- Low credit score requirements
- Multiple types of financing available
- Funds are disbursed quickly
- Website advertising is clear and informative
- Financing isn’t available in some states
- Some additional fees are charged
- Repayments are required frequently
SnapCap is an alternative lender dealing in short and medium-term unsecured loans.
While the usual warnings apply when dealing with alternative lenders, SnapCap does an admirable job of educating its prospective customers about what it offers and the pros and cons of taking a short-term cash flow loan. The company also offers daily and weekly payments, which lends a bit of flexibility.
Of course, you should always comparison shop before you lock yourself into any kind of alternative funding. Our short-term funding comparison chart can give you a sense of what’s out there.
Table of Contents
SnapCap offers the following:
You must meet these prerequisites to qualify for funding from SnapCap:
|Time In Business||12 months|
Your business must be based in the US. You’ll also need at least three months of bank statements for your application.
Remember that these are just minimum requirements. Though the minimum time in business is just one year, the average borrower has been in business for at least five years, according to SnapCap. Most applicants have credit scores of 650+, although the minimum to apply is 500. Finally, you only need to show revenue of $100,000/year, but the average borrower has revenue exceeding $300,000.
Terms & Fees
The terms for SnapCap’s loan products look something like this:
|Term Length||3-36 months|
|Factor Rate/Interest Rate||x1.05-x1.4|
|Origination Fee||Varies by product|
|Effective APR||Learn more|
|Collateral||Offers both secured and unsecured loans|
SnapCap offers a number of variations on the short-term loan as well as equipment loans and merchant cash advances. Depending on the type you apply for, that loan might be secured (in the case of an equipment loan) or unsecured. An unsecured loan doesn’t come with collateral in the traditional sense, but you may be asked to sign a personal guarantee.
Even though some of SnapCap’s term lengths can go longer than what is commonly considered a short-term loan, the loans still make use of short-term loan conventions. This means that, rather than charging an interest rate, SnapCap charges a one-time fixed fee, which is determined by using a multiplier called a factor rate.
Since the laws governing loans vary from state to state, SnapCap cannot offer loans to businesses in every state. It can, however, offer merchant cash advances. These products share some qualities with short-term loans (fixed fee, automated repayments), but they’re technically not loans. Instead, the funder will buy a percentage of your future daily credit/debit card sales income. So you’ll still be paying daily, but the amount won’t be fixed; it will be tied to your sales. This means that the better your sales are, the faster you’ll pay off your advance. Just be aware that merchant cash advances tend to come with higher fees than short-term loans.
Though SnapCap doesn’t exactly disclose its rates upfront, the company does offer a tool that can give you some ideas about what you’ll owe based on your credit rating and term length. It helps to compare SnapCap’s rates to those of a typical traditional bank and SBA loans. Interestingly, the tool will sometimes put SnapCap on the losing side of the comparison (usually where customers with good credit are concerned).
SnapCap offers a little more flexibility than most alternative lenders, with some loans qualifying for weekly rather than daily payments. Regardless, these payments will be withdrawn automatically from your business account through an automated clearinghouse. If you aren’t prepared for the frequent repayment schedule, it can cause problems, so make sure you know what you’re signing up for.
Another Option For Merchant Cash Advances:
SnapCap, as is the case for most alternative funders, uses a fast, streamlined process to approve loans. The primary considerations used are the amount of revenue your business generates, how long you’ve been in business, how much money you need, and your credit rating. If you submit during business hours, the lender will review your profile within hours. You should then expect to provide at least three months’ worth of corroborating bank statements. The lender performs a soft pull on your credit. If all goes smoothly, you can have your funds within 24-48 hours.
Sales & Advertising Transparency
SnapCap discloses most of the information you need to know on its site, though you’ll have to click around a bit to find it all. The only thing missing is a full breakdown of any fees you may be charged in addition to the basic fixed fee.
There are also some resources available on the site that define industry terms.
Customer Service & Technical Support
Clients generally appear to be satisfied with the customer service they received. Customer service can be reached by phone Monday through Friday or live chat on the SnapCap website. SnapCap also has a presence on LinkedIn, Facebook, Twitter, and YouTube.
Negative Reviews & Complaints
SnapCap has an A+ rating with the Better Business Bureau, with no complaints currently on record. There is one negative review on the watchdog site, however, and some scattered ones elsewhere. Here are some of the complaints:
- Application Difficulties: Some customers found the application process to be a bit more onerous than they expected.
- Customer Service: A few people found customer service to be unresponsive.
- Trouble Getting The Right Amount: Details aren’t clear, but a customer complained that they couldn’t initially get the amount they wanted. They were told to reapply in a few months.
Positive Reviews & Testimonials
SnapCap has mostly positive reviews and currently rates 4.8 out of 5 on Trustpilot. Clients like:
- Customer Service: Most clients were happy with the help they received.
- Speed: SnapCap was usually able to deliver funding within its advertised window.
- Transparency: Customers appreciated that SnapCap didn’t try to hide the costs and terms of its products.
I can’t stress enough the value of transparency when it comes to alternative lenders. It’s easy to promise fast funding and easy approval rates, but not every funder shows their full hand. In that regard, SnapCap is better than most of its competition. The funder’s rates aren’t that bad compared to most of the industry either, although businesses with abysmal credit may not make the cut or wind up with high fees.