BFS Capital Small Business Loans Review

About BFS Capital

BFS Capital

BFS Capital is a leading provider of flexible financing solutions for small businesses. With more than 15 years of experience and nearly $2B in total financing, we provide fast and easy access to working capital. Our experienced funding advisors are standing by to help you address your unique business needs. Partner with a BBB, A+ rated industry leader and invest in your success today.


What is BFS Capital?

Florida-based BFS Capital has provided small businesses more than $1.75 billion in financing since its founding in 2002. The company offers small business loans and merchant cash advances ranging from $5,000 to $500,000. To date, it has provided financing to businesses in 400 industries in all 50 states and Canada, and in the United Kingdom through its affiliate Boost Capital.

In 2017, BFS Capital had its most active year on record with more than $300 million in originations. It also recently secured $175 million revolving credit line from funds managed by Ares Management to help finance more loans and cash advances.


Lender highlights

  • Low credit scores okay: Unlike traditional banks, BFS Capital funds businesses with owners who have less-than-perfect credit scores.
  • Lack of transparency: The BFS Capital website lacks information about its products, requiring potential borrowers to do extra legwork to find out the basics.
  • No early repayment benefit: Since the company uses a one-time buy rate instead of an interest rate, there is no benefit to paying your loan off early.
  • Daily repayment: Little flexibility is allowed in repayment, with a set amount automatically deducted from your account every day until funding and fees are repaid.

What BFS Capital offers?

BFS Capital offers both short-term loans and merchant cash advances, or MCAs, in amounts ranging from $5,000 to $500,000. Businesses in specific industries such as manufacturing, auto repair and restaurants can qualify for financing between $4,000 and $1 million. The company promises funding in as little as three days. Otherwise, there are no other details on rates, fees and term lengths on the company’s website.

When it comes to MCAs, BFS Capital provides businesses funds up front in exchange for receiving a certain percentage of the business’s future sales. MCAs are often available to those with poor or bad credit, but their rates and fees are typically much more expensive than business loans.


Eligibility requirements

BFS Capital funds companies in all 50 states and Canada. It supports borrowers in a wide range of industries, which are listed on the funder’s website.


How to apply for BFS Capital financing

BFS Capital encourages prospective borrowers to apply online. Its website offers an online chat feature and lists a customer service phone number for questions. Attempts to use the online chat for more information were not successful. No one responded to inquiries.

For loan approval, the company will review your recent business account statements and will base its decision on your monthly gross business volume. The company takes automated, fixed payments from your business bank account until the loan is paid back in full.

For merchant cash advances, the company reviews recent credit card sales statements and approves based on recent card sales and projected sales. Payments are based on a fixed percentage of sales and automated until the advance is paid back entirely.


Pros/cons

Pros Cons
  Fast approval process and access to funds   Not transparent; the website lacks information
  Borrowers will low credit scores okay   Unclear if fees are involved
  Minimal requirements for application   Automated repayment required

Who is the best fit?

Like other lenders that offer merchant cash advances and/or short-term loans with high fees, BFS Capital is best suited for companies who need fast access to cash or are unable to obtain business funding through traditional means.


Fine print

Lack of transparency. BFS Capital’s offers almost no information about the company’s products. This requires potential borrowers to first submit an application online just to get the basic information necessary for comparison shopping.

Cash advances can be risky. Merchant cash advances are typically more expensive than traditional loans and have fast repayment terms. In general, you pay the MCA provider a percentage of your daily credit card transactions, no matter your sales volume. This can eat into profits on slower business days where you don’t earn enough to cover other expenses. In some cases, business owners take out additional cash advances to cover the original advance. Generally, MCAs don’t offer any benefit for early repayment. Look at various financing options before taking on an MCA.

MCA pricing. BFS Capital does not outline how MCAs are priced, but typically cash advances don’t have interest rates like loans. Instead, the MCA price is based on a factor rate. This is how that works. Let’s say the factor rate is 1.35. If you want to figure out how much a $10,000 loan will cost you in total, multiply the borrowing amount by the factor rate. In this case, that would be $13,500. So, you pay an additional $3,500 on top of paying back the $10,000 you borrowed.


The bottom line: How BFS Capital stacks up

BFS Capital is an established operator, having funded hundreds of companies over 15 years. Its reputation appears solid, but its lack of transparency is an unnecessary impediment to easy and confident decision making.

Business owners in search of funding will need to spend extra time digging or asking questions to get the basic information about BFS Capital’s products. If they are offered a merchant cash advance, they likely will face high fees, daily repayment and lack of prepayment benefits. The provision of quick funds for companies with few other options may make this an acceptable deal to some borrowers.