Rapid Finance Review

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Pros

• Low factor rates
• Low origination fees

Cons

• Some additional fees
• Limited support materials

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 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.

Services Offered

Rapid Advance offers the following types of business funding:

• Merchant cash advances
• Short-term business loans

Borrower Qualifications

Rapid Finance offers a number of different named products, but they’re all variations on the same short-term funding theme. Depending on where you live and 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:

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:

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 you are offered 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, they’re buying a percentage of your future card-based sales. The end result looks a lot like a short-term loan, but it skirts many of the regulations that govern loans. This 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 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 you’re being 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, and identification. You may be asked for additional documents depending on the product.

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. You won’t find much info about rates anywhere convenient, unfortunately.

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. User reviews on TrustPilot are also overwhelmingly positive. 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 Rapid’s:

• 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

With the name change to Rapid Finance, this company is signaling their move away from merchant cash advances (which they still offer), toward emphasizing short-term loans along with products offered through their third party affiliates. Expect to see more of this as the alternative lending industry matures. Overall, Rapid’s good reputation and relatively reasonable rates make them a decent option for businesses that need funding from a non-traditional source.

Looking for the best rates? Check out our alternative suggestions to make sure you’re making an informed decision.

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