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Rapid Finance Review

Our lender review of Rapid Finance weighs the pros and cons of the company’s loan and factoring options. Are they right for you?

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Founded in 2005 as RapidAdvance, the Rapid Finance company provides small business loans, merchant cash advances and other short-term financing options.

Its pros include a variety of financing options, low factor rates instead of interest rates, low origination fees and a quick approval process. Its cons include requirements that exclude new startups that haven’t met certain criteria.

Consider Rapid Finance if you:

  • Need financing from $5,000 to up to $1 million
  • Have been in business for at least 3 months and are generating $5,000 or more in monthly revenue
  • Have a FICO personal credit score of 550 or more

Rapid Finance Small Business Loans

Rapid Finance offers a variety of financing products. Signature products include short-term small business loans that can be used to:

Upgrade technology
Hire new workers
Expand locations
Consolidate debts

Rapid Finance small business loans include the following features:

  • Available in amounts from $5,000 to $1 million
  • Terms available from 3 to 60 months
  • Fixed fee factor rates (instead of interest rates), which set your total repayment at the amount borrowed plus a fixed percent of the amount borrowed
  • Available in standard, select and preferred tiers with increasingly strict qualifying criteria
  • Origination fees vary with loan terms
  • Automatic daily, weekly or monthly payment options
  • Backed by Uniform Commercial Code 1 (UCC-1) blanket liens, which are liens that allow all of your business assets to be seized as collateral in the event of failure to repay
  • Personal loan guarantee allowing the pursuit of your personal assets if your business fails to repay debts

Rapid Finance handles interest rates differently from many lenders. Rapid Finance prices all its products using factor rates instead of interest rates. Factor rates simplify repayment calculations by telling you a fixed fee you will have to repay on your loan. The fixed fee is usually expressed as a multiplier of your loan amount or as a percentage indicating how much you have to repay on top of your loan amount. The percent you pay will depend on how Rapid Finance assesses your credit.

Small Business Loan Requirements

To qualify for a loan, you need an established business that is already generating revenue. You also need a good credit history. You stand the best chance of qualifying if you:

  • Have been in business for at least 2 years for standard tier loans
  • Are generating at least $120,000 in annual revenue
  • Have a personal FICO credit score of 600 or more
  • Have no large outstanding liens or judgments against your business

What You Need to Apply

To begin applying for a small business loan from Rapid Finance, you need:

  • A government-issued photo identification (such as a driver’s license)
  • A voided check from your business checking account
  • The 3 most recent statements from your business bank account

Rapid Finance Merchant Cash Advances

Merchant cash advances are another popular option Rapid Finance offers. Under this arrangement, you receive a cash advance that you repay by arranging for a percentage of your future credit-card receivables to go to your lender on a daily or weekly basis until your debt is repaid. Since payments come directly out of your sales, this option can be easier to qualify for than a loan.

Merchant cash advances can be used to:

Buy new equipment
Cover short-term capital needs
Buy inventory
Cover payroll

Rapid Finance merchant cash advances feature:

  • Amounts from $5,000 to $500,000
  • Repayment periods averaging 9 months
  • Factor rates averaging 14% to 48%
  • Multiple tiers of eligibility, beginning with starter tiers for less established businesses and including special tiers for health-care businesses
  • No origination fees
  • Automatic daily and weekly repayment options
  • No collateral requirement
  • Personal guarantee required

Merchant Cash Advance Requirements

Qualifications for merchant cash advances increase by tier, as elaborated through research by third-party reviewers:

  • New businesses can qualify for starter tier cash advances after being in business as little as 3 months, but other tiers require 1 or 2 years
  • Applicants for starter cash advances must be generating at least $10,000 a month in monthly credit-card sales, while standard and premium tiers only require $3,500 a month and higher tiers for health-care businesses have stricter requirements of $25,000
  • Applicants must have a personal FICO credit score of at least 500 for starter, standard, and standard health-care tiers and 600 for premium and premium health-care tiers
  • For standard tier cash advances, applicants must have never filed for bankruptcy, and for other tiers, must owe liens or judgments of no more than $75,000

What You Need to Apply

To apply for a merchant cash advance, you need:

  • A government-issued photo ID (such as a driver’s license)
  • A voided check from your business checking account
  • The 3 most recent statements from your business bank account
  • Your last 3 credit-card processing statements

Rapid Finance Other Kinds of Financing

Rapid Finance offers a variety of other kinds of financing, including:

  • Lines of credit, which work similarly to credit cards
  • Bridge loans to cover closing costs and short-term capital needs
  • Small Business Administration (SBA) loans
  • Factoring, where financing is extended on the strength of your accounts receivable
  • Asset-based loans, which use company assets as collateral
  • Commercial real-estate loans to purchase or refinance commercial properties

Most of these financing options cater to well-established businesses, and new businesses will have difficulty qualifying for them. For instance, lines of credit require 8 years in business.

Rapid Finance Lending Experience

As its name suggests, Rapid Finance delivers a fast, smooth lending experience. You can start the process with a minimal amount of paperwork by applying online or by speaking with a dedicated financial adviser.

After completing a form, if you qualify, you will get a free quote and speak to an adviser about your options. Rapid Finance will do a hard pull on your credit. (This is a credit check that appears in your credit report and potentially can lower your credit score by a few points in contrast to a soft pull, which doesn’t impact your score).

Rapid Finance’s approval time tends to be quick. In some cases, approval decisions may be made within hours or even minutes and funding may be available within days or less. That said, some applications can take longer.

Rapid Finance helps you navigate the streamlined application process with the aid of a convenient online management portal for reviewing options and uploading documents. The online application process receives support from excellent online resources and strong customer service. All this helps contribute to a fast, easy lending experience.

The Pros of Rapid Finance

Rapid Finance boasts several strong points that have helped make it a leading lender:

  • A flexible array of lending options accommodates a wide range of borrowers, including those with relatively little time in business (as little as 3 months for the lowest-tier merchant cash advances and 1 year for lowest-tier loans) and moderate credit scores
  • Low factor rates ease repayments
  • Low origination fees minimize the cost of the borrowing process
  • The streamlined application process makes applying and getting approved fast
  • Online tools and customer support make the application process easy
  • Rapid Finance works with a network of third-party lenders and can point you toward additional options

The Cons of Rapid Finance

  • The biggest con voiced in Rapid Finance reviews is that the company caters to established businesses and owners with moderate to good credit ratings. If you haven’t been in business long enough to meet minimum requirements (3 months), don’t have enough revenue or have a poor credit rating, you may find the application process disappointing.
  • Rapid Finance specializes in short-term financing, which tends to have higher repayment rates as a tradeoff for lower eligibility requirements. For long-term financing involving terms longer than 18 months, other options may offer less expensive repayment terms if you can qualify.
  • While many applications get approved rapidly, others might take longer. This especially may be the case with applications for higher-tier loans, longer-term loans and loans involving third parties.
  • Rapid Finance uses automated repayments. This can cut into your cash flow if you’re not prepared for it, so make sure you factor this into your budget if you use Rapid Finance as a lender.
  • Rapid Finance’s brand has an average five-star rating from the Better Business Bureau, but Rapid Finance BBB reviews do include a few complaints. A handful of reviews mention poor customer service experiences involving communication issues.

Final Say: Rapid Finance Reviews

Rapid Finance is an attractive option for businesses that have started to establish a steady stream of revenue and are seeking additional short-term capital to improve their budget or expand. However, new startups without an established revenue base, business owners with poor credit ratings or companies seeking long-term financing may need to explore other options.

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