Wellen Capital Review
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- Date Established
- Northbrook, IL
- Low origination fee
- Relaxed credit requirements
- Moderate factor rates
- Opaque terms and fees
Wellen Capital — formerly known as Gibraltar Capital Advance until 2018 — is an Illinois-based merchant cash advance (MCA) alternative funder. MCAs typically serve small-to-medium-sized businesses with poor credit but good cash flow.
Wellen structures its fees in a somewhat novel way compared to most of the industry. The arrangement would seem to work in the favor of companies seeking a fairly large amount of money which also have the ability to pay it back quickly.
Note: You should approach the world of alternative funding with caution; the rates are often usurious and the terms can be punishing for the unprepared or unlucky. You should always make sure you’ve exhausted other potential sources of funding first. (Take a look at our handy short-term funding comparison chart to review your other options.)
Table of Contents
Wellen Capital offers the following types of business funding:
Customers must meet the following qualifications:
|Time in business:||12 months|
|Business revenue:||$12,000 per year|
You must also work in an approved industry to qualify for funding. Most industries will qualify, but restricted industries include:
- Auto dealers
- Adult entertainment businesses
- Gas stations
- Marijuana dispensaries
Trucking companies and businesses in the construction industry may qualify for funding with Wellen. However, trucking companies must have a minimum of 5 years in business to be considered.
Terms & Fees
Wellen’s terms and fees fall into this range:
|Borrowing amount:||$10,000 – $200,000|
|Term length:||4 – 12 months|
|Flat fee:||x1.24 – x1.35|
|Additional fees:||1.5% origination fee +|
$89 per month
|Effective APR:||Learn more|
Wellen offers MCAs in both the traditional credit card transaction form and the fixed payment alternative. In both cases, you’ll be making automated daily repayments, but there are some key differences. If you do enough of your business through card payments, Wellen will hold back a percentage of your sales (usually around 10%) each day until the advance is paid off.
The alternative is to use fixed payments automatically withdrawn from your bank account through automated clearing house. In this case, your term length will be more fixed. This form of repayment can actually be a bit riskier, since it’s not pegged to a percentage of your daily sales. On days where you have poor sales, you’ll still owe the fixed payment amount.
MCAs don’t use interest rates like traditional loans. Instead, they charge a fixed fee that is determined by a multiplier called a factor rate. In the case of Wellen, you’re looking at a multiplier between 1.24 to 1.35. So if you borrow $10,000, you’ll need to pay back somewhere between $12,400 and $13,500. Generally, you can expect poor credit and higher term lengths to raise the factor rate.
Wellen can advance small businesses amounts from $10,000 to $200,000. The company will advance up to 15% of your total annual revenue.
Wellen uses an unusual model for additional fees. Its origination fee is lower than that of most of its competitors. Typically that amount is deducted from the lump sum you receive. On the other hand, the company charges a monthly account maintenance fee, which adds additional costs the longer your account is open.
After you’ve paid off 50% of your advance, you are eligible for additional funds. This is not considered refinancing, so you shouldn’t–in theory–fall victim to double-dipping.
You can begin the application process online by filling out Wellen’s short form.
If you’re approved, you’ll be contacted by a representative who will walk you through the rest of the process. Be prepared to provide proof of your business revenue and credit card income if applicable.
Applications are usually processed and funded within 24 hours.
Sales & Advertising Transparency
Wellen plays its cards pretty close to the chest, offering little useful information on the company’s website. You can find some general industry info under the website’s white pages heading.
Customer Service & Technical Support
You can reach Wellen Capital by phone, or use the online messaging forms on the site (in the lower left-hand corner).
The company also maintains a Twitter account.
Negative Reviews & Complaints
Wellen — under the name Gibraltar Capital Advance — currently has an A+ rating with the Better Business Bureau, with no record of complaints or reviews. User reviews are in short supply online. Here are a few of the concerns I would have with the company:
- Lack of transparency: The company doesn’t provide much information about its product on its site, which puts Wellen behind emerging trends in the MCA industry.
- Monthly fees: It’s worth mentioning that it comes with the trade-off of a low origination fee, but the monthly fees can easily add up here.
- Cost: Not unique to Wellen, but MCAs are generally an expensive way to fund your business.
Positive Reviews & Testimonials
Here are some of the upsides Wellen seems to offer:
- Customer service: Staff is reachable and willing to answer questions.
- Fast: Compared to traditional loans, Wellen can get you your money very quickly.
- Low origination fee: It comes at the cost of a high monthly fee, but Wellen’s origination fee is on the low side for the industry.
Wellen Capital seems to be cutting out an unusual niche in the MCA business. Its rates fall within a fairly narrow range and the origination fee is a very small percentage of the amount of money you’re funded. The big point of caution here is that longer-term arrangements can get you bogged down in monthly fees, but depending on your circumstances the math might work out for you.
As always, we suggest serious comparison shopping when it comes to alternative funding. Take a look at our alternative suggestions page if you want to see what else is out there.
Business Loan Rating Criteria.