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RapidAdvance Business Loans

RapidAdvance Business Loans

With the backing of major capital firm Rock Ventures -- also owner of Quicken Loans -- it should come as no surprise that RapidAdvance has a strong presence among non-traditional lenders. Since its founding, it has disbursed almost $600 million to small businesses. In some ways, they bridge the gap between traditional and nontraditional lenders, offering a wide range of services but combining them with a somewhat lower barrier of entry.

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Loans Offered

RapidAdvance keeps the application process simple (more on that below), but offers multiple options to make it easier for small businesses to find, or tailor, the right solution.

Merchant Cash Advance

The RapidAdvance Merchant Cash Advance Program gives businesses access to working capital lent against a portion of future credit card sales. Terms are flexible and affordable, given that repayment is a percentage of daily receipts.

Small Business Loan

Small business loans are disbursed as a lump sum, and are intended for one-time expenditures like debt consolidation, equipment upgrades, and expansions. Approvals take a matter of hours, and funds may be available in as little as one business day.

Small Business Line of Credit

Lines of credit work in much the same way as a credit card, in that you're preapproved for a set amount but will only be charged interest on the funds you actually draw.

SBA Bridge Loan

The SBA has helped thousands of businesses. However, their process can be incredibly complex and time consuming, which can be a problem when your business needs capital fast. Amounts disbursed under the RapidAdvance SBA Bridge Loan will depend on your monthly receipts, but can tide you over until your SBA loan clears.

APR, which includes origination fees and other fees, varies widely based on the product chosen, repayment terms, and credit rating. RapidAdvance states that their rates, like their products, are individualized; they don't publicize their rates as much as they do their products. Outside estimates peg their typical APR between 30% and 250% depending on the product chosen and your credit history.

Who Qualifies, and How to Apply

As with most lenders, your FICO score will be an important determinant in what you can borrow and how much you'll pay to do so. However, RapidAdvance looks at your business's overall performance in determining eligibility, making it a bit easier to qualify than it might otherwise be with a bank. The application process is handled by phone or online, and requires each of the following:

Your credit score should be 600 or higher, with some exceptions. Your business should be in operation for at least two years; businesses with longer track records are likely to qualify for better rates. Your monthly minimum revenue should be $5,000, but this can vary by product and the amount of funds requested. You'll also need to furnish a government-issued photo ID, plus the last three statements and a voided check from your business bank account.

These requirements are typical of the non-traditional lending business, but it's worth noting that as loose as they are, they tend to leave newer businesses and startups out of luck.

Other Services Offered

While they don't offer as wide a range of services as a bank -- you won't find investment services, payroll, and other ancillary support here -- RapidAdvance does go beyond the services offered by many of its competitors. Rather than just issuing and servicing loans, they offer white papers, videos, tutorials, and e-books alongside a blog that offers financial and marketing advice.

Case Study: Jeannie's One-Stop Diner

RapidAdvance has helped businesses as diverse as tire shops, liquor stores and hair salons find their footing in a competitive market. One such business was Jeannie's One-Stop Diner in Panama City Beach, Florida.

Owner Jeannie Deloriea has used RapidAdvance products repeatedly since 2008, taking loans that have enabled her to upgrade equipment, improve decor, and expand her business. She had especially high praise for the level of customer service she's received as a client, and also notes that the application process has proven to be hassle-free time and again.

Expert Verdict

In many ways, RapidAdvance is better than average. They offer a wider range of products and services than their competitors, making them a good option for some small businesses. In other ways -- their application process and requirements, as well as the kinds of interest rates and fees charged -- the company tracks very close to the industry average. While it's easier to qualify than it would be for a bank loan, a loan from RapidAdvance is by no means a foregone conclusion. Nor, for that matter, is it an inexpensive proposition if your credit is less than excellent. As is the case with many of their competitors, it's incumbent on borrowers to weigh the risks against immediate needs or long-term benefits.