Fora Financial

Fora Financial

Fora Financial
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About Fora Financial

Fora Financial is a direct lender that provides working capital to small and medium-sized businesses. It may be a good option if you need a business loan for bad credit, as it generally accepts scores as low as 570. But beware of origination fees and high interest rates.

Pros & Cons

Pros
  • Rapid funding
  • Accepts credit scores as low as 570
  • Prepayment discounts
  • Borrow up to $1.5 million
  • No usage rules
Cons
  • May find better rates and terms elsewhere
  • Charges an origination fee
  • Exact costs are unclear

Our editor’s take on Fora Financial

Fora Financial offers a valuable service for businesses in need of quick funding or those that might not qualify for traditional loans. Its flexibility and high loan limits are significant advantages. But potential borrowers should carefully consider the higher costs associated with its products.

Before committing to a loan or advance from Fora Financial, review the full terms, understand the total cost of borrowing (including all fees and the interest or factor rate) and consider how this fits with your business's financial situation and ability to repay. Compare offers from multiple lenders to ensure you're getting the best deal for your particular needs.

Fora Financial products

Fora Financial offers two main types of business financing products: revenue advances and small business loans. Both products are ideal for businesses that need fast working capital to expand, buy equipment, manage cash flow and more.

Revenue Advance

Fora Financial’s Revenue Advance product is similar to an MCA, which bases your payments on a percentage of future revenue. It works like this: Fora Financial provides you with a lump sum. Then you pay back a fixed percentage of your daily or weekly sales until the advance is all paid off. So, if you made $5,000 one week, you might pay $500; if you made $10,000 the next week, you’d pay $1,000.

The Revenue Advance is available for amounts of $5,000 to $1.5 million. Repayment terms are based on credit card sales, with daily or weekly payback plans.

Revenue Advances may be ideal for growing businesses with unpredictable cash flow, but the interest rate may also be higher because Fora Financial is taking on more risk.

Small Business Loans

Fora Financial’s small business loan is a traditional term loan in which you receive a lump sum of capital and pay it back with interest over a set period.

Loan amounts are $5,000 to $1.5 million, and repayment terms range from four to 18 months. The interest rates may vary based on your business's financial health and creditworthiness.

Fora Financial rates

Fora Financial's rate structure is based on a “factor rate system,” which is typical for merchant cash advances and some types of business loans in the alternative lending space.

These rates typically range between 15 cents and 40 cents for every dollar you borrow. Fora Financial has early payback provisions, which can reduce your factor rate to as low as 10 cents for every dollar.

For example, suppose you borrow $10,000 from Fora Financial.

  • If the factor rate is 30 cents on the dollar, the total amount you would owe is calculated as follows: $10,000 (principal) + ($10,000 * 0.30) = $10,000 + $3,000 = $13,000.
  • If you’re able to pay back early and qualify for a reduced factor rate of 10 cents on the dollar, the calculation would be: $10,000 (principal) + ($10,000 * 0.10) = $10,000 + $1,000 = $11,000.

As you can see, the cost of borrowing can vary significantly based on the factor rate you’re offered and whether you can take advantage of early repayment options. This rate structure is different from typical interest rates, so consider the total repayment amount and how it fits into your business's budget.

Fora Financial fees

Fora Financial doesn’t have any prepayment penalties, so you’re not dinged if you pay your loan off early. In fact, in some cases you can qualify for a rate discount by prepaying.

However, it charges an origination fee that can be “as low as 2.5%.” Origination fees are common in the business loan space and are typically deducted from the loan amount before it’s disbursed to you. Fora Financial’s website doesn’t clearly disclose just how high this fee can go.

Also, there may be other fees depending on the specific loan product and terms, such as late fees. Review your loan agreement carefully to understand all applicable fees.

How to apply for a Fora Financial loan

To be eligible for a Fora Financial loan, you’ll need to meet the following criteria:

  • 570 FICO score
  • $20,000 in monthly revenue
  • 6+ months in business
  • No open bankruptcies

If you meet this criteria, you can apply for a Fora Financial loan by filling out an online application. You’ll then have a short consultation with a capital specialist to discuss your funding options. You can get a decision within four to 24 hours and receive funds within 72 hours.

If you run into issues or have questions, you can call customer support at 877-419-3568.

How does Fora Financial compare?

Fora Financial offers competitive borrowing options, but its products might not be suitable for every business. Here’s how its small business loan stacks up against Bank of America’s term loan and Bluevine’s line of credit.

Fora Financial FAQ

How do you qualify for a Fora Financial loan?

You may qualify for a Fora Financial loan if you meet these qualifications: at least six months in business, a minimum credit score of 570 and a minimum of $20,000 per month in gross sales.

Is Fora Financial a direct lender?

Yes, Fora Financial is a direct lender. This means it finances its own loans without needing to go through a third party.

Does Fora Financial do credit checks?

Yes, Fora Financial does credit checks. It will perform a soft credit inquiry when you submit your application and a full credit check once you’re approved.

Is Fora Financial legit?

Fora Financial is a legitimate company operating in the alternative lending space. It was founded in 2008 and says it has provided more than $4 billion in funding to over 55,000 businesses across various industries. This significant amount of funding demonstrates its capacity and reach in the small business lending market. To date, there have been no widely reported legal actions or scandals involving Fora Financial.

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Fora Financial Company Information

Company Name:
Fora Financial
Website:
www.forafinancial.com