Rapid Advance Review
- Date Established
- 2005
- Location
- Bethesda, MD
Pros
- Low factor rates
- Low origination fees
Cons
- Some additional fees
- Limited support materials
Overview
Rapid Advance is a Maryland-based alternative small business funder. It offers merchant cash advances (MCAs) and short-term business loans to small businesses seeking short-term funding. Unlike many of its competitors, it offers a number of variations on the typical MCA, leading to a slightly longer application process, but also better rates in many cases.
As always, you’ll want to be sure you don’t have cheaper alternatives before signing up for a cash advance or short-term loan. Before moving forward, take a look at our short-term funding comparison chart and make sure you don’t qualify for better terms.
Table of Contents
Services Offered
Rapid Advance offers the following types of business funding:
Borrower Qualifications
Rapid Advance offers a more diverse product line-up than many non-traditional funders. Though they’re all variations on the same short-term funding theme, depending on where you live and the nature of your business, you may have more options than with many similar funding sources.
To qualify for funding from Rapid, you must meet these prerequisites:
| Requirement | Minimum requirement |
|---|---|
| Time In Business: | 12 months (STL) 3 months (MCA) |
| Personal Credit Score: | 500 |
| Revenue: | No specific minimum requirement - depends on the amount borrowed |
Terms & Fees
It’s pretty much a given that you’ll only glean a limited amount of information from non-traditional lenders’ websites, though Rapid Advance’s site is slightly above par. You can get an overview of the company’s programs on their financing solutions page, which features a fairly entertaining interactive video:
| Requirement | Minimum requirement |
|---|---|
| Borrowing Amount: | $5,000 - $1 million (STL) $5,000 - $500,000 (MCA) |
| Term Length: | 4 - 18 months |
| Fixed Fee: | 9% - 31% of the borrowing amount |
| Origination Fee: | 0% - 2.5% (depending on the product) |
| Effective APR: | Learn more |
| Collateral: | UCC-1 blanket lien |
Whether you end up with a loan or an advance, the system behind it is very similar. If you’re used to traditional lending, the “flat fee” portion of the above chart might be confusing. That’s because the type of funding Rapid provides isn’t interest-based. Instead, you’ll be paying off the amount you borrowed times a multiplier referred to as a “flat fee” or “factor rate.” So if you’re borrowing $10,000, at Rapid’s lowest factor rate you’ll be paying back $10,900. You can expect to pay back between $1.09 and $1.20 for each dollar you borrow, not including origination fees. For some of its products, Rapid may instead quote a monthly interest rate (1.25 percent, for example). To find out how much you’ll owe, take the amount you’re borrowing, multiply it by your monthly interest rate, then multiply the result by the length of your term in months. For example: $10,000 x 0.0125 x 12 = $1,500.
Where you fall on that scale will depend on the assessments Rapid makes of your business, including your credit rating.
Rapid will likely triage you toward its loan or advance program based, in part, on how your company does business and how long it’s been around. No matter what, you’ll be making daily payments.
If you don’t do business via credit cards, you’ll be repaying a daily fixed amount via an automated clearing house (ACH) debit from your banking account. This is known as a short-term loan.
A line of credit loan pre-approves the borrower for a certain amount of credit. You can draw on that credit whenever you want. So if you’re approved for $10,000 and borrow $5,000, you’ll immediately start paying back the $5,000, but you could still take out an additional $5,000 if you chose to.
If you do sales in credit cards, you have the option of getting a merchant cash advance. In this case, you’ll share a fixed percentage of your daily credit card sales with Rapid until you’ve repaid the debt. Note that repaying this way means you won’t have a definitive term. The loan is repaid whenever it is repaid. Be aware, however, that MCAs tend to have some of the highest rates when it comes to alternative funding.
Rapid offers premium versions of both its loan and MCA products. These come with better rates, so long as you can meet the more stringent qualifications. For the Preferred Rate Loan, you’ll have to have a credit rating of 660 or higher and have been in business for more than four years. For a Premium Merchant Cash Advance, you’ll need to have been in business for at least three years.
Finally, state laws for short-term funding vary significantly, so the availability of each product, as well as the amount you can borrow, is subject to where your business is located.
Application Process
As a short-term lender, Rapid prides itself on getting you through the application and approval process quickly.
To begin the process, you can either call Rapid or fill out a short application form online. You’ll want to be able to produce documents confirming your revenue. Rapid Advance will do a hard pull on the credit of qualifying applicants.
Approval can come within 24 hours, with funding available in as soon as three days.
Sales & Advertising Transparency
There’s quite a bit going on on Rapid Advance’s website, although a lot of it isn’t especially useful information. Still, it can give you a decent, zoomed-out view of what the company offers.
Sales staff was willing to answer more specific questions when I called directly, but you’ll probably need to get a quote to get all the details.
Customer Service & Technical Support
I had an easy time reaching customer support, and they seemed agreeable to answering my questions.
Unlike many similar funders, Rapid actually has a pretty large customer review footprint. Customers generally reported positive experiences dealing with Rapid’s staff.
Customer service can be reached by phone or through their Facebook, Twitter, LinkedIn, and YouTube accounts.
Negative Reviews & Complaints
Rapid Advance maintains a mostly positive reputation with its customers, but there are a handful of complaints:
- Difficulty Getting Approval:Â Some customers reported that the approval process dragged out longer than expected and ultimately didn’t end in approval despite reassurances from staff.
- Costly:Â As is common with short-term lenders as a whole, you can end up paying quite a bit of money each month.
- Customer Service:Â Some customers reported not being able to reach their representatives when they needed to.
Positive Reviews & Testimonials
Rapid Advance has an A+ rating from the BBB, with 98 percent of the customer reviews on that site being positive. It also rates a 9.8 out of 10 on TrustPilot.
- Comparatively Good Rates:Â A lot of customers found that Rapid’s rates were lower than those of many similar business funders.
- Easy Application Process:Â Most users appreciated that the application process was easy, quick, and painless.
- Customer Service:Â Many users were happy with the customer service they received.
Final Verdict
While many alternative lenders have begun to move away from merchant cash advances, Rapid is maturing within its niche, and now offers more competitive versions of its products. It’s still an expensive way to borrow money, but if you’re turning to the alternative lending market, you could do much worse than Rapid.
Looking for the best rates? Check out our alternative suggestions to make sure you’re making an informed decision.
Chris Motola
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Organization Name: Hamilton Investment Properties
You did not point out one of the obvious “Cons” with Rapid Advance, and that is the resolution of disputes. I.e. my company that I lost controlling interest in after dealing with Rapid Advance. Even with the strain of paying $135 per day on a Loan or over $2,700 per month on a $13,000 Loan, I would get double payments days deducted from my Bank without Notice causing hundreds of dollars of NSF Charges as well as missed payments on other obligations. My complaint was answered simple with the claim Rapid did not do this in the Face of Documented evidence from my Bank that had no choice but to Block the automatic Bank Deductions. This company refuses any payment arrangements outside of complete control by auto deductions from Business Banking. They will file false UCC negative statements claiming you refused to pay them, and not admit they refused payment without control of you Bank Account..
If you have any kind of credit rating you should tell people tom stay away from these type Lenders.
This comment refers to an earlier version of this review and may be outdated.
Thank you Chris Matola for sharing your research on Rapid Advice. It was very detailed information as were the links.
This comment refers to an earlier version of this review and may be outdated.