advances||$5,000.00||$500,000.00||1.09 to 1.12||None||No|
|Line of Credit||$1,000.00||$100,000.00||1.11 to 1.55||None||UCC-1 Lien|
RapidAdvance Small Business Loan Offerings
RapidAdvance offers three tiers of SMB services; Standard, Select and Premium.
RapidAdvance Merchant Cash Advance (two options)
RapidAdvance SBA Bridge Loan
RapidAdvance also offers business owners an SBA Bridge Loan to satisfy financial obligations in the period between the approval of an SBA loan and the SBA funding. Additional details were unavailable on the company’s website when this RapidAdvance review was done, but the company welcomes your inquiries.
RapidAdvance does not have an application fee, nor do they have a pre-payment penalty – both huge advantages that were discovered during this RapidAdvance review. Origination fees are dependent upon the type of loan you are looking for while the rate will be dependent upon a number of different factors. For example, the owner's creditworthiness, number of years the business has been in operation and the applicable sales revenue will allow RapidAdvance to gauge the appropriate rate to charge. The factoring rates will vary between products, as well, but generally range from 1.11 to 1.31. Bear in mind that the factoring rate may look good at first glance but looking at it expressed as an Annual Percentage Rate (APR) may provide you with a bit of sticker shock. An online search for a calculator which will convert your factor rate to an APR (based on your input such as amount borrowed and repayment terms) will come in handy when you are comparing funding choices as that rate expressed in decimals could look far different expressed as the more familiar percentage.
Eligibility requirements for the small business borrower will vary depending on the type of funding desired and the length of the term needed. In general, for the lowest tier of funding, a potential client will need to have very good credit, with a minimum credit score of 550. Again, for the lowest tier of funding, businesses will also need to have been in operation for a minimum of one (1) year and will need to have a stable revenue stream with, in some cases, minimum monthly gross sales. Depending on the type and amount of funding being sought, RapidAdvance may require the business owner's personal guaranty, especially if his or her personal ownership in the company is below 51%. The business owner will also be required to provide, at a minimum, a photo ID (government issued, i.e. driver's license or US passport), a business checking account with a voided check (necessary to set up the ACH repayments), three recent statements from your bank, and three recent credit card statements (in general, a minimum of $2,500 in gross monthly sales is required).
While RapidAdvance claims they provide nationwide coverage, that is not necessarily the case in every instance. RapidAdvance does not provide short-term loans in five specific states; namely, New Jersey, Rhode Island, Montana, South Dakota or Nevada. In those states, potential borrowers will be limited to merchant cash advances and lines of credit. Moreover, RapidAdvance does not offer funding for new businesses or start up entities. They also will not provide funding to certain categories of businesses; exclusions to funding include businesses such as law firms, churches, kiosks, insurance companies, travel agencies, pay day loan companies, construction companies, among several others.
The process to apply and pre-qualify for any type of loan with RapidAdvance begins with a short online questionnaire which asks for the basics: Full name, business name, number of years the business has been in operation, estimated total monthly sales, proposed purpose of the loan (renovation, equipment purchase or repair, inventory, debt obligations, emergencies, etc.) an email address, and phone number so that a customer service representative can call you. It should be noted that if you are not the business owner, you will be required to call RapidAdvance's customer service team to help with the application process. With the submission of your Social Security number and your approval for RapidAdvance to proceed with the evaluation during the pre-qualification application process, your credit report will be hard pulled.
After the pre-qualification stage you will receive an estimate funding amount and then given the option to pursue the application process. You will also need to provide proof of ownership of your business. RapidAdvance says that they look at the bigger picture when making a credit decision, not necessarily just your credit score. To that end, it is quite possible that they will return with requests for additional information, especially if the loan amount requested is among the higher tiers or requires a longer repayment term.
A common complaint, even from existing customers, is that the overall process is tedious and cumbersome. Moreover, the process tends to be quite “document heavy.” It is recommended that you obtain all necessary and potentially necessary documents before you begin the process. Customer service representatives are readily available to smooth out the process, if needed.
RapidAdvance has a dedicated team of customer support representatives who are ready to help you begin the process and who will be there at each step. They can be reached by phone or through any of their social media platforms. The website itself has an inter-active video module to help you decide where to begin if you're new to alternative funding. The chairman of RapidAdvance, Jeremy Brown, writes that technology is available to them only as a means of forming their decision; he believes that their professional team works to understand the business, goals and future needs of their clients. Clearly, they do not have a “one size fits all” mentality; Mr. Brown likens himself and his team to like-minded entrepreneurs who understand the nitty-gritty of the small business owner. Each client has access to an online portal where they can view their account history and repayment schedules.
In general, the majority of RapidAdvance reviews from customers were positive. On the website, Trustpilot, which RapidAdvance links to on its landing page, you will find that there are over 750 customer reviews, with 92% of them giving RapidAdvance a 5-star rating. Of the 5-star reviews, the claim was primarily due to great customer service, with many reviewers calling out specific loan officers as “exceedingly helpful,” and “awesome,” among other compliments. Even when there was a complaint over the high fees and interest charges, most reviews still highlighted the exceptional customer service they received.It should be noted that “verified orders” on Trustpilot were few and far between; Trustpilot notes that “verified orders” indicates that the review was either invited directly by the company or the reviewer submitted documents to evidence his or her interaction and experience with the company. Of the “verified orders,” more than a few had complaints about RapidAdvance. Generally, those complaints referred to the high rates and the daily repayments as being cumbersome. On another site, one customer complained that the automatic ACH repayments had inexplicably been deducted twice a day from their checking account which resulted in a number of overdrafts.
RapidAdvance provides small business owners with an alternative source of short-term funding if and when more traditional lenders are not open to your business. The initial pre-qualification process is quick, and the response by the lending officers is generally quick. If qualified, they want to be able to provide you with a quick turnaround of funds; while some loans can be funded in a day, it may in some cases take up to a week while the average is two days. Despite what appears to be excellent reviews of the company, potential customers should consider alternative funding sources as a last resort. To that end, they might want to extinguish all other possible traditional sources of funding before turning to an alternative lender as the savings over the longer term by going the more traditional route could be significant. Finally, again, despite the number of very good reviews, it would perhaps be prudent to take them “with a grain of salt,” given that they do seem to have quite a bit of similarities in language and tone, which might indicate a bot or some other sort. Having said that, among its peers, RapidAdvance seems to be carving out a niche for itself, given the variety of loan offerings and a customer service team which is intent on making the process as seamless as possible.