BFS Capital offers both short-term working capital loans and merchant cash advance financing. BFS Capital stands out compared to other lenders by offering fast financing, larger loans, and more lenient requirements. Despite some ambiguity as to the true cost of these loans, we'd recommend BFS Capital for any borrower who can't qualify for a loan with a bank.
BFS Capital Overview
BFS Capital offers financing up to $1 million for certain types of businesses, which is much larger than financing from other lenders. This financing comes in the form of either a short-term loan or a merchant cash advance, known as an MCA, which is when a financing company advances you cash in exchange for a percentage of your credit and debit card sales. Most businesses will be able to qualify for financing up to $500,000, which is still on the larger side of what's available in the market.
Additionally, BFS Capital promises funding in as little as three days, which is roughly the same as what other online and alternative lenders can offer. Borrowers with poor credit who can't qualify for financing with other lenders should turn to BFS Capital's merchant cash advance offering, which is far easier to qualify for. However, be aware that merchant cash advances typically come attached with high fees in exchange for their leniency.
BFS Capital: Worth Applying?
BFS Capital is a great option for those with lower personal credit scores who still require large amounts of debt financing to help grow their businesses. Many lenders, especially traditional lenders like banks, will approve applicants based on their personal credit scores, age of operations, and annual revenue, which are all factors that may cause many businesses -- especially those that are relatively new -- to struggle securing a loan.
However, keep in mind that lenders with more lenient requirements usually charge higher fees. They incur a higher risk of a borrower defaulting when they lower their standards and thus, balance that risk by charging higher rates for loans. This is especially true for merchant cash advances, which BFS Capital offers.
Low Credit Score Requirements: Securing a small-business loan with a low personal credit score is tough, but BFS Capital provides an alternative option for those with lower credit scores since they judge applicants on a large range of factors. We just reiterate our warning that lenders with lower credit score requirements typically charge higher rates, so be sure your business will still incur a net positive accounting for whatever rates your business is granted.
Large Financing: Most online or alternative small-business loan lenders offer loans up to $250,000. It is rare to see an alternative lender provide financing beyond that. BFS Capital offers some of the largest financing we've seen by providing up to $1 million in financing for certain businesses.
BFS Capital's default maximum loan, however, is $500,000, which is still larger than what most other lenders offer. Keep in mind that your business doesn't necessarily need to take the full loan offered. These larger limits just provide more financing flexibility.
Fast Funding: Many online lenders provide funding within a few business days and BFS Capital is no exception. This is a massive difference from traditional lenders where the application process can sometimes take weeks. BFS Capital provides funding as fast as same-day but it can take up to three business days. We'd recommend preparing as much as possible before applying to expedite the process.
Flexible Use Cases: Some lenders require that their financing be used for a specific use but BFS Capital allows for its financing to be used for all use cases. This makes its financing extremely flexible, and if borrowers find that they want to use their financing for something different than what they initially planned, they're free to do so.
BFS Capital Downsides
BFS Capital doesn't publish its rates online, which makes it difficult for prospective borrowers to gauge how expensive its loans really are. BFS Capital also limits its financing to just term loans or merchant cash advances, while other lenders often offer other financing like a business line of credit as well.
High Rates: BFS Capital's lack of transparency with its rates lead us to believe that its rates are high. We recommend converting rates to either annual percentage rates, known as APRs, or cost per dollar borrowed to compare different options apples-to-apples, but this is impossible to do before applying because BFS Capital doesn't publish its rates online.
Lack of Variety: We only recommend that borrowers consider a merchant cash advance if they've exhausted all other options. Merchant cash advances typically come with exorbitant fees that can cause borrowers to go into a debt spiral. Since BFS Capital only offers term loans or merchant cash advances, borrowers are quite limited in their options.
How Does BFS Capital Compare to Other Online Lenders?
While BFS Capital offers large term loans with lenient requirements, we'd still recommend borrowers shop around to weigh different options.
BFS Capital vs. Kabbage
BFS Capital and Kabbage are both online lenders with relatively lenient requirements and are great options for those with lower credit scores. However, the difference comes in the type of financing you need. BFS Capital offers large term-loans, which are better suited for singular large purchases like buying land or large machinery. Kabbage offers smaller business lines of credit that are better suited for medium-sized ongoing operations, such as a marketing campaign. Borrowers should also be aware that because both lenders are available for borrowers with lower credit scores, they're likely to charge higher rates than a bank.
Highlights (Business Line of Credit)
- APR: 20.00% - 80.00%
- Amount: $2,000 - $250,000
- Terms: 6, 12 or 18 months
- Repayment: Monthly
BFS Capital vs. OnDeck
OnDeck is another online lender that's best suited for borrowers with lower personal credit scores. OnDeck offers term loans that are similar in size to BFS Capital's and both lenders offer fast funding. We'd recommend OnDeck over BFS Capital because OnDeck is more transparent with its rates. In addition, repeat borrowers with OnDeck are eligible to receive discounts provided they're in good standing.
Highlights (Term Loan)
- APR: 9.30% - 99.70%
- Amount: $5,000 - $500,000
- Terms: 3 - 36 months
- Repayment: Daily or weekly
BFS Capital vs. Credibly
Similar to BFS Capital, Credibly offers term loans and merchant cash advance financing. We'd recommend those looking for larger loans to consider BFS Capital over Credibly because of the size of loans BFS Capital offers. However, for borrowers who need a smaller loan, we'd recommend Credibly over BFS Capital. Credibly publishes its rates online and provides more transparency, which we consider to be extremely important.
Highlights (Working Capital Loan)
- Factor Rate: 1.15x - 1.49x
- Amount: $5,000 - $400,000
- Terms: 6 - 18 months
- Repayment: Daily or weekly