FAQ - Business Financing Questions & Answers
Learn about our flexible financial solutions
What financial products does BFS Capital offer small business owners?
As a direct funding source and industry leader since 2002, BFS Capital offers small business loans and merchant cash advances to small business owners.
What are the advantages of a small business loan from BFS Capital?
- Funding can occur in as few as two business days.
- Business loans from BFS Capital are a great option for businesses who have a more predictable cash flow stream and can operate with a daily or weekly fixed payment withdrawn from their bank account for the life of the loan.
- It is not necessary for businesses to accept debit/credit cards.
- There is minimal paperwork: complete one simple application instead of lengthy, complicated forms, business plans or years of financial history and tax returns.
How does a business qualify for a small business loan from BFS Capital?
It’s much easier to qualify for a business loan from BFS Capital than it is to qualify for a traditional bank loan or line of credit.
- Businesses must be in business for at least one year.
- Businesses should have an average daily bank balance of at least $1,500.
- Businesses should have acceptable credit.
- Businesses should have no excessive tax liens, open judgments or bankruptcies.
How is a small business loan from BFS Capital different from a traditional bank loan?
- Banks typically require extensive paperwork. At BFS Capital, we require minimal paperwork for our small business loan. We are more focused on your recent sales and daily cash flow than years of tax returns and P&L statements.
- You’ll probably have a long wait for funding from a bank—up to three months. At BFS Capital, you will receive approval in 24 hours and have capital wired to your business bank account in as little as two business days.
- Banks usually don’t lend to all businesses—just those in preferred sectors. We exclude businesses in very few sectors from consideration for a small business loan. We’re more concerned with the individual business and the current state of their performance.
- Most banks require equity. We don’t, plain and simple.
- Banks structure repayment of loans into fixed monthly payments, amortized over five or 10 or even 20 years, depending on the loan. We’ve structured the repayment process to be as client-friendly as possible. Repayment is automated through fixed daily or weekly payment amounts from your business bank account. Before you receive the loan, you will know exactly how much is being deducted from your account. What’s more, our system allows your loan to be paid in full in less than 18 months, while enabling you to maintain a healthy cash flow for your business.
What is a merchant cash advance? Is it also known by other names?
A merchant cash advance (also referred to as a business cash advance, credit card receivables financing or credit card factoring) is a convenient alternative to traditional small business loans. With this form of financing, capital is provided to businesses upfront – when they need it – based on their credit card sales and total sales volume. Repayment is easier than for traditional business loans because it is automatic and deducted through a small fixed percentage of the business’s debit/credit card sales.
What are the advantages of a merchant cash advance from BFS Capital?
- A merchant cash advance allows your business to access the capital you need through future credit/debit card sales.
- There is minimal paperwork required for approval.
- Funding can occur in as little as two business days – allowing you to take advantage of time-sensitive business opportunities.
- Repayment is easy and automatic through a small fixed percentage of your future credit/debit card sales.
- Because repayment is through a fixed percentage of sales, on days when sales are slow, you pay back less. When your sales volume is high, you pay back more.
- There are no limitations on how you use the money for your business.
How does a business qualify for a merchant cash advance from BFS Capital?
There are a few central qualifiers for obtaining a merchant cash advance from BFS Capital. Most are different from and – in many cases – more lenient than the requirements for getting a bank loan.
- Merchant cash advances are ideal for restaurants, retail stores and professional services, but we fund many other industries as well.
- Businesses must accept debit/credit cards as a form of payment to qualify for a merchant cash advance.
- Businesses must provide processing statements for the previous four months of least $4,000 per month in debit/credit card sales.
- Businesses must provide their most recent bank statements.
- Businesses should have no excessive tax liens, open judgments or bankruptcies.
What is the difference between a merchant cash advance and a short-term business loan?
A merchant cash advance is based on a business’s average monthly sales volume and is paid back through a small percentage of their future credit card sales. A short-term business loan is a great option for the business owner who has predictable cash flow, has been established for at least a year and has an average monthly bank account balance of at least $1,500. Repayment for a short-term business loan is fixed through a daily ACH transaction.
How much can my business qualify for?
Whether it’s a small business loan or a merchant cash advance, your business can qualify for $4,000 to $1 million depending on your recent sales and/or cash flow.
How does BFS Capital determine the size of a business’s merchant cash advance?
At BFS Capital, we use the average credit card volume over the last 4 months to determine the amount we approve for your business. We encourage you to submit any documentation (bank statements or sales tax receipts, for example) that supports your total sales volume. This way, we can approve the highest amount possible.
How do I repay my merchant cash advance from BFS Capital?
Repayment is easy and automatic. We collect a small percentage of each credit card transaction through a preferred processing bank.
Do I have to change credit card processors to get a merchant cash advance with BFS Capital?
No. If you’re not currently processing with one of our preferred credit card processors and switching processors would be inconvenient, we offer alternative payback options via ACH or through a third-party lock box account.
What types of funding does BFS Capital offer its clients?
BFS Capital offers alternative financing to small and mid-sized businesses. Our alternative financing solutions are significantly different from traditional bank loans and provide business owners cash upfront to use for business expenses as they see fit, from working capital to renovation and expansion to paying taxes.
Merchant cash advances, for instance, are based on a business’s total sales volume and monthly credit card receipts. They are repaid by automatic deduction of a small portion of the business’s monthly credit card receivables.
We also offer small business loans which provide a fixed-payment alternative for our customers.
Is BFS Capital an established, financially solid company?
Since our founding in 2002, we have built a solid, BBB accredited reputation as leader in the world of alternative financing by offering small business loans and merchant cash advances to more than 12,000 small to mid-sized businesses across the U.S. From our headquarters in South Florida and our offices in California, and the United Kingdom, BFS Capital and its affiliates work with business owners in a wide variety of business sectors, from all kinds of restaurants and retailers to professional services, such as medical or veterinary practices.
Our financial stability comes from institutional partner support and bank financing which, in turn, enables us to fund all qualified merchants. With years of industry experience and firm financial backing, BFS Capital enjoys a solid position as a preferred funding source for businesses across the U.S. and beyond.
Does BFS Capital offer unsecured business loans?
The business loans offered by BFS Capital are not unsecured. While we do not hold personal assets as collateral, we have a security interest in the assets of the business that is backed by a personal guarantee. At BFS Capital, appraisals or specific assets are not a requirement nor do we require any specific amount, type or value of collateral.