Merchant Cash Advance Company Review

Company Profile

Kapitus is a leading provider of small business financing and capital. Founded in 2006, the company has been dedicated to providing small businesses with accessible capital. They believe that business owners should be able to get the funding they need to grow their businesses, regardless of their credit history or the unpredictability of their cash flow. Kapitus has built advanced technology that looks at the health of a business, not just the business owner’s credit score. They are committed to providing a smooth customer experience, speedy delivery, and multiple loan options.

The company was formerly known as Strategic Funding Source, but rebranded as Kapitus in 2019. The rebranding was a strategic move to better reflect the company's mission of serving as a trusted partner to small businesses, helping them navigate the complex world of financing and providing the capital they need to grow. Kapitus is headquartered in New York City and has provided over $2 billion in financing to businesses in hundreds of industries across the United States.

Products & Services

Kapitus offers a wide range of financing solutions to meet the diverse needs of small businesses. Their product portfolio includes:

1. Helix Healthcare Financing: This is a patient financing platform that allows healthcare providers to offer their patients a flexible, low-interest payment plan. It's designed to help healthcare providers increase their revenue by providing patients with an affordable way to pay for their care.

2. Line of Credit: Kapitus provides a business line of credit that gives businesses access to funds whenever they need them. It's a flexible financing solution that can be used for any business purpose, from managing cash flow to purchasing inventory.

3. Business Loans: These are traditional term loans that provide businesses with a lump sum of capital that is repaid over a set period of time. Kapitus offers both short-term and long-term business loans.

4. Equipment Financing: This product allows businesses to finance the purchase of new or used equipment. It's a great option for businesses that need to upgrade their equipment but don't have the cash on hand to make a large purchase.

5. SBA Loans: Kapitus is a preferred lender of the Small Business Administration (SBA), which means they can provide government-backed loans to small businesses at lower interest rates and with more flexible terms than traditional loans.

6. Merchant Cash Advance: This is a type of funding that is based on a business's future credit card sales. It's a good option for businesses with strong credit card sales but poor credit.

7. Invoice Factoring: This product allows businesses to sell their unpaid invoices to Kapitus in exchange for immediate cash. It's a good option for businesses that have cash flow issues due to slow-paying customers.

8. Purchase Order Financing: This is a short-term financing option that provides businesses with the capital they need to fulfill large purchase orders. It's a good option for businesses that have received a large order but don't have the cash on hand to fulfill it.

Pros and Cons

Pros:
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1. Wide range of financing options: Kapitus offers a variety of products to meet the diverse needs of small businesses.
2. Flexible requirements: They provide financing to businesses with poor credit and those that have been in business for a short time.
3. Fast funding: Kapitus can provide funding in as little as 24 hours.
4. High loan amounts: They offer loans up to $1 million, which is higher than many other online lenders.
5. Excellent customer service: Kapitus has a reputation for providing excellent customer service and support.
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Cons:
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1. High interest rates: Some of their products, like the merchant cash advance, can have high interest rates.
2. Fees: There may be origination fees and other costs associated with their loans.
3. Not available in all states: Kapitus does not operate in all states.
4. Not suitable for startups: Most of their products require a business to have been in operation for at least one year.
5. Requires a personal guarantee: Most of their products require the business owner to provide a personal guarantee, which means they are personally responsible for repaying the loan if the business fails.

Ideal Customer

The right type of customer for Kapitus is a small business owner who needs fast access to capital. This could be a business that is facing a cash flow crunch, needs to purchase inventory or equipment, or is looking to expand. Kapitus is particularly well-suited to businesses that have been turned down by traditional lenders due to poor credit or a lack of business history. However, businesses should be aware that some of Kapitus's products, like the merchant cash advance, can be expensive and should only be used as a last resort.

Required Documentation

To apply for financing with Kapitus, businesses typically need to provide the following documentation:

- Completed application form
- Bank statements for the last three months
- Business tax returns
- Proof of ownership
- Driver's license

The exact documentation required may vary depending on the type of financing the business is applying for.

Industries and Restrictions

Kapitus serves businesses in a wide range of industries. They have provided financing to businesses in the retail, restaurant, healthcare, construction, and manufacturing industries, among others. However, they do not provide financing to businesses in certain restricted industries, such as gambling and adult entertainment.

State of Operations

Kapitus operates in all 50 states, providing financing to businesses across the United States. However, the availability of certain products may vary by state due to state-specific regulations.

Basic Qualifications

To qualify for financing with Kapitus, businesses typically need to meet the following criteria:

- In business for at least one year
- Minimum annual revenue of $100,000
- Owner's personal credit score of 550 or higher

Again, the exact qualifications may vary depending on the type of financing the business is applying for.

Collateral or Guarantees

Most of Kapitus's products require the business owner to provide a personal guarantee. This means that the business owner is personally responsible for repaying the loan if the business fails. Some of their products, like the equipment financing, may also require the business to provide collateral.

Alternatives

Businesses that are not a good fit for Kapitus may want to consider other financing options. Traditional banks often offer lower interest rates and longer terms, although they have stricter credit requirements and a longer application process. Online lenders like OnDeck and Kabbage also offer fast, flexible financing for small businesses. For businesses that need equipment, equipment leasing may be a more cost-effective option than a loan. Finally, businesses that are just starting out may want to consider crowdfunding or seeking investment from venture capitalists or angel investors.