Fora Financial Review
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- Date Established
- 2008
- Location
- New York, NY
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.
Convenience always comes at a cost, though. You can expect to repay a fee costing between 1.1-1.3 times the amount of capital extended to you. In other words, for every dollar you borrow, you’ll have to pay between $0.10 and $0.30 in fees. That said, Fora Financial offers some advantages that many of its competitors don’t, including early repayment incentives. It’s also fairly well trusted by former borrowers, with relatively few complaints.
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 or check out our favorite alternatives to merchant cash advances.
Table of Contents
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:
| Time In Business | 6 months |
| Business Revenue | $5,000 in monthly credit card sales |
| Credit Score | 500 |
And these are the borrower requirements for getting a short-term loan from Fora Financial:
| Time In Business | 6 months |
| Business Revenue | $12,000 in monthly gross sales Monthly avg. bank account balance over $1,000 |
| Credit Score | 500 |
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:
| Borrowing Amount | $5,000 – $500,000 |
| Term Length | 4 – 16 months |
| Borrowing Fee | 10% – 30% of the borrowing amount |
| Origination Fee | 1% – 4% of the borrowing amount |
| Effective APR | Learn more |
| Collateral | None required |
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.
Sales & Advertising Transparency
Fora Financial is average in this category. I appreciate that the website has videos to explain how the loans work. The company also discloses almost all the information you need upfront with the glaring exception of their rates.
Otherwise, there’s not much of the obfuscation and fluff that typically afflicts online lenders.
Customer Service & Technical Support
Fora Financial is available by phone or email. If you’re into the whole social media thing, the company 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 three complaints closed over the past three years. It has 11 customer reviews with an average rating of 1.7/5 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.
Final Verdict
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.
Chris Motola
Finance Writer at Merchant Maverick
Chris Motola is a writer, programmer, game designer, and product of NY. These days he's mostly writing about financial products, but in a past life he wrote about health care and business. He's a graduate of the University of Central Florida.
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The Merchant Maverick Seal of Approval 🏆
Fora Financial  |
|---|
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 |
|---|
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.
Read Next
Organization Name: Golden hands
Fora Finacial did a wonderful job for our company we are able to build a business relationship and John Rodriguez did a wonderful job as far as getting the assistance we need it for our company it doesn’t matter your credit score it could be low they’re still able to help you so don’t panic call FORA Finacial they can help you get out of the situation if you own a company.
Organization Name: lawson chiropractic
I am currently being charged 80% interest on a short term loan by Fora Financial. 10,000 is costing me me over 4k over 6 months. They didn’t even give me the whole ten thousand because they took fees out of the principal. Now in the middle of a Pandemic despite my business being down 80% and no stimulus relief in sight they still take out $70 a day from my bank account.. They will receive stimulus money and will not use it for it’s purpose which is to help people in my situatation!
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Road King Express Inc
I will not suggest work with these guys , they promises you one think and at end they hit you big rates ,Stay Away
This comment refers to an earlier version of this review and may be outdated.
Extremely high interest rates and they only let you prepay with less interest in the early months of the loan. I would not recommend Fora to anyone because there are many other quick lenders with much better terms than Fora financial.
This comment refers to an earlier version of this review and may be outdated.
Organization Name: ATWORK
Do you recommend a quick loan lender for a franchise owner? Keep in mind that all the top line revenue runs through the corporate office and not the individual franchise.
This comment refers to an earlier version of this review and may be outdated.
Hi there Kelly,
I’d try ApplePie and Funding Circle first, as they work with a lot of franchises so they might understand the situation better. Best of luck!
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Moon hawk transport llc
Excellent review, great info. Thank you, this definitely helps with my decision.
This comment refers to an earlier version of this review and may be outdated.
I agree thanks for the heads up of how these people make their money much appreciated.
Chris
This comment refers to an earlier version of this review and may be outdated.
Excellent excellent review! I just received an offer from Fora and had no idea what I was in for. What would the Internet be without writers like you
This comment refers to an earlier version of this review and may be outdated.
Thank you for reviewing Fora Financial. I do feel like I need more information on STL/MCA however I now know where to start. The article is well written and very helpful.
This comment refers to an earlier version of this review and may be outdated.
Thank you for the very detailed feedback. Very helpful.
This comment refers to an earlier version of this review and may be outdated.