A business cash advance — also known as a revenue advance or merchant cash advance — is a way to borrow a lump sum based on your future sales or revenue. Requirements are generally more lenient than other types of business financing, and funding is typically fast, making it an option for newer businesses or those with less-than-perfect credit. But this type of funding can be expensive so it’s important to compare multiple lenders to find the best deal.
Consider our top picks for business cash advances, including a wide range of advance amounts, loan terms and rates.
If you want someone else to do the legwork for you, consider Lendio — a business loan marketplace with dozens of lenders and relatively lenient requirements compared to others. Just a 500 credit score, $8,000 in monthly revenue and six months in business could be enough to qualify for a revenue advance with one of Lendio's partners. Plus, you could be eligible for a business cash advance of up to $2 million with factor rates starting as low as 1.08 and terms that stretch as long as 36 months. But keep in mind that applying through a marketplace can open you up to unwelcome solicitation, and some reviewers say Lendio requires more documentation than other lenders.
Loan amount
up to $2 million
Starting Factor Rate
1.08
Min. Credit Score
500
If you want someone else to do the legwork for you, consider Lendio — a business loan marketplace with dozens of lenders and relatively lenient requirements compared to others. Just a 500 credit score, $8,000 in monthly revenue and six months in business could be enough to qualify for a revenue advance with one of Lendio's partners. Plus, you could be eligible for a business cash advance of up to $2 million with factor rates starting as low as 1.08 and terms that stretch as long as 36 months. But keep in mind that applying through a marketplace can open you up to unwelcome solicitation, and some reviewers say Lendio requires more documentation than other lenders.
Pros
Compare multiple lenders with one application
Factor rates as low as 1.08
Advances up to $2 million
Cons
No guarantee you'll qualify for the lowest rates
Marketplaces often mean more solicitation
May require extensive documentation
Loan amount
up to $2 million
Starting Factor Rate
1.08
Min. Credit Score
500
Loan Term
up to 36 months
Requirements
500 FICO credit score, $8,000 monthly revenue, 6 months in business
Fora Financial offers revenue advances up to $1,500,000, and you only need to be in business for six months to qualify. Unlike many cash advance lenders, Fora offers prepayment discounts and the opportunity to increase the amount you borrow after paying off at least 60% of the original advance. But you'll need at least $25,000 in monthly revenue to qualify, it doesn't build business credit and rates can reach as high as 40%.
Loan amount
$5,000 – $1,500,000
APR
Varies
Min. Credit Score
570
Fora Financial offers revenue advances up to $1,500,000, and you only need to be in business for six months to qualify. Unlike many cash advance lenders, Fora offers prepayment discounts and the opportunity to increase the amount you borrow after paying off at least 60% of the original advance. But you'll need at least $25,000 in monthly revenue to qualify, it doesn't build business credit and rates can reach as high as 40%.
Pros
Advances up to $1,500,000
Prepayment discounts
May be able to borrow more after paying down balance
Cons
Rates as high as 40%
Requires $25,000 in monthly revenue
Charges a one-time processing fee
Loan amount
$5,000 – $1,500,000
APR
Varies
Min. Credit Score
570
Loan term
4 to 18 months
Requirements
6+ months in business, $25,000+ gross monthly sales, no open bankruptcies
While business cash advances tend to be an expensive form of financing, Credibly's factor rate, starting at 1.11, is on the lower end of average, making it more affordable than some of the competition. It also offers a fast approval process with funding possible as soon as the same day you apply. But you may be required to make daily repayments, and you'll need at least $15,000 in monthly revenue to qualify.
Loan amount
$5,000 to $600,000
Starting Factor Rate
1.11
Min. Credit Score
500
While business cash advances tend to be an expensive form of financing, Credibly's factor rate, starting at 1.11, is on the lower end of average, making it more affordable than some of the competition. It also offers a fast approval process with funding possible as soon as the same day you apply. But you may be required to make daily repayments, and you'll need at least $15,000 in monthly revenue to qualify.
Pros
Relatively low factor rates
Same-day funding possible
Accepts lower credit scores
Cons
Advance amounts only up to $600,000
Requires $15,000 in monthly revenue
May require daily repayments
Loan amount
$5,000 to $600,000
Starting Factor Rate
1.11
Min. Credit Score
500
Loan Term
3 to 24 months
Requirements
500+ credit score, 6+ months in business, $15,000+ average monthly bank deposits
If your business generates at least $150,000 in monthly revenue, you might be eligible for a business cash advance of up to $5,000,000 from Libertas. It offers funding in as little as 24 hours and has renewal options available. But you'll need a personal credit score of at least 630, it doesn't disclose its rates on its website and minimum revenue requirements are high compared to other lenders.
Loan amount
up to $5 million
Min. Credit Score
630
If your business generates at least $150,000 in monthly revenue, you might be eligible for a business cash advance of up to $5,000,000 from Libertas. It offers funding in as little as 24 hours and has renewal options available. But you'll need a personal credit score of at least 630, it doesn't disclose its rates on its website and minimum revenue requirements are high compared to other lenders.
Pros
High advance limits up to $5,000,000
Funding in as fast as 24 hours
Renewal options available
Cons
Minimum revenue requirements are high
630 minimum credit score
Rates and fees aren't disclosed
Loan amount
up to $5 million
Min. Credit Score
630
Loan Term
up to 12 months
Loan amount
up to $5 million
Min. Credit Score
630
Best for self-employed workers
Giggle Finance
It can be difficult to qualify for financing when you're self-employed. But Giggle Finance is answering that need by providing funding for 1099 workers, independent contractors, app-based freelancers and other self-employed individuals. And it's fast — by filling out a quick application and linking your business bank account, you can access capital in minutes. However, advance amounts are limited to $5,000, and it doesn't disclose its rates and fees on its site.
Loan amount
Up to $5,000
It can be difficult to qualify for financing when you're self-employed. But Giggle Finance is answering that need by providing funding for 1099 workers, independent contractors, app-based freelancers and other self-employed individuals. And it's fast — by filling out a quick application and linking your business bank account, you can access capital in minutes. However, advance amounts are limited to $5,000, and it doesn't disclose its rates and fees on its site.
Pros
Caters specifically to self-employed people
Access to funds in minutes
Only 3 months in business required
Cons
$5,000 is the maximum advance
Doesn't disclose rates and fees
Has some negative reviews
Loan amount
Up to $5,000
Requirements
3 months in business
Loan amount
Up to $5,000
Methodology: How we choose these lenders
Finder’s business loan experts analyzed dozens of lenders offering business cash advances. We ultimately chose lenders with competitive rates, fast funding, and flexible repayment terms.
Some of the criteria we used to evaluate lenders include:
Interest/factor rates
Additional fees
Advance amounts
Loan terms
Repayment plans
Turnaround times
Time in business requirements
Revenue requirements
Credit score requirements
Reputation of the lender
How to compare business cash advances
It’s a good idea to compare multiple lenders that offer business cash advances and consider the following factors before deciding.
Rates. Business cash advances typically charge a factor rate rather than interest, and rates can be rather high for this type of financing.
Fees. Some lenders also charge additional fees such as setup, administration or service fees, among others. To save money, look for a lender that charges minimal fees.
Turnaround times. Funding is typically fast for business cash advances, with some offering loans as quick as the same day you apply, although others may take a few days.
Loan terms. Most business cash advances have loan terms of 12 months or less, but a few stretch as far as three years if you need a longer term.
Repayment terms. Advances often require weekly or daily repayment schedules, but some lenders offer bi-weekly or monthly repayment terms, which may make budgeting easier.
Lender requirements. As you compare lenders, keep a close eye on credit score, revenue and time in business requirements to make sure you meet the criteria. Otherwise, you may look for business loans that fit your specific needs, such as business loans for startups or without a credit check.
What is a business cash advance and how does it work?
A business cash advance — sometimes referred to as a merchant cash advance or revenue advance — is an advance based on future sales or revenue. The advance comes as a lump sum payment, and you agree to pay it back through a percentage of your incoming sales.
Most commonly, repayments are deducted automatically from your account weekly or daily, although some agreements may allow for bi-weekly or monthly repayments. Terms are generally short for business cash advances — usually three to 12 months — but some lenders may offer longer terms.
For the most part, revenue advances are not renewable — like business lines of credit — but some lenders advance additional funds after paying off a percentage of your original loan. And, while there isn’t usually an incentive to repay business cash advances early, there are a few lenders, like Fora Financial, for example, that give discounts for early repayment.
Pros and cons of business cash advances
Consider the advantages and disadvantages of business cash advances.
Pros
Typically fast funding
More lenient requirements to qualify
High advance amounts available
Flexible repayment options
Cons
An expensive form of business funding
Loan terms are typically short
May require daily repayments
Limited benefits to repaying early
Compare other business cash advance lenders
Consider these lenders that offer business cash advances and other types of business funding.
The exact requirements to qualify can vary significantly by lender, but you’ll typically need to meet the following minimum criteria:
Six months or more in business
$10,000+ in monthly revenue
Business checking account
Some lenders may also check your credit, although it may only be a soft pull. But in general, your credit score isn’t as heavily weighted for business cash advances as it is with other types of business financing.
How to apply for a business cash advance
In general, the application process for a business cash advance goes as follows:
Fill out a simple online application.
Submit the required documentation.
Review your offer and sign your agreement.
Get funded and follow the repayment plan.
Some lenders may require an extra step where you talk to a lending specialist prior to funding, but that’s not always the case.
Alternatives to business cash advances
Because business cash advances are generally one of the more expensive forms of business financing, you may want to consider a few other options.
Online business loans. If you’re struggling to qualify for traditional bank loans, you may have better luck looking into online business loans instead. They typically have more lenient requirements than banks and offer more affordable financing than revenue advances.
Invoice factoring or financing. If you sell to other businesses or government agencies, invoice factoring or financing could be a good option. Like business cash advances, requirements are usually more lenient than other types of loans, but selling your invoices can also be quite expensive.
Business line of credit. A business line of credit is another good option to cover cash flow needs — and it’s renewable and more affordable — but requirements to qualify may be more strict.
Equipment financing. If your goal for the cash advance is to buy equipment or machinery, an equipment loan may be a better move. The equipment acts as collateral for the loan, so you might qualify even if your credit isn’t ideal.
Frequently asked questions
Is a business cash advance a good idea?
Business cash advances are generally quite expensive, but they may be an option if you can’t qualify for other types of business funding. However, the repayment plans can be rigorous, so be sure the payments fit your budget.
Will a business cash advance hurt my credit?
If the lender requires a hard credit pull as part of the application process, your score might drop a few points. However, lenders that offer revenue advances generally don’t report to the credit bureaus, so even if you can’t make your payments, there shouldn’t be any impact on your credit score.
Lacey Stark is a freelance personal finance writer for Finder, specializing
in banking, loans, investing, estate planning, and more. She has 20
years of experience writing and editing for magazines, newspapers, and
online publications. A word nerd from childhood, Lacey officially got her
start reporting on live sporting events and moved on to cover topics
such as construction, technology, and travel before finding her niche in
personal finance. Originally from New England, she received her
bachelor’s degree from the University of Denver and completed a
postgraduate journalism program at Metropolitan State University also
in Denver. She currently lives in Chicagoland with her dog Chunk and
likes to read and play golf. See full bio
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