Fora Financial Business Loan Review
Janet Schaaf is a freelance writer, editor and proofreader who considers reader advocacy to be her calling. After taking a few roads less traveled, Janet completed a bachelor’s degree in English Literature from the University of Missouri-Kansas City, with English Department Honors. She has been correcting grammar and checking facts since she could string a sentence together. For the past three years, Janet has focused on making personal finance topics understandable and relatable. Loan terms and credit card agreements can look overwhelming, but understanding what you’re agreeing to is paramount in grasping the impact debt can have on your life.
 | Estimated factor rate: 1.10 – 1.40 Best for: Business owners with bad or limited credit history looking for short-term funding. |
Pros and cons of Fora Financial
| Pros | Cons |
|---|---|
Low factor rates Quick funding times Flexible borrower requirements Potential early payoff discount | Only two funding options Expensive origination fee Hard to compare loan costs Doesn’t report to credit bureaus |
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Fora Financial small business loans review
Fora Financial is a New York-based lender that’s been around since 2008. Unlike some “lenders” that are really just business loan brokers or referral companies, Fora Financial is a direct underwriter for some of its financing, meaning that it’s the group that will underwrite and fund your loan. Currently, Fora Financial only offers two small business lending options: a short-term small business loan and a revenue advance. These are both essentially the same product, only really differing in the way you repay the financing.
Who is Fora Financial for?
- You have limited credit. Traditionally a big barrier for some small business owners, you’ll only need a 500 credit score in order to qualify for funding. Fora Financial ranks on our list of best bad credit business loans.
- You have limited business history. Many lenders require your doors to be open for several years before you’re eligible for funding. Fora Financial only requires six months. Fora Financial is also one of our top picks for best startup business loans.
- You’re looking for quick funding. The total timeline from application to when you’ll see funds in your account (if approved) is two to four days.
Fora Financial small business financing at a glance
| Product | Loan amounts | Repayment term | Estimated APR range | Fees |
|---|---|---|---|---|
| Small business loan | $5,000-$1,500,000 | 4-15 months | 1.10-1.40 factor rate | Origination fee, whichever is higher: $300 or 2.50% of loan amount. Wire transfer fee, amount unspecified. |
| Revenue advance | $5,000-$1,500,000 | Varies based on sales volume | 1.10-1.40 factor rate | Origination fee, whichever is higher: $300 or 2.50% of loan amount Wire transfer fee, amount unspecified. |
Small business loans
You may be able to borrow between 75% to 125% of your monthly gross sales amount, depending on your business’s qualifications. One big downside is that Fora Financial charges a factor rate for this loan rather than a business loan interest rate, making it hard to compare the actual loan cost with other, more traditional short-term business loans. This option is better for small business owners with a consistent revenue stream because you know exactly when your term length will end.
Revenue advance
Fora Financial’s revenue advance is basically the same thing as its small business loan, but with a twist on repayment. Instead of regular pre-scheduled payments, you’ll make weekly or even daily payments based on a percentage of your business’s current sales. That gives small business owners with a fluctuating or seasonal income stream more flexibility in scaling payments to match their sales, but it does mean that you don’t have a defined end date for your repayment. It’s similar to a merchant cash advance although it uses your total sales volume, not just your credit card sales for the day.
Fora Financial borrower requirements
Fora Financial has relatively lax business loan requirements compared to the other lenders. You’ll need a minimum credit score of at least 500, which most Americans have. Newer businesses can still qualify, as long as you’ve been in operation for a little while and have a minimum monthly income of $15,000.
| Minimum annual revenue | $180,000 |
| Minimum time in business | Six months |
| Minimum credit score | 500 |
Required documents
To get a business loan with Fora Financial, you’ll need at least the last three statements for your business bank account to show proof that you meet the loan requirements. In some cases, you’ll need to provide extra documents such as your latest business tax return, a current profit and loss (P&L) statement and/or a balance sheet.
Alternatives to Fora Financial
| Fora Financial | PayPal Working Capital | Finance Factory | |
|---|---|---|---|
| Minimum credit score | 500 | N/A - no credit check | 550-600, depending on funding type |
| Loan products offered |
| Working capital loan |
|
| Time to funding | 2 to 4 days | A few minutes | 2 to 45 days, depending on funding type |
| Starting APR | Factor rate: 1.10 | Not disclosed | 6.00% |
| Maximum loan size | $1,500,000 | $250,000 | $5,000,000 |
| Minimum annual revenue | $180,000 | $15,000-$20,000, depending on your PayPal account type | None |
Fora Financial vs. PayPal Working Capital
If you have a PayPal Business or Premier account that you use for most of your business payment processing needs and you’re looking for a short-term, flexible loan, the PayPal Working Capital loan is worth looking into. As with Fora Financial’s revenue advance loan, PayPal scales your repayment amount based on your incoming sales volume until your loan is paid off. Since PayPal has a direct link into your funding stream, you’ll be able to access funds faster than with just about any other lender, but make sure to consider other options, too.
Fora Financial vs. Finance Factory
One of Fora Financial’s main limitations is how many products it offers. If you’re hoping to build a long-term borrowing relationship, it behooves you to choose a lender that offers a wider range of financing options, and that’s where the aptly named Finance Factory pulls ahead. It does this by facilitating financing between you and one of its partner lenders, who provides the actual sources for your funds.