Snap Advances Review
- No credit score requirements
- Easy application process
- Poor public reputation
- High factor rates
Snap Advances Overview
Snap Advances LLC provides merchant cash advances (MCAs) to small businesses seeking short-term funding. Although officially headquartered in Salt Lake City, UT, the company also has an office in Valley Stream, NY.
MCAs tend to operate in a sort of gray area and—though legitimate and legal—should be approached with caution. Before diving into the world of MCAs, we first encourage you to take a look at our short-term funding comparison chart and make sure you don’t qualify for more traditional sources of capital.
If it ends up that MCAs are something you’d like to try, I’d still be wary of Snap Advances. My impression in dealing with them is that the company is understaffed (at best) and numerous customers have reported some seriously negative experiences.
Table of Contents
Snap Advances offers the following types of business funding:
Like most MCAs, Snap Advances offers fast and expensive short-term funding. Businesses with poor credit ratings can still qualify; MCAs are usually more concerned with the amount of money you’re making in revenue. Snap Advances is more likely to fund you if your sales are stable than if your credit is good.
To qualify for funding from Snap, you must meet these prerequisites:
|Time in business:||12 months|
|Revenue:||$15,000 per month|
Terms & Fees
Snap Advance’s website, like that of most MCAs, is fairly lean on details, although the FAQs may answer a few of your questions. Below, you’ll find the range of offers you can probably expect from Snap:
|Borrowing amount:||$5,000 – $250,000|
|Term length:||4 – 14 months|
|Fixed fee:||x1.2 – x1.5|
|Effective APR:||Learn more|
You’ll notice that MCAs don’t have an interest rate. Instead, you’ll be paying off the amount you borrowed times a multiplier referred to as a “factor rate.” So if you’re borrowing $10,000, at Snap’s lowest factor rate you’ll be paying back $12,000 ($10,000 x 1.2 = $12,000). You can expect to pay back between $1.20 and $1.50 for each dollar you borrow, not including origination fees.
Factor rates are generally assessed using your credit rating, so while it may not disqualify you, it’s still important.
MCAs traditionally require that your business does a minimum amount of monthly sales via credit/debit card, though some advances can resemble short-term loans if state laws allow. For the more traditional MCAs, a percentage of your daily credit card sales will be the subject of a “hold-back,” meaning they’ll go to the funder until the advance is paid off.
Ready to be a little more confused? Expressed in terms of APR, MCAs have a wildly variable rate. Effectively, the more money you borrow and the shorter the term length, the higher your APR will be. Borrowing the maximum amount and paying it off in four months, depending on your factor rate, could push your APR into the triple digits.
Processing time is on the short list of clear advantages MCAs have over traditional lending. We’re talking a matter of days and hours for application and funding versus months and weeks.
You can begin the process online, but you’ll probably need to speak to a human to complete your application. I’d normally say you can skip the online application entirely, but since sales personnel aren’t always reachable by phone, you should probably take the time to fill it out.
You’ll want to have three months worth of business bank statements available to prove your income is what you say it is.
Snap estimates that you’ll have your money within three to five days.
Sales & Advertising Transparency
Generally, you aren’t going to be seeing a lot of concrete information on MCA sites. Snap’s website falls somewhere near the median for MCA digital disclosure. You can glean at least a few useful tidbits from Snap’s FAQ.
Unfortunately, it’s not that easy to get information by talking to the company, as you’ll have to navigate through an automated menu that seems to transfer you to a random person who probably isn’t in the department you’re hoping to reach.
I’m not sure whether to attribute this to secrecy so much as staffing structure but, regardless, it’s tough to get the answers you’re looking for.
Customer Service & Technical Support
As I mentioned above, it’s not always easy to get hold of the right person. Snap apparently prefers to take your information and get back to you. Collections, however, appears to be reachable most of the time.
There aren’t too many customer reviews of Snap online, so I can’t say whether my experience was typical or not.
Negative Reviews & Complaints
Snap Advances has an alarming C rating from the BBB, with customer complaints in both billing/collections and products/services categories. It’s worth noting that this rating actually represents an improvement, up from an earlier D- rating. There are three recent complaints on records. Critics complained about:
- Problems Discontinuing Collections: A customer complained that their account was debited even after the terms of the advance were completed. Another complaint was from an individual claiming Snap was trying to collect money owed by a parent’s business.
- Costly: Not unique to Snap, but MCAs are a costly way to fund your business.
- Customer Service: It’s hard to reach the parties you want to reach when you need to reach them.
Positive Reviews & Testimonials
Most of the positive traits of Snap Advances are common to all MCAs:
- Poor Credit Okay: The credit prerequisites for MCAs are low, making it easy to qualify if you run a profitable business.
- Easy Application Process: You can get the process started by filling out a small web form. If all goes well, the process will be complete within a week.
- No Collateral: You don’t have to put anything up to get funding.
When it comes to taking on debt, you don’t want to take unnecessary risks. MCAs, in particular, feature potentially devastating interest rates. With that in mind, if you do decide to take on this kind of debt, you want to make sure you’re dealing with a stable, reliable funder that won’t add unnecessary complications to the process. Given the number of negative experiences customers have logged, Snap doesn’t appear to meet those criteria. Until Snap works the bugs out of its system, you’d probably be better off looking elsewhere.
While it can be hard to find funding at a good rate, I’d still encourage you to make sure you don’t qualify for more frugal alternatives. Our alternative suggestions page can point you in the right direction.