Fora Financial Review: Merchant Cash Advances & Short-Term Loans

Pros

• No credit score requirements
• Discounts for repaying early
• Suited for quick business financing
• The application process is fast and easy
• Customer service helpful

Cons

• Rates can be expensive
• Some additional fees charged
• Repayments are required frequently

Fora Financial Overview

Fora Financial is an alternative small business lender based in New York City. Founded by two college roommates, and previously known as Paramount Merchant Funding, Fora Financial is a merchant cash advance and short-term loan provider.

Fora Financial is a pretty good benchmark for online lenders. It offers relatively fast funding in the form of short-term loans and merchant cash advances with relaxed credit qualifications. The funding isn’t cheap, but it’s not absurdly expensive either, with rates coming in slightly under the median.

If you don’t have access to less expensive capital, Fora Financial is worth including in your comparisons as long as you’re sure your business can sustain the fast repayments. It’s a good lender to fall back on if your credit is keeping you from getting a better deal.

Read on for the low-down on Fora Financial.

Services Offered By Fora Financial

Fora Financial offers two short-term lending products. The first, merchant cash advances (MCA), are an agreement wherein the funder purchases a percentage of your future daily credit card sales for a lump sum. The funder then “holds back” a percentage of your card-based sales each day until the terms of the advance are fulfilled. The other, short-term loans (STL), are loans with a term length usually less than a year. Short-term loans use flat fees rather than interest rates and are repaid daily or weekly.

Fora Financial Borrower Qualifications

These are the qualifications for getting a merchant cash advance from Fora Financial:

And these are the borrower requirements for getting a short-term loan from Fora Financial:

Fora Financial does not advertise a minimum credit score requirement on its website. This company does a hard credit check on your personal score to help determine your terms, but a poor score alone will not stop you from accessing capital.

However, Fora Financial is strict about its other guidelines. If you have been in business for less than six months or your monthly sales fall below the amounts listed above, your application will most likely get rejected. If you’re trying to qualify for a merchant cash advance, remember that the $5K/monthly revenue minimum must be in credit or debit card sales.

Additionally, Fora Financial does not lend to businesses in the following industries:

• Accounting
• Adult entertainment
• Auto sales
• Financial institutions
• Gambling
• Lawyers
• Nonprofits
• Real Estate Sales

Finally, your business cannot be in open bankruptcy or have closed a bankruptcy case within the last year.

Fora Financial Interest Rates & Fees

These are the rates and fees for Fora Financial’s products:

Merchant Cash Advances

Merchant cash advances, which are technically purchases of a percentage of your future card-based sales and not loans, are repaid through a daily deduction of a percentage of your card sales (which are usually variable), so there is no true term length.

Instead of charging interest, Fora Financial charges a one-time factor rate (sometimes called a “buy rate” or “flat fee”). To understand how much you’re paying, multiply the rate by the principal. For example, if you’re borrowing $50K and you have a factor rate of 1.2 (or 20%, as it’s often written), you’ll have to repay $60K: $50,000 x 1.2 = $60,000. In most cases, you’ll be making daily payments. In the case of advances, these payments will be a percentage of your card-based sales for the day.

Even though the factor rate is often communicated as a percentage, it’s not the same as APR. In general, the shorter your term length, the higher your APR — even if you’re still repaying $0.20 in fees for every dollar borrowed.

Short-Term Loans

Short-term loans, unlike MCAs, are technically loans; however, their terms are different than what you might be used to with traditional installment loans.

Like with merchant cash advances, you’ll get charged a flat fee rather than a traditional interest rate. You’ll also be making regular payments, typically daily, until your loan is paid off. In this case, however, these will be flat payments deducted from a business account rather than a percentage of your daily sales.

Normally with this type of loan, because the fee is only calculated when the loan is disbursed, you would not save money by repaying early. However, Fora Financial does offer a discount for repaying early, as low as $1.10 for every dollar still owed.

Application Process

Fora Financial has an expedited application process consisting of a one-page form. A representative will call for more information, which will include such tidbits as monthly sales, how long you’ve been in business, and pertinent contact information. They’ll also answer any questions you might have. At this point, they’ll do a soft pull on your personal credit and provide you with an estimated quote detailing your potential fees, options, and term lengths.

If you wish to continue the process, they’ll send your application through underwriting to verify and finalize your information. If everything checks out, you’ll be officially approved, and the money will be wired into your bank account. Final approval can arrive within 24 hours, with funds landing in your account as soon as 72 hours later.

Additional documents you may be asked to present include:

• Three months of credit card statements (for merchant cash advances)
• Three months of bank statements
• Some applicants may be asked to submit tax returns, a balance sheet, or a P&L

Sales & Advertising Transparency

Fora Financial falls somewhere in the middle of the pack for alternative lenders when it comes to transparency. You’ll find information about qualifications and repayment on the company’s website, but not much about specific rates.

Overall, there’s not too much obfuscation and fluff that tends to plague fintech websites.

Customer Service & Technical Support

Fora Financial is available by phone or email. The company also has Twitter and Facebook accounts.

Many customers cite the company’s customer service as a high point of working with Fora Financial. Reviewers claim that the company is honest, transparent, easy to get a hold of, and not overbearing or trying too hard to make a sale.

Fora Financial Reviews, Complaints, & Testimonials

Negative Reviews & Complaints

Fora Financial has a presence on the Better Business Bureau website, where the company holds an A+ rating and four complaints closed over the past three years. It has 11 customer reviews with an average rating of 2.4/5 stars. Additionally, there are a few reviews on Yelp and Google. Here’s what people don’t like about the service:

• Expensive Capital: Financing from Fora Financial is not cheap.
• Potentially High Origination Fee: Fora Financial charges between a 1% and 4% origination fee (before wiring your capital along to you, the company will take a percentage cut of it). At the high end, this fee can be pretty punishing.
• Sales Pressure: A few customers complained that they felt railroaded into completing an application after contact with Fora Financial.

Positive Reviews & Testimonials

As you might expect, Fora Financial has numerous testimonials on its website. You can also find customer reviews on Yelp, Google, and Trustpilot. Customers are happiest with:

• Customer Service: Most customers posting positive reviews found Fora Financial’s customer service helpful and responsive.
• Fast Funding: Customers appreciated the speed and ease with which they received funding.
• Easy Qualifications: Customers with poor or little credit appreciated that the company was still willing to work with them.

Is Fora Financial The Right Lender For Your Business?

Fora Financial’s offerings are competitive with other funders that offer short-term financing. You might get a better deal here than with another alternative funder, or you might not. Your rates will depend entirely on the funder’s underwriting. Anybody who can’t get less expensive financing would benefit from including Fora Financial in their comparisons; it works well as a fallback option.

Don’t make the mistake of thinking that a merchant cash advance is your only option, though. Many online lenders fund businesses that aren’t even close to being bankable. Check out our list of the best alternatives to merchant cash advances, and maybe you’ll find a less expensive option that will work for your business.

Fora Financial FAQs

The Merchant Maverick Seal of Approval 🏆

Fora Financial	Apply Now

After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see Fora Financial for yourself.

The Merchant Maverick Seal of Approval 🏆

Fora Financial	Apply Now

After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see Fora Financial for yourself.

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