Fora Financial review
 | Estimated factor rate: 1.10 to 1.40 Best for: Recently established businesses with a limited or bad credit history looking for quick funding |
Pros and cons of Fora Financial
| Pros | Cons |
|---|---|
Ideal for low-credit borrowers Quick funding times Flexible borrower requirements Potential early payoff discount No collateral required Doesn’t run a hard credit check | Only two funding options Expensive origination fee Factor rate makes it hard to compare loan costs Doesn’t help build business credit |
Fora Financial small business loans review
Established in 2008, Fora Financial is an online lender that directly approves and funds two small business lending options: short-term business loans and revenue advances. Both products can provide up to $1,500,000 for working capital purposes, with terms ranging from 4 to 18 months.
Approvals can take around four hours, with funds available within 12 to 72 hours after that. Plus, you can get a discount if you pay off your loan early. However, Fora Financial charges a factor rate, making it hard to compare against other lenders that advertise interest rates and annual percentage rates.
Note that Fora Financial may refer applicants to third-party partners, which might offer additional types of small business financing. In this case, Fora Financial acts like a business loan broker, ensuring the partner lender has all relevant info to process your application. However, your interest rate, term length and loan amount are determined by the partner lender, who will service your account and collect payments. If the account is eligible for renewal, Fora Financial can help facilitate a new loan on your behalf.
Who is Fora Financial for?
- Business owners with limited credit. Fora Financial accepts credit scores as low as 570, making it a great choice for businesses needing a bad credit business loan.
- Early-stage startups. While many lenders require your business to operate for several years before you’re eligible for funding, Fora Financial only requires a six-month business history. Because of this, Fora Financial is one of our top picks for best startup business loans.
- Companies needing quick access to funds. You can receive a lending decision in around four hours, with funds hitting your business bank account 12 to 72 hours after approval.
Fora Financial small business financing at a glance
| Product | Loan amounts | Repayment term | Estimated factor rate | Fees |
|---|---|---|---|---|
| Term loan | $5,000 to $1,500,000 | 4 to 18 months | 1.10 to 1.40 | Origination fee: the higher of $300 or 3.00% of loan amountWire transfer fee: Amount unspecified |
| Revenue advance | $5,000 to $1,500,000 | Varies based on sales volume | 1.10 to 1.40 | Origination fee: the higher of $300 or 3.00% of loan amountWire transfer fee: Amount unspecified |
Term loans
You can borrow up to $1,500,000 with a short-term business loan from Fora Financial, with repayment terms ranging from 4 to 18 months. Funds can be used for practically any type of startup business costs or ongoing expenses, such as inventory, supplies, payroll, marketing, equipment and more. However, you can’t use your Fora Financial business loan to buy another business.
Be aware that Fora Financial charges a factor rate instead of a traditional business loan interest rate, making it hard to compare the total loan cost with other financing options. It’s worth converting the factor rate in advance to see how much a Fora Financial term loan could cost you.
For example, if you borrow $20,000 for a 12-month term with a 1.3 factor rate, your converted interest rate would be 30%. In comparison, traditional bank loans have interest rates starting as low as 6.25%.
Revenue advance
Fora Financial’s revenue advance is similar to a merchant cash advance, which gives you a cash advance based on your daily debit or credit card sales. The key difference is that payments for a revenue advance are based on your total sales volume and deducted from your business checking account.
The revenue advance’s funding limits, repayment terms and factor rate are basically identical to its small business term loan, but with weekly or even daily payments instead of predetermined, fixed monthly payments. This gives small business owners more flexibility in scaling payments to match their sales, which can help during times of seasonal dips in income. However, a revenue advance could be a strain on your business budget since you won’t be able to predict how much you’ll owe each week.
Fora Financial borrower requirements
| Minimum annual revenue | $240,000 |
| Minimum time in business | 6 months |
| Minimum credit score | 570 |
Fora Financial has relatively lax business loan requirements compared to the other lenders. You’ll need a minimum personal credit score of at least 570. Recently established businesses can still qualify as long as you’ve been in operation for at least six months and generate a monthly income of at least $20,000.
You may be able to borrow between 75% to 125% of your monthly gross sales amount, depending on your business’s qualifications.
Required documents
If you feel ready to apply for a business loan with Fora Financial, you’ll likely need to provide the following documents:
- Three most recent business bank account statements
- Your latest business tax return
- A current profit and loss (P&L) statement and/or a balance sheet
While not specifically required, having a detailed business plan on hand could help show how you plan to use the funds.
Alternatives to Fora Financial
| Fora Financial | PayPal | Finance Factory | |
|---|---|---|---|
| Minimum credit score | 570 | No credit check for working capital loans, not disclosed for term loans | 620 to 720, depending on funding type |
| Loan products offered |
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| Time to funding | 12 to 72 hours |
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| Starting rates | 1.10 factor rate | Not disclosed |
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| Maximum loan size | $1,500,000 | $250,000 | $5,000,000 |
| Minimum annual revenue | $240,000 |
| Business income isn’t required; must have $100,000 or more in annual personal income |
Fora Financial vs. PayPal Working Capital
If you have a PayPal Business or Premier account that you use for your business payment processing needs, you can consider the PayPal Working Capital loan to help tackle short-term projects and everyday business expenses. As with Fora Financial’s revenue advance loan, PayPal scales your repayment amount based on your incoming sales volume until your debt is repaid.
Since PayPal has a direct link to your income stream, you’ll be able to access funds faster than just about any other lender — with funds available in just minutes. Loan amounts only go up to $250,000 — and only $150,000 if this is your first time taking out a loan with PayPal — which is a far cry from Fora Financial’s $1,500,000. Yet, PayPal could be a good option if your business doesn’t meet Fora Financial’s high minimum annual revenue requirement of $240,000. With PayPal, your business only needs to generate $15,000 to $20,000 per year, based on your PayPal account type. The best part: There’s no credit check for PayPal’s working capital loan.
If you’re looking for a loan with fixed weekly payments, PayPal also offers a term loan with amounts up to $150,000, though your business needs to be at least nine months old to qualify.
Note that PayPal business loans aren’t available in several states and territories. In addition, you must be a regular PayPal business user to qualify, and may not be able to switch payment processors until you pay off your loan in full.
Fora Financial vs. Finance Factory
One major downside to Fora Financial is that it only offers two lending products. If you’re hoping to build a long-term borrowing relationship, you might be better off with a lender that offers a wider selection of financing options. Living up to its name, Finance Factory is an online marketplace helping connect business owners with partner lenders. Its finance options include startup business financing, business credit cards, franchise loans, commercial real estate loans and more.
While using a marketplace can help save time, allowing you to review multiple options at once, it doesn’t always provide the most competitive rates and terms. In fact, some of the small business loan options with Finance Factory come with high fees and prepayment penalties.
That said, Finance Factory could be a good choice for businesses needing access to high funding amounts, with some loans going as high as $5,000,000. Small business lenders typically require your business to operate for at least six to 12 months, whereas Finance Factory has no minimum business history requirement. Additionally, you don’t need business revenue to qualify, although you do need at least $100,000 in annual personal income. However, if you have a spotty credit history, you might have better luck qualifying with Fora Financial since Finance Factory typically requires a minimum credit score of 620 to 720.