Rapid Finance Review for 2021

Overview

Rapid Finance, formerly Rapid Advance, is an alternative lender that provides three tiers of short-term business loans to small businesses. Their merchant cash advance (MCA), Standard Loan, Select Loan, and Preferred Loan each provide varying loan amounts, term lengths, and factor fees to a wide range of small business owners.

Pros and Cons

Green checkmarkPros
  • Potentially receive same-day funding
  • Rapid Finance can take a second position to traditional lenders (like banks)
  • Sign your loan agreement electronically via their self-service portal
  • Higher approval rate than other direct lenders
  • No collateral required
Red X markCons
  • Hard credit pulls may affect your credit history
  • Rapid Finance will not take a second position to lenders they consider as direct competitors
  • Some products require four years in business
  • Daily or weekly repayments can potentially strain your business’s cash flow

Rapid Finance Business Loans

With Rapid Finance, you can apply for merchant cash advances and various loan types to secure the funding you need for your business. Let’s break down the features, terms and Rapid Finance interest rates you can expect for each product.

Rapid Finance Merchant Cash Advance

Merchant cash advances are ideal when you need capital easily and quickly. In return, the lender collects a portion of the business’s future revenue receivables.

  • Maximum loan amount

    $5,000 – $500,000

  • Loan term

    3 – 12 months

  • Interest rate

    Starting at 1.22

Qualifications for Rapid Finance Merchant Cash Advance

  • Annual revenue

    $5,000

  • Personal credit score

    550

  • Time in business

    3 months

Rapid Finance Short-Term Standard Loan

If you’re seeking a standard loan that you can use toward various business expenses, then a short-term standard loan is worth considering.

  • Maximum loan amount

    $5,000 – $1,000,000

  • Loan term

    4 months – 1 year

  • Interest rate

    1.16 – 1.30 factor rate

Qualifications for Rapid Finance Short-Term Standard Loan

  • Annual revenue

    $120,000

  • Personal credit score

    550

  • Time in business

    2 years

Rapid Finance Short-Term Select Loan

The short-term select loan is comparable to the standard loan mentioned above, with some slight differences.

  • Maximum loan amount

    $15,000 – $1,000,000

  • Loan term

    6 – 15 months

  • Interest rate

    1.12 – 1.31 factor rate

Qualifications for Rapid Finance Short-Term Select Loan

  • Annual revenue

    $120,000

  • Personal credit score

    550

  • Time in business

    2 years

Rapid Finance Short-Term Preferred Loan

Short-term preferred loans potentially have the longest repayment term with competitive interest rates. Although, this funding option will require a longer business history.

  • Maximum loan amount

    $15,000 – $500,000

  • Loan term

    9 – 18 months

  • Interest rate

    1.11 – 1.25 factor rate

Qualifications for Rapid Finance Short-Term Preferred Loan

  • Annual revenue

    $120,000

  • Personal credit score

    550

  • Time in business

    4 years

Rapid Finance Borrower Eligibility

Alongside the qualifications specified above, some of the financing products may require you to meet additional eligibility criteria:

Location and Business Entity

Rapid Finance does not work with businesses with the following specifications:

  • Based in New Jersey, Rhode Island, Montana, Vermont, South Dakota, or Nevada
  • Sole proprietorships in Pennsylvania or Oklahoma

Financial History

  • Rapid Finance can work with businesses that operate entirely out of a home address that fits certain equity and employment criteria.
  • Rapid Finance typically requires borrowers to own 50% of their business to qualify. Still, there is no minimum if an owner at least signs on the loan agreement and provides a personal guarantee.
  • Rapid Finance cannot work with business owners who have personal liens of over $150,000.
  • Rapid Finance requires a minimum of three active trade lines open for more than two years.
  • Rapid Finance will not fund your businesses with more than six NSF days in the last two months.
  • Rapid Finance requires you have a business bank account (unless your business is a sole proprietorship) with deposits from at least five different sources monthly.

What You Need to Apply

  • Business tax ID (EIN)
  • Three months of business bank statements (or credit card statements if you’re applying for a merchant cash advance) for loans under $150,000
  • A voided business check or bank letter
  • A copy of your driver’s license
  • Your most recent business tax return (for loans over $150,000)
  • Your profit and loss statement (for loans over $150,000)
  • Your balance sheet (for loans over $150,000)
  • May ask for ownership verification
  • Business bank account number and routing number for deposit (for merchant cash advance)
  • Last three credit card processing statements (for merchant cash advance)

Note that you may submit some of your documentation through Rapid Finance’s self-service portal. You can also connect your business bank account to import your bank or credit card statements automatically.

How to Get a Loan With Rapid Finance

The following sections will cover the steps necessary in securing financing through Rapid Finance.

Application and Underwriting Process

After you’ve signed an application and submitted your bank statements, Rapid Finance will do a soft credit pull and send you an initial offer. This offer factors your business’s cash flow and lists which Rapid Finance products you qualify for. Rapid Finance uses a scoring model-driven algorithm for this first step of the process. 

If you accept your initial offer, you’ll proceed to Rapid Finance underwriting, during which Rapid Finance will learn more about your company, including its annual revenue and outstanding debt. Rapid Finance may require an interview with you before making their decision, so be prepared to answer questions about your business and why you’re seeking financing solutions. This process will include a hard credit pull for your credit history. 

For some applicants, Rapid Finance will also consider multiple factors, including:

  • Whether you run your business from a home address
  • Your business industry
  • Whether your business is profitable
  • Rapid Finance can take a second position to traditional lenders (like banks), but they won’t take a second position to an alternative lender that they consider a direct Rapid Finance competitor.

Post-Funding Process

If there are no unusual circumstances, you can expect to receive an initial offer within six hours —and the agreed-upon funds in your account within two days.  

For smaller loan amounts, Rapid Finance says they can produce an offer for qualified candidates within minutes (Rapid Finance uses an automated model for smaller loans). In fact, Rapid Finance says 50% of its clients receive same-day funding, while certain loans can be funded in under 10 minutes. Rapid Finance can fund an application on the same day or a maximum of seven days. On average, they fund in two days.

Please note that Rapid Finance also files a UCC-1 lien on borrowers after they have been funded with one of their small business loan products.

If Rapid Finance denies your application because of your credit score, you can reapply after six months, but if they reject your application for a reason other than your credit score, you can reapply within 30 days.

Repayment Process

With Rapid Finance, you will receive a schedule of your daily or weekly repayment amounts. This payment schedule will provide you with information about their prepayment discount—where they can only offer you a discount fee on the remaining amount instead of forgiving interest. You can view your repayment progress and statements through the customer portal.

Rapid Finance will automatically debit your first payment on the same day or a week after they fund your application. Your payments will then be deducted from your monthly sales. Rapid Finance won’t report your repayment activity to business credit bureaus or personal credit bureaus. 

Certain business owners might qualify for an “add-on” to their Rapid Finance product if their business’s revenues remain strong or get stronger as they repay their Rapid Finance debt. You’ll only qualify for an add-on after 45 days of using the initial loan, but you’ll be eligible for renewal when you pay down 50% of your current loan.

You can apply for a renewal directly from the self-service portal.

Moreover, every Rapid Finance client gets a personal business advisor that can help them determine what type of funding they should pursue and what they should do once they are funded. You may contact a business advisor via phone or live chat during regular business hours.

Rapid Finance Customer Service

Email and telephone support are available for Rapid Finance customers weekdays from 9:00 a.m. to 6:00 p.m. EST. You can contact a customer representative by using any of the following contact methods:

Alternatively, you may email Rapid Finance by completing their online contact form.

Rapid Finance Customer Reviews

What are online reviewers saying about Rapid Finance? Let’s find out.

Positive Reviews

Many positive Rapid Finance reviews praise them for exceptional customer service. In particular, customers appreciate that they get a dedicated business advisor who can work with them to ensure they manage their financing responsibly. In fact, many Rapid Finance reviews call out specific business advisors who have made the process easier for their customers.

Busy small business owners might not be knowledgeable about their funding options. A helpful and honest representative will guide small business owners in securing financing that aligns with their capital needs and budget.

Negative Reviews

A common theme among negative Rapid Finance reviews is the high cost of capital.

Overall, Rapid Finance complaints often involve their factor fees because they are expensive. As a reminder, high interest for short-term business loans is almost inevitable—quick, easy-to-qualify-for business financing will always be more costly than longer-term options. 

We should also note that customers have complained about Rapid Finance’s cumbersome application process. In response, Rapid Finance has worked to make their self-service portal more intuitive, leading to less friction and more loan application approvals.

Top Alternatives to Rapid Finance

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OnDeck

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5

Products Offered

Term loan; lines of credit

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Starting at 35.1%; 31%

Minimum credit score required

600
BlueVine

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Fundera Score

5

Products Offered

Invoice factoring; lines of credit

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Starting at 0.25% per week; Starting at 4.8%

Minimum credit score required

530; 650
Credibly

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Fundera Score

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Products Offered

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Factor rates as low as 1.15

Minimum credit score required

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Frequently Asked Questions

Is Rapid Finance in Fundera’s Network?

Rapid Finance is in Fundera’s Lender Network. The Fundera team has carefully vetted Rapid Finance and determined that their offering is one of the best in their product category. When working with Rapid Finance, you can be sure you’re getting transparent, fair pricing on a best-in-class product.

Matthew Speiser
Contributor at Fundera

Matthew Speiser

Matthew Speiser is a former staff writer at Fundera.

He has written extensively about ecommerce, marketing and sales, and payroll and HR solutions, but is particularly knowledgeable about merchant services. Prior to Fundera, Matthew was an editorial lead at Google and an intern reporter at Business Insider. Matthew was also a co-author for Startup Guide—a series of guidebooks designed to assist entrepreneurs in different cities around the world.

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