Yellowstone Capital Review
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- Date Established
- Jersey City, NJ
Note: Yellowstone Capital is no longer originating new cash advances. Take a look at our filterable business loan reviews to learn about other funding options that might work for your small business.
- Relaxed credit requirements
- Funding in as little as 24 hours
- High factor rates
- Opaque terms and fees
- Poor public reputation
Yellowstone Capital Overview
Yellowstone Capital is a New Jersey-based company that provides non-collateralized funding to small businesses through their ISO (Independent Sales Organizations) partners. Like similar funders, Yellowstone caters primarily to stable businesses with poor credit history that are in need of immediate, short-term funding.
If this is your first time looking at this type of funding, there are a number of quirks you should be prepared for, which we’ve laid out below. In general, you should be prepared to pay a premium for the funds you receive and to pay back a portion of what you owe daily. The conditions are steep enough that we like to encourage readers to look at our short-term funding comparison chart before committing to a merchant cash advance (MCA).
Yellowstone is willing to take most comers and prides itself on creative, non-traditional lending solutions, which may be welcome news for businesses that have trouble finding working capital. However, cautionary tales about things that look too good to be true apply here. Yes, Yellowstone can probably help you, but there’s a price for this kind of financing. If you don’t have to pay it due to bad credit or emergency circumstances, go with another lender.
Table of Contents
Yellowstone Capital provides the following types of business funding:
- Merchant cash advances (MCA)
Yellowstone Capital doesn’t have strict borrower qualifications, meaning they can potentially function as a funder of last resort for businesses that may have trouble qualifying for other sources of capital. Yellowstone does not enforce a restricted industries list. They also are willing to work with businesses that have already taken on debt.
Nevertheless, you can safely expect better terms the less risky your business looks on paper. That takes into consideration things like how long you’ve been in business, your credit rating, and your revenue.
Terms & Fees
Here are the terms for Yellowstone’s MCAs:
|Borrowing Amount:|| |
x1.4 - x1.6
Personal guarantee, confession of judgment
Variable (usually 2-8 months)
Rate unknown, but origination fees are charged
Getting information out of Yellowstone is pretty challenging, not only because of the aforementioned website, but because you’re not guaranteed to be able to reach anyone on the phone.
Here are a few useful tidbits of general information, however…
An MCA differs from traditional loans in some important ways. Rather than charging an interest rate, MCAs have you pay back a flat amount equal to the amount valued times a factor rate. So if you borrow $10,000 from Yellowstone, you’ll be responsible for paying back between $14,000 and $16,000, plus any origination fees.
Since an MCA is actually not a loan but a sale of a percentage of your sales, the way you “pay it back” is a little different. Traditionally, this entails the MCA provider holding back a percentage of your daily credit and debit card sales until you’ve settled the debt. Some funders structure their MCAs more like short-term loans, however, and make a daily debit withdrawal via an automated clearing house (ACH) from your business account.
MCAs are unsecured, meaning no specific collateral is necessary. However, you will be asked to sign a confession of judgment, which should not be taken lightly. Essentially, signing a COJ waives your rights to contest any claims the funder may make against you in court should you default.
You can start your application online or over the phone. Yellowstone will then attempt to work out a deal with one of their ISO funding partners to design an offer that fits your business profile. In addition to filling out the application, you’ll have to provide proof of income (bank statements), as well as personal identification and proof that you own your business.
If you’re approved, which can happen within as little as 24 hours, you’ll also need to provide a voided check to set up automated payments.
Sales & Advertising Transparency
Yellowstone’s website gives some general information about their product, as well as how they go about securing funding and their application process. You won’t find much about specific terms and fees. This isn’t unusual for an MCA funder, but it’s still annoying considering the company will ask you to sign a confession of judgment.
Customer Service & Technical Support
In the past, it was difficult to reach a Yellowstone representative, but it seems there’s been some improvement on that end.
User reviews of Yellowstone’s customer service tend to be negative, with many users reporting that it takes anywhere from days to weeks to get a human being on the line. Even many of the positive reviews mentioned problems with the company’s phone system.
Negative Reviews & Complaints
Yellowstone is currently unrated with the BBB, though the company had, in the recent past, been rated as low as an F. Complaints run the gamut from sales issues to problems with the product to billing and collections. There are currently 28 complaints on file, with a number of them from as recently as 2018. Here are some of the complaints:
- Unauthorized Credit Pulls: A few customers complained about hard pulls on their credit that they didn’t authorize.
- Billing Issues: One of the last things you want to deal with when it comes to debt are billing problems. Several customers reported being billed after their advance was paid off.
- Unclear Terms: Many customers were surprised to find out how much they owed or the rate at which they were being debited.
Positive Reviews & Testimonials
While customer reviews paint a pretty negative picture of Yellowstone, reviews weren’t entirely bad:
- They’ll Work With Almost Anyone: Users appreciated that Yellowstone worked with them despite their poor credit.
- Friendly Staff: Despite the complaints above, several customers praised the professionalism of Yellowstone’s staff.
- Fast Approval: Users were generally pleased by the speed with which they received their funds.
How do you rate a company like Yellowstone, that prides itself on its “creative,” fast-and-loose underwriting process? The company is willing to take on risks even most other alternative lenders would shy away from, but they’re able to do so by charging shockingly high rates and using draconian tactics like confessions of judgment.
MCAs already tread a thin line between usury and niche funding. You can debate whether or not it’s fair, but ultimately these companies have to overcome a certain amount of healthy skepticism from their prospective customers. They can do this with a combination of transparency and consistent customer service. Unfortunately, Yellowstone fails on both these accounts, whether by accident or design. I’d recommend looking elsewhere unless you’re completely out of options.
We've done in-depth research on each and confidently recommend them.
We've done in-depth research on each and confidently recommend them.