Kapitus Review
-
Expert Analyst & Reviewer
- 4 comments
- Updated on:
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Kapitus
| Total Rating | 4.0 |
|---|---|
| Terms & Fees | Good |
| Application Process | Good |
| Sales & Advertising Transparency | Poor |
| Customer Service | Good |
| User Reviews | Good |
Pros
- Relaxed credit score requirements
- Fast time to funding (48 hours)
- Broad range of products
Cons
- Opaque terms and fees
- High origination fees (on some products)
Kapitus Overview
Kapitus, formerly Strategic Funding Source, is a New York City-based small business funder. Like similar companies, it offers alternative financing to businesses with less-than-perfect credit, as well as those that need funding in a hurry. Compared to traditional banking, this type of funding is usually both faster and more expensive.
Unfortunately, Kapitus exemplifies a trait all too common in its industry: a nearly complete lack of transparency. Since online funding can easily cross the line into borderline usury, we caution our readers to do some serious comparison shopping before committing to a merchant cash advance or a short-term loan.
Table of Contents
Industries Served
Kapitus serves the following industries:
- Agriculture
- Contractors
- eCommerce
- Hotels
- Manufacturers
- Medical
- Restaurants
- Wholesalers
- Automotive
- Construction
- Transportation
- Towing
Services Offered
Kapitus offers the following:
- Short-term loans
- Medium-term loans
- Merchant cash advances
- Equipment financing
- Invoice factoring
This review will focus on the first two products.
Borrower Qualifications
Kapitus does not have explicit credit score requirements, but you’ll have to have been in business for a bit and be profitable:
| Time in business: | 6 months |
| Credit score: | N/A |
| Revenue: | $100,000 per year |
Terms & Fees
Kapitus won’t be winning any awards for transparency. Their website is almost devoid of definitive information, although you can get some ballpark figures from their representatives:
| Borrowing amount: | $10,000 – $750,000 |
| Term length: | 3 months – 5 years |
| Fixed fee/interest rate: | x1.15 – x1.3 (may be higher for high-risk clients) 5.99% – 18% APR (medium-term loans) |
| Origination fee: | The higher of 2.5% or $395 Up to 5% (medium-term loans) |
| Effective APR: | Learn more |
| Collateral: | Varies by contract |
Kapitus loans and MCAs both use fixed fee structures, though somewhat unusually, these products aren’t necessarily unsecured. Depending on the property you own and the type of product you choose, a lien may be placed on your property.
Your fixed rate is determined by a factor rate. To figure out while you’ll owe, simply multiply the amount you receive by the factor rate and add your origination fee. So if you borrow $10,000 at 1.2, you’ll owe $12,000 ($10,000 x 1.2 = $12,000), plus $395. Unlike many short-term funders, Strategic does offer incentives for paying off your loan or advance early.
Short-term loans and merchant cash advances differ slightly once you get beyond factors rates. Loans usually have fixed payments–typically daily for short-term loans–that are automatically withdrawn from your business account.
Merchant cash advances, on the other hand, hold back a percentage of your credit card sales each day until your loan is paid off completely. Because the amount you pay back is not consistent, MCAs don’t have strict term lengths—instead, you simply make payments until your advance is paid off.
Kapitus also offers somewhat more traditional funding in the form of medium-term loans. These have longer term lengths and charge interest. Depending on your agreement, payments may be made weekly, bi-weekly, or monthly. Expect to pay a higher origination fee for this product, however.
Of particular note to healthcare businesses: Kapitus offers Helix Healthcare Financing, which has repayment terms ranging from six months to 10 years. Payments may be made daily, weekly, or monthly.
Application Process
You can begin the application process online. Kapitus takes a bit more information upfront online than many alternative lenders; it’s a legitimate application, not just a screening tool. They ask for:
- Contact info
- Type of business
- How long you’ve been in business
- Approximate credit score
- Whether you have loans from another lender
- Gross annual sales
- The amount you’re requesting and what you plan to use it for
- Owner info
After you submit, if you’re approved representative will contact you, go over your application with you, and present you with your options. You’ll want to have three months worth of bank statements to prove you can make your payments. Many borrowers have said they received funding within a few days. Kapitus will do a soft pull on your credit.
Sales & Advertising Transparency
Kapitus’s website is sleek and shiny, but it doesn’t give you much to work with. It serves primarily as an advertising platform rather than an informative one. Obviously, Kapitus is in the business of making money, but it would be nice to not have to go through the entire application process before getting tangible, useful information.
Customer Service & Technical Support
Customers seem generally satisfied with the care they got from Kapitus’s representatives. You can reach them through their website chat client, by email, by phone, or through Facebook, Twitter, Instagram, LinkedIn, and YouTube.
User Reviews
As is usually the case for funders, customer reviews trend toward the margins; people either loved or hated the experience. Overall, Kapitus’s reputation seems pretty decent. The company retains an A+ with the BBB, though they aren’t accredited with the watchdog org. There are only four user reviews on the site, with the company receiving an aggregate of 2 out of 5 stars. Trustpilot has 196 user reviews of the company, with an average of 8.6/10 rating.
Negative Reviews & Complaints
Criticisms of Kapitus include:
- Moving goalposts: Some customers complained that the terms of their funding and application process changed, or that Kapitus failed to meet its promises.
- Customer service: While most customers seemed satisfied with the service they received, a few described unpleasant experiences that included harassing phone calls, including aggressive cold calls.
- Expensive: You’re going to pay more for the fast funding you receive from Kapitus than you would from a traditional bank.
Positive Reviews & Testimonials
Customers like that Kapitus is:
- Customer service-oriented: While not a universal experience, most customers were satisfied with the service they received from Kapitus personnel. The company does appear to take great pains to interact with customers online.
- Fast: Many customers got their funding within 2-3 days.
- Easy to qualify: Bad credit won’t disqualify your application.
Final Verdict
They’ve rebranded to a more distinct name and overhauled their marketing, but Kapitus is still essentially Strategic Funding Source. They’re of one of the more comprehensive alternative lenders out there right now, but they still remain a somewhat difficult nut to crack in terms of transparency. There’s a bit more flexibility here with regard to term lengths (especially for healthcare businesses) and the ability to borrow fairly large amounts can be helpful to larger businesses. It’s unlikely to be the best option for businesses with strong credit, but those without could probably do a lot worse.
Check out our list of merchant cash advances and small business loans for alternatives.
Chris Motola
Expert Analyst & Reviewer at Merchant Maverick
An expert in personal and business loans and financial health, Chris Motola has been writing about small business finance and payments for over 5 years. He has been cited in various industry publications, including Forbes Advisor, GoBankingRates, and Medium. Chris is a graduate of the University of Central Florida.
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Organization Name: Mateos Hacienda LLC
Very poor contract changed, focusing was in two grey boxes not on 30 page contract that deal fell through My company if proper loan came in could of paid of in matter of months last year restaurants revenue was $0 and they are taking $100 dollars a day from a 600 square foot restaurant in the last copy of loan Mateos Hacienda LLC is as such to protect mypersonal
assets ( my home) my vehicle somewhere in the 30 pages which I never signed a contract like that. In my 13 years of owning a business my focusing paperwork was always on the loan or document itself not in two grey moveable blocks that can be added to any document!
Organization Name: STRIPES GLOBAL INC.
They are very expensive; equal to 47% APR. They advertise much better rates to get you hooked. Once they pull your credit it shows other companies you are looking for funds and hurts your chances of being funded. Also they increase their fees to remove your lean from $150 to $250 This increase happened in less than a year. They charge you this fee even know your loan is paid off and your account is closed. Please look elsewhere for funds.
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Pro Maid
So I got a loan which is fine. They tell me they will wave the fee and they still charge me. They stole from me! I wouldn’t do business with this company they will find ways to steal from you. That is how they make $
This comment refers to an earlier version of this review and may be outdated.
Excellent and informative review. I just received an email from this company offering a 4.39% loan rate up to $250K. I am glad I read your article as this is clearly deceptive advertising for this company.
“That means that for every $1 you borrow, you’ll be paying back between $1.10 to $1.50” = brutally expensive money.
This comment refers to an earlier version of this review and may be outdated.