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Breakout Capital Review

Thinking about securing a business loan from Breakout Capital or using the lender's FactorAdvantage service? Read our review to help you evaluate your options.

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Founded in 2015 and acquired by SecurCapital Corp. in 2019, Breakout Capital LLC provides business loans, invoice factoring and other financing services for small businesses.

Breakout Capital, which finances small business owners with moderate credit scores provided they meet revenue criteria, offers transparent rates and a fast approval process. However, the company’s rates are higher than typical lenders.

Consider Breakout Capital if you:

  • Seek up to $250,000 in financing
  • Have unpaid accounts receivable you need to convert into cash quickly
  • Have been in business at least 1 year
  • Have a FICO score of at least 600
  • Don’t qualify for conventional financing with lower rates
  • Need funds more quickly than typical lenders can provide

Breakout Capital's Business Loans

Breakout Capital loans feature:

  • Amounts of up to $250,000
  • Terms of up to 24 months
  • Rates starting at 1.25% a month
  • Daily, weekly or monthly repayment plans
  • Prepayment rebates

In contrast to most lenders, Breakout Capital prices their loan repayment rates as a per-month percentage of your loan. This involves a type of repayment rate known as a factor rate. Instead of using interest rates that are calculated as annual percentage rates (APRs), in which the amount you pay can vary based on the principal you still owe, Breakout Capital factor rates calculate your repayments at a fixed rate, which is expressed as a multiplier or percentage of your loan.

Breakout Capital’s site includes an APR loan calculator to help you compare how the company’s factor rates compare to other loan products that use APR interest rates. When making you an offer, Breakout Capital also provides a tool called SMARTBox to help you compare the lender’s rates with other types of financing offers.

Breakout Capital's Invoice Factor Financing

Breakout Capital offers an invoice factoring service called FactorAdvantage.

  • What Is Invoice Factoring?

    Invoice factoring is a financing arrangement where you receive money based on the unpaid accounts receivable invoices your customers owe you.

    You sell your unpaid invoices at a discount to a third party, known as a factor, making the majority of the money available to you as an advance payment before your customers pay the invoices.

    The factoring company then collects the invoices from your customers and returns the balance of the money to you, minus a fee for borrowing you the funds in advance. The balance that gets returned to you is called a rebate, while the fee that your provider subtracts is called the discount.

This financing arrangement can appeal to companies in industries that deal in high volumes of credit payments that don’t get processed immediately, such as:

  • Retailers
  • Health-care providers
  • Restaurants
  • Health spas
  • Auto dealers

FactorAdvantage features:

  • Amounts up to $500,000
  • Terms up to 24 months
  • Factor rates starting at 1.25% a month

As with Breakout Capital’s loans, FactorAdvantage payments get calculated using a monthly factor rate. When making you a FactorAdvantage offer, Breakout Capital provides its SMARTBox tool to help you compare rates with other lenders.

Breakout Capital's Other Types of Financing

If Breakout Capital’s solutions aren’t right for you, their advisors also help you connect with other lenders to find other types of financing, including:

  • Small Business Administration (SBA) 7(a) loans
  • Business lines of credit
  • Merchant cash advances
  • Debt restructuring
  • Equipment leasing
  • Franchise loans
  • Asset-based lending

Breakout Capital Lending Experience

Breakout Capital’s application process begins with a telephone call or by filling out an online form. The form collects prequalifying information, including:

  • Basic information about your name and contact information
  • Details about your business
  • Your funding request

After this, Breakout Capital will ask you to upload documentation verifying your business income. They provide an online portal where you can upload documents. They will also check your credit to ensure that you meet their minimum FICO credit score requirement of 600.

If you qualify, Breakout Capital will extend you an offer. You can compare the offer to other funding proposals using Breakout Capital’s SMARTBox tool.

Breakout Capital’s site doesn’t indicate how fast applications are processed. However, two third-party reviewers say the process can take as little as 24 hours if you provide all documents immediately.

Breakout Capital Pros

Invoice factoring for companies with high volumes of accounts receivable

  • Transparent rates, with tools to help compare rates
  • Easy application process, with an online portal for uploading documents
  • Willingness to work with borrowers who have moderate credit scores
  • No prepayment penalties

Breakout Capital Cons

Breakout Capital’s biggest con is the factor rates can be high compared with typical lenders. This reflects a common practice in the alternative lending industry because of the higher risk lenders assume when they finance businesses that don’t qualify for conventional loans.

Breakout Capital Requirements

To qualify for Breakout Capital loans, you need:

  • Time in Business 1+ Years
  • Monthly Revenue $10,000+
  • FICO Score 600+

For Breakout Capital factoring, there are no requirements for time in business, minimum revenue or minimum FICO score.

Breakout Capital Application: What You Need to Apply

To apply for Breakout Capital finance solutions, you need to upload a minimum of:

  • Your last 3 months to 6 months of all commercial bank statements, with 6 months “strongly preferred”
  • Your most recent business tax returns

You also may be asked to provide additional documentation, so your application can be processed faster if you also upload:

  • Year-to-date financial statements
  • A copy of your driver’s license
  • Proof of business ownership in such a form as articles of incorporation or a business license
  • A lease agreement or mortgage arrangement including your signature page and term
  • A voided business check

Final Say: Breakout Capital Review

Breakout Capital represents a useful financing option for small business owners who have strong revenue but moderate credit scores or who need to convert accounts receivable into cash flow.

However, if you have a good credit score, you may be able to find less expensive services if you consider conventional lending options and shop around.

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