Expansion Capital funds companies through merchant cash advances, where they advance you money based on your sales revenue.
Because the strength of your sales determines creditworthiness, Expansion Capital funding is available even to business owners with lower credit scores. However, the tradeoff for easier approval is higher repayment rates.
Consider Expansion Capital if you:
- Are pursuing a time-sensitive opportunity and you need access to funds fast.
- Have had trouble securing financing elsewhere
Expansion Capital Group Small Business Financing
Expansion Capital Group does not extend traditional loan arrangements but offers financing through merchant cash advances. Under this type of agreement, Expansion Capital advances you a lump sum, which you must repay in addition to a flat fee representing a percentage of the advance amount. Repayments get withdrawn automatically from your bank account in daily or weekly frequency. This differs from other merchant cash advance services that deduct payments directly from your credit card sales.
There are no restrictions on how funds are used. With a merchant cash advance, you can:
- Purchase new equipment
- Hire new workers
- Train staff
Expansion Capital merchant cash advances feature:
- Amounts from $5,000 to $300,000
- Repayment terms of 3 to 12 months
- Factor rates (rather than interest rates) of 1.2 to 1.6, meaning that in addition to repaying your cash advance, you must repay a flat fee from 20% to 60% of the original advance amount.
- Origination fees, which are not disclosed until a loan offer is extended
- Automatic daily or weekly repayments
Expansion Capital Group prices your repayments by using factor rates instead of interest rates. Factor rates charge you a fixed fee, expressed as a multiplier or percentage of the amount advanced. This is in contrast to repayments based on interest rates, where the amount you repay can fluctuate depending on the amount of principal you still owe. For instance, if you receive a cash advance of $300,000 at a factor rate of 1.6, you must repay an additional 60% of the amount advanced. So, your total debt is $480,000 (plus any additional fees, such as origination fees).
Expansion Capital Group Lending Experience
Expansion Capital provides a form where you can schedule a phone appointment. Alternatively, you can complete the application online. The online form asks for your monthly gross sales, which is the biggest factor Expansion Capital considers when evaluating applications.
If you qualify, an Expansion Capital representative will contact you to continue the approval process. At this point, you will need to provide evidence of your business income in the form of 3 months of recent bank statements or credit card statements.
During this phase of the process, Expansion Capital will do a “hard pull” to check your credit score. This will appear on your credit report and can lower your credit score.
If you are approved, an Expansion Capital business funding manager will email you a quote offering you a contract within 24 hours. After you accept the agreement, the money will typically be available within 2 business days.
Expansion Capital Group Pros
Expansion Capital has a few positive points in its favor:
- Willingness to finance business owners with lower credit scores
- Easy application process
- Fast financing availability
Expansion Capital Group Cons
On the downside, Expansion Capital falls short in a few areas:
- Lack of transparency regarding factor rates, additional fees and how their hard credit pull policy can affect your credit score.
- High rates
- Daily or weekly payment deductions from your bank account can cause cash flow problems if you don’t plan your budget accordingly
Requirements for Expansion Capital Group
To qualify for Expansion Capital funding, you need:
- Time in Business 6+ Months
- Annual Revenue $100,000+
- Personal Credit Score 500+
Expansion Capital Group Application: What You Need to Apply
To apply for an Expansion Capital Group merchant cash advance, you typically need to provide:
- 3 months of bank statements or credit card statements
- Additionally, since Expansion Capital prefers a minimum credit score of 500, be prepared for a hard pull on your credit.
Final Say: Expansion Capital Group Reviews
Expansion Capital Group may represent a viable (but expensive) source of financing if you want to grow your business, and your credit score is too low to qualify for other forms of funding. They may also make sense if you need funding quickly and don’t want to wait for the traditional loan approval process.