Fora Financial Business Loans: 2023 Review
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Our Take
4.5
Pros & Cons
Pros
Cash can be available quickly.
Get a discount for prepaying.
No collateral required.
Low minimum credit score requirement.
Cons
Charges a factor rate that makes it more difficult to compare costs to other lenders.
Can’t build business credit.
Longest loan term is 15 months.
Full Review
Fora Financial, a New York-based online lender, offers access to small-business loans and merchant cash advances. Fora Financial may be a good fit for businesses looking for short-term working capital, as well as those that can’t qualify for traditional bank financing.
Although Fora offers large maximum loan amounts, they charge interest as a factor rate, which makes it difficult to compare costs to other lenders. In this review, we’ll focus on Fora Financial’s term loans.
How Much Do You Need?
Fora Financial is best for borrowers who:
Need fast cash. You can complete Fora Financial’s online application in just minutes and receive a decision within 24 hours. Once you’ve signed your loan agreement, you’ll have access to funds within 24 to 72 hours.
Don’t meet eligibility requirements of other lenders. Fora Financial has flexible business loan requirements compared to both traditional and other online lenders. To qualify, you only need a minimum of six months in business and a credit score of 500 or higher.
Want short-term financing for working capital. Loans from Fora Financial can be used for a variety of working capital needs, including managing expenses, buying equipment or inventory, managing cash flow and more. Repayment terms are available up to 15 months, which makes these loans a good choice for short-term needs.
Fora Financial loan features
Loan amount | $5,000 to $1.4 million. |
Estimated APR range | Fora quotes interest as factor rates — which range from 1.1 to 1.9. Rates calculate to an approximate APR of 15% to 40%. |
Fees |
|
Terms | Up to 15 months. |
Repayment schedule | Flexible payment options. |
Funding speed | Application approval within 24 hours. May take up to 72 hours to receive funds. |
Where Fora Financial stands out
Quick access to funds
Fora Financial can be a good option if you need access to fast cash. You can apply online by filling out a one-page application and uploading three months of bank statements.
Once your application is approved, you may be able to get funds in as little as 24 hours (but up to 72 hours). This time frame puts Fora Financial on par with other online lenders, such as Bluevine and OnDeck.
Prepayment discounts available
Fora does not charge prepayment penalties on its business term loans. In fact, the lender offers prepayment discounts to eligible borrowers.
Fora also gives you an opportunity to increase your amount of funding after you’ve repaid at least 60% of the original loan.
Flexible qualification requirements
Compared to traditional lenders, and even some online lenders, Fora Financial offers more flexible qualification requirements.
To qualify for a loan, you’ll need a minimum credit score of 500 and at least six months in business — making Fora a good option for startups and businesses with bad credit. The lender doesn’t require physical collateral, but may file a UCC lien on your business assets.
Plus, Fora does a soft credit pull when you apply (which does not impact your credit). The lender only performs a hard credit pull when you fund.
Where Fora Financial falls short
No long-term financing options
Fora Financial only offers repayment terms of up to 15 months. If you need financing for a longer period of time, you might consider other online lenders, like OnDeck, who offers terms up to 24 months, or Funding Circle, who offers terms up to seven years.
On the other hand, if you’re looking for long-term financing and can qualify, a bank or SBA loan will likely offer the most competitive rates and terms.
Charges interest as factor rate
Fora Financial charges interest on its short-term loans as a factor rate. Factor rates are multiplied by your loan amount to calculate the total amount you’ll need to repay.
For example, say you have a 12-month, $10,000 loan with a Factor rate of 1.1. To calculate the total cost, you’d multiply $10,000 by 1.1 to get $11,000.
Factor rates can be difficult to understand and make it harder to compare loan costs with other lenders. You should always convert your factor rate into an APR to get a better sense of your borrowing costs.
Can’t build business credit
Fora Financial does not report payment history to the commercial credit bureaus. To build business credit from timely payments, you’ll need to find an alternative product.
Building business credit can help you qualify for larger business loans with lower interest rates in the future.
Fora Financial loan requirements
Fora Financial’s minimum borrower eligibility requirements include:
Credit score: 500 or higher.
Time in business: Six months or more.
Annual revenue: $144,000 (at least $12,000 in gross sales per month) or higher.
Fora also requires that you don’t have any open or dismissed bankruptcies within the last year. You must be in an eligible industry to qualify.
Alternatives to Fora Financial
OnDeck
OnDeck offers short-term business loans of up to $250,000 with longer repayment terms than Fora Financial — up to 24 months. Similar to Fora, OnDeck offers a streamlined online application and funding as quickly as the same day you’re approved.
To qualify, you’ll need a minimum credit score of 625 and at least one year in business. Compared to Fora, however, which requires a minimum annual revenue of $144,000, OnDeck only requires $100,000.
Funding Circle
If you’re an established business with good credit, you might consider Funding Circle to access lower interest rates and longer repayment terms. Funding Circle offers loans up to $500,000 with repayment terms up to seven years.
The lender can provide funding in as little as three business days, but requires that you have a credit score of 660 and at least two years in business to qualify. Interest rates on Funding Circle loans range from 5.99% to 16.49%.
Compare business loans
If you’d like to compare loan options, NerdWallet has a list of small-business loans that are best for business owners. All of our recommendations are based on the lender’s market scope and track record and on the needs of business owners, as well as rates and other factors, so you can make the right financing decision.
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Find the right business loan
Frequently asked questions
Fora Financial says it has issued $3 billion in business financing to over 35,000 companies since its founding in 2008. The lender has been accredited by the Better Business Bureau since 2011, where it has an A+ rating.
Yes. Fora Financial is a direct lender of its business term loans and merchant cash advances.
No. Fora Financial does not report to the consumer or commercial credit bureaus. As a result, your payment activity on a loan from Fora will neither hurt nor build your credit scores.
