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Knight Capital Funding Review

Our Knight Capital Funding review looks at the lender's merchant cash advances. Are they the right financing option for your business?

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Founded in 2013, Knight Capital Funding LLC finances small businesses through merchant cash advances. When reviewing applications, the lender places an emphasis on a company’s projected growth potential and not just personal credit ratings, so they are willing to work with business owners who have low credit scores provided they meet other criteria.

Knight Capital can be a useful funding source if you don’t qualify for other options due to a low credit rating, but they do charge relatively high repayment rates.

Consider Knight Capital Funding if you:

  • Have been in business at least 6 months
  • Generate at least $10,000 a month in revenue
  • Have strong future growth projections
  • Have explored other options

Knight Capital Merchant Cash Advances

Knight Capital provides merchant cash advances. Under this arrangement, Knight Capital forwards you a lump sum, and you agree to repay the amount out of a percentage of your future earnings. Since your future earnings will cover your debt, this allows Knight Capital to extend credit to businesses even if the owner has a low credit rating.

Knight Capital cash advance offers feature:

  • Amounts from $5,000 to $250,000, according to third-party reviewers
  • 60 to 260 days to repay cash advances
  • Factor rates (rather than interest rates) averaging 1.19 to 1.40, meaning you repay 19% to 40% on top of the amount of your advance
  • Origination fees of up to 2.5%, according to third-party reviewers
  • Repayments automatically are drawn daily on business days

In contrast to many conventional lenders, Knight Capital uses factor rates instead of interest rates. This means that instead of repaying an interest-based amount that can vary with the amount of principal you still owe, you get charged a flat fee based on a multiplier or percentage of the amount you borrow.

For instance, if you receive a cash advance of $100,000 at a factor rate of 1.20, you must repay an additional 20% of the amount you borrow, so that your total debt is $120,000 (plus any other fees such as origination fees). Knight Capital Funding factor rates average 19% to 40%.

Knight Capital Lending Experience

You can apply with Knight Capital by calling the company or filling out a short online application form that seeks basic information, namely:

  • Whether you own a business
  • Your average monthly sales
  • Your contact information

If you qualify, Knight Capital will contact you with an offer. You will then be asked to submit supporting documentation for approval.

Filling out the online application won’t affect your credit rating.

Applicants often receive funding and approval the same day. However, some applications may take up to 72 hours, according to third-party reviewers.

Pros of Knight Capital

Knight Capital boasts a few distinctions:

  • Transparency about factor rates, something relatively rare in the short-term financing industry
  • Willingness to extend cash advances to business owners with low credit scores
  • Fast approval process

Cons of Knight Capital

Knight Capital’s most significant limitations include:

  • Only one financing product option
  • While the factor rates are transparent, they are relatively high compared with other lending options
  • You must pay origination fees
  • Daily repayments can cut into your cash flow if you don’t factor this expense into your budget

Requirements for Knight Capital

When considering applicants for approval, Knight Capital looks for 3 main criteria:

  • Time in Business 6+ Months
  • Annual Revenue $120,000+ (or $10,000 Monthly)
  • Projection Future Financial Growth

Knight Capital’s website doesn’t list a minimum credit rating qualification to apply for a merchant cash advance.

Knight Capital Application: What You Need to Apply

Knight Capital’s website doesn’t disclose what documentation you need to apply for their merchant cash advance. Based on the information the company does disclose and common practices of the financing industry, you should expect to provide:

  • Documentation you’ve been in business for at least 6 months, such as articles of incorporation, bank statements, financial statements or tax returns
  • Records of your revenue, such as bank statements, financial statements or tax returns
  • Financial statements projecting future growth, such as profit and loss statements and balance sheets

Final Say: Knight Capital Funding Reviews

Knight Capital may be a funding option if your company is generating $10,000 or more a month but you don’t have a long history in business or a strong credit rating.

However, the repayment rates are expensive, so consider doing some comparative shopping with other financial providers before applying for funding with Knight Capital.

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