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Forward Financing is an online provider of merchant cash advances, an option for cash-strapped small business owners who don’t have good credit. Merchant cash advances are not necessarily a good choice for businesses that are looking to keep fees down, though, as they are known for being high-fee products that are similar to payday loans.
Forward Financing isn’t especially transparent about how much it charges, which leaves many open-ended questions for potential borrowers. Nevertheless, Forward Financing is a popular option for merchant cash advances, and the company claims to have funded more than 10,000 business owners since it was founded in 2012.
Forward Financing: Should you apply?
Boston-based Forward Financing offers a solution for small business owners who need funding fast and don’t have time or aren’t likely to qualify for traditional business loans. Specifically, the lender offers merchant cash advances, also known as MCAs. With a merchant cash advance, business owners receive funding upfront and must then pay it back with a percentage of daily sales. MCAs are usually best for businesses that have high transaction volumes.
Forward Financing is fairly typical of other MCA lenders, promising easy access to quick funding and personal customer service through its dedicated account advisors, while providing scant details on interest rates and fees. Though potential applicants should be aware of the drawbacks of MCAs, Forward Financing does have an A+ rating from the Better Business Bureau.
What does Forward Financing offer?
Forward Financing only offers MCAs. If approved for an MCA, Forward Financing will advance you anywhere from $5,000 to $300,000, which is typical of many other MCA lenders. You can use the funds for a variety of purposes, such as purchasing equipment and inventory, hiring new employees or opening additional locations.
In exchange for providing upfront funds to borrowers, Forward Finance will take a stake in the business’s future revenue until the loan is repaid. You will pay off the MCA with daily or weekly payments that based on your sales volume for that time period, which is also along the lines of how other MCA lenders work. An MCA is vastly different from a typical small business loan in that payments aren’t pre-set and rather rely on your current business cash flow. This also means there’s no way to accurately calculate the true cost of financing in advance.
- Loan amount range: $5,000 - $300,000
- Total interest: Not disclosed
- Fees: Lender does not disclose
- Financing terms: 4 - 12 months
- Repayment options: Daily or weekly
- Collateral required: No
- Personal guarantee: No
Do you qualify for Forward Financing?
Forward Financing is much more lenient in approving business owners for funding than a traditional lender like a bank. Most business owners will likely qualify for financing, provided that you’ve been in business for at least three months and have at least $5,000 in monthly sales.
- Minimum personal credit score: No minimum
- Minimum revenue: $5,000 in monthly sales
- Minimum time in business: 3 months
Like many other MCA lenders, Forward Financing doesn’t have a minimum credit score requirement. However, the company still will check your credit history when making a decision about whether to approve you and, if so, with what terms. Forward Financing only does a soft credit check, so it will not affect your credit. If you have bad credit you may still be approved, but it’s possible you’ll pay far more than if you had good credit.
How to apply for Forward Financing
It’s easy to apply for an MCA with Forward Financing. You can simply apply online, and it only takes about 10 minutes to fill out the application. You’ll need to have a few pieces of information on hand, including:
- The business owner’s name and Social Security number
- The business’ name and tax ID number or EIN
- Copies of your three most recent bank statements
Forward Financing will notify you if you’re approved for financing within as little as a few hours. If you apply outside of normal business operating times you won’t hear back from Forward Financing until it re-opens.
Once you’re approved, Forward Financing will send the money to your bank account by the next business day, as long as you apply before 3:00 pm EST. You can also opt to have the money wired to your account sooner if you need it, although you’ll pay an extra fee.
Most industries can seek an MCA with Forward Financing, as the company provides financing to more than 700 industries. The only businesses that aren’t eligible are vice-related industries, such as gambling, weapons or adult entertainment.
Forward Financing versus other comparable lenders
Forward Financing is not your only option if you're looking for an MCA — the company has many competitors.
Forward Financing vs. Fora Financial
Another option is Fora Financial, which promises funding in as little as 72 hours after approval (as compared with the next business day after approval with Forward Financing). Both Fora Financial and Forward Financing offer MCAs of as little as $5,000, although you can get more with Fora Financial — up to $500,000, as compared to just $300,000 with Forward Financing.
Forward Financing vs. National Funding
National Funding is another lender that provides MCAs to businesses that have been operating for at least a year. You’ll also need to have at least $3,000 worth of credit card sales per month, so it may be a better option if you aren’t quite able to meet Forward Financing’s $5,000 monthly sales requirement. You can qualify for a similar amount of financing with National Funding, up to $250,000.
Forward Financing vs. BlueVine
BlueVine is another popular business financing company. It doesn’t offer merchant cash advances, but it does offer a wider range of products that might fit your funding needs better, including term loans, lines of credit and invoice factoring. BlueVine is more up-front with its pricing and fees, a mark of a more honest and open company.
If you decide an MCA is right for your business, try choosing a few different MCA companies you think you’d like to work with and contact them to get a quote. Most MCA lenders aren’t very upfront about financing costs, so there’s no way to really compare the financial details unless you reach out to the companies directly. Make sure to compare other features as well, such as whether there are any prepayment penalties or discounts, and how repayment works.