Rapid Finance Review
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- Date Established
- 2005
- Location
- Bethesda, MD
Pros
- High borrowing amounts
- Few extra fees
- No prepayment penalties
- The application process is fast and easy
- Customer service is helpful
Cons
- Rates can be expensive
- Repayments are required frequently
- No long-term financing options available
Overview
Rapid Finance (formerly 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 provides 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 Finance offers the following types of business funding:
- Merchant Cash Advances: A merchant cash advance isn’t a loan, although it superficially resembles one. Instead of lending you money, the funder buys a percentage of your future credit and debit card sales. It will collect fees each business day until the terms of the advance are satisfied. Compared to loans, merchant cash advances are usually easier to qualify for and more expensive.
- Short-Term Business Loans: Short-term loans provide the borrower a lump sum of cash. In exchange, the borrower makes daily or weekly payments for the loan’s term, which is usually less than a year. Since these loans don’t last long enough to accumulate interest like other types of term loans, a flat fee is charged instead. This fee is usually a percentage of the amount borrowed.
Borrower Qualifications
Rapid Finance offers several differently-named products, but they’re all variations on the same short-term funding theme. Depending on where you live, the nature of your business, and how long you’ve been in business, certain products may not be available to you.
To qualify for funding from Rapid, you must meet these prerequisites:
| Time In Business: | 12 months (STL) 3 months (MCA) |
| Credit Score: | 500 |
| Revenue: | No specific minimum requirement; it depends on the amount borrowed |
Additionally, you must have a business bank account, with no more than six days in which you had insufficient funds. You also need to have deposits from at least five different sources each month.
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.
Terms & Fees
Here are the terms for Rapid’s products:
| Borrowing Amount: | $5,000-$1 million |
| Term Length: | 3-60 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 |
If you’re used to traditional lending, the “fixed 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 “fixed 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%, 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.
The rate offered to you 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. These are still short-term loans, but you may see some variation in rates, borrowing amounts, and term lengths.
A merchant cash advance has many of the same components as a short-term loan. The difference? It’s not technically a loan at all. The funder isn’t lending you money; it’s buying a percentage of your future card-based sales. The result looks a lot like a short-term loan, but it skirts many of the regulations that govern loans. That makes them both easier to qualify for and, usually, more expensive.
Each business day, Rapid will hold back a percentage of your daily credit and debit card sales until you’ve “paid back” the terms of your advance. Since your sales will likely vary day by day, there’s no hard and fast term length for MCAs. If your business is booming, you’ll pay them off quickly. If it’s not, it’ll take longer.
Like short-term loans, MCAs have fixed fees, meaning that instead of interest, you’ll be charged a percentage of the amount that you’re advanced.
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. These include:
- The last three statements from a business bank account
- A voided check from a business checking account
- Personal identification
- Proof of income
You may be asked for additional documents, depending on the product.
Rapid Finance 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 Finance’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. You won’t find much info about rates anywhere convenient, unfortunately.
The 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.
User Reviews
Rapid Finance’s user review footprint trends positive overall. The company has an A+ rating with the BBB and an unusually high number of positive reviews on the watchdog site. There are four customer complaints on record. User reviews on Trustpilot are also overwhelmingly positive; the company has a 4.9 out of 5 on that site. Professional reviews are a little more measured, but on the whole, Rapid’s reputation is pretty good.
Negative Reviews & Complaints
Rapid maintains a mostly positive reputation with its customers, but there are a handful of complaints:
- Difficulty Getting Approval: Some customers reported that the approval process dragged out longer than expected and ultimately didn’t end in approval despite reassurances from staff.
- Costly: As is common with short-term lenders as a whole, you can end up paying quite a bit of money each month.
- Customer Service: Some customers reported not being able to reach their representatives when they needed to.
Positive Reviews & Testimonials
Happy customers liked the following aspects of Rapid’s service:
- Comparatively Good Rates: A lot of customers found that Rapid’s rates were lower than those of many similar business funders.
- Easy Application Process: Most users appreciated that the application process was easy, quick, and painless.
- Customer Service: Many users were happy with the customer service they received.
Final Verdict
Rapid Finance offers fast money to high-risk businesses. While that does mean higher rates and shorter terms, Rapid Finance is among the better lenders in its niche. With a positive reputation and at least the potential for relatively low rates, it’s a good option for businesses with poor credit or that otherwise struggle to get the financing they need.
Are you looking for the best rates? Check out our alternative suggestions to ensure you’re making an informed decision.
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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Organization Name: Pool and patio inc
I have been using rapid advance for the past 3 years yonika is a true professional and application is easy and rapid approval same day I would highly recommend this company
This comment refers to an earlier version of this review and may be outdated.
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.