Small business owners who need quick funding for business loans might be interested in Kapitus. The lender offers a fast approval process, quick funding, and a wide range of financing products.
However, it might not be the right fit for every business. In this review, we’ll help you decide if Kapitus is a good option for your business needs by going over how its loans work, the costs involved, and their benefits and drawbacks.
Specifically, we’ll answer these questions and more:
Kapitus is an alternative lender providing small business financing online. The company is a direct lender but also partners with a lender network to provide a broad range of small business loans and financing solutions.
Kapitus specializes in quick approvals and fast funding times, like many online lenders. If everything is in order, Kapitus can approve loans in as little as four hours and fund loans 24 hours after approval.
The lender launched in 2006 as Strategic Funding Source. It rebranded as Kapitus in 2019 to unite its funding and service brands. According to its website, the lender has provided more than $4 billion in capital to over 67,000 businesses.
Small business owners can find a loan to cover just about any operational or strategic need with Kapitus. The lender provides access to many business loans and financing products.
Here are the details on the different lending products available.
Kapitus offers working capital loans to help cover everyday expenses like payroll or covering rent. Instead of an interest rate, Kapitus charges a flat factor rate between 1.12 and 1.26. To find the interest on a factor rate, multiply the loan amount by the factor rate. For example, if you borrowed $500,000 at a 1.15 factor rate, the total repayment amount is $575,000. That means you’d pay $75,000 in interest.
Kapitus working capital loans are short-term, meaning they must be repaid within 18 months. Terms start at 4 months. The factor rate and term length you receive depend on your loan amount, credit profile, and business financials.
You can use a Kapitus equipment loan to acquire various business equipment for a wide range of industries, such as farming, construction, manufacturing, medical and dental practices, restaurants, retail shops, and more.
Before applying, you need an invoice or official quote from an equipment vendor. You’ll include the invoice with your application. Kapitus sends the funds directly to the vendor to purchase the equipment if approved. Once it’s delivered, you pay Kapitus until it’s paid off.
Unfortunately, Kapitus does not provide rates on equipment financing. It lists its rates as “competitive,” but our research couldn’t determine if they use an APR, simple interest, or a factor rate. Ensure you check the cost of financing before signing an equipment loan agreement.
The Helix Healthcare Financing Program from Kapitus refers to various business financing options available for healthcare and dental practices. It includes term loans, equipment financing, business lines of credit, and more. Because of the different financing structures, the available loan amounts, rates, and terms differ.
SBA loans are the gold standard of small business financing. Kapitus provides access to SBA 7(a) loans, the most common loan type in the SBA loan program.
The US Small Business Administration (SBA) partially guarantees SBA loans, allowing lenders to offer large borrowing amounts at lower interest rates and longer repayment terms. The drawback is that it’s challenging to qualify, and the application process is arduous.
Kapitus attempts to streamline the application process to expedite approval and funding and take some of the guesswork out of applying. However, SBA loans always take longer to approve and fund than alternative loan structures.
In addition, Kapitus provides access to several alternative financing products, such as:
Like many online lenders, Kapitus cares more about your business performance and financials than traditional loan requirements like a credit score. However, you will still need to meet minimum credit score, time in business, and revenue requirements.
The minimum qualifications depend on the specific loan product. Here is the breakdown of the minimums you need to meet for each lending product available.
Working Capital Loans:
Helix® Healthcare Financing:
Line of Credit:
Purchase Order Financing:
In addition to meeting the minimum qualifications, your business must have the cash flow to support repayment.
The diversity of their loan products means that you can get financing for essentially any business purpose. But the lender’s most versatile and beneficial loans have the highest approval requirements.
Invoice factoring and revenue-based financing have the easiest approval requirements, but financing costs are usually higher than other loan products. While Kapitus provides access to long-term loans through the SBA loan program and medium-term loans, most financing products it offers are short-term loans.
All Kapitus loans carry an origination fee of 2.5% or $395, whichever is higher. However, the lender does not charge documentation fees.
Kapitus does not allow “stacking,” which is carrying multiple business loans simultaneously. If you currently have a business loan with another lender, you won’t qualify for a Kapitus loan.
Due to the number of loans available and the use of factor rates, it’s difficult to compare the costs of Kapitus business loans to other business lenders. The company claims its rates are competitive, but it’s challenging to verify how competitive they are without concrete numbers. Carefully read any loan agreement before signing it to ensure your business can handle repayments.
While Kapitus accepts businesses in most industries, it does restrict companies in the following sectors:
Applying for a Kapitus business loan is quick and easy, although some products require more information. Follow these steps to apply.
You can either complete the Kapitus application form online or call them to apply over the phone. Per the website, completing the online application only takes about 5 minutes for most lending products.
You might need to provide some documentation when you apply. It would be best if you were prepared to provide the following:
SBA loan applications will likely involve more in-depth documentation.
Depending on the loan product, you can get approval in as little as four hours after you apply. SBA loans will take considerably longer, usually a few weeks.
Kapitus can provide funding for most loan products within 24-72 hours. Some products like invoice factoring and PO financing take longer because of the extra parties involved.
Depending on the loan product, your repayment schedule will be daily, weekly, biweekly, or monthly. Monthly payments only occur for equipment financing and SBA loan products.
Kapitus funds some loans directly, while other loans go to one of their lending partners. If Kapitus financed the loan, you’d pay them directly. If the loan goes to one of its partners, you’ll pay that lender.
You’ll usually make scheduled payments via an automated clearing house (ACH) transfer. For invoice factoring, your customers pay the factoring company directly. You can set up revenue-based loan repayments as a daily percentage of your sales.
Kapitus does not charge prepayment penalties for loans it funds directly, but it doesn’t offer any interest forgiveness for early repayment. Its lending partners might have a different policy, so ensure you check the repayment process before signing a loan agreement.
Renewals are easy with Kapitus, and you can usually renew your loan once you’ve paid at least 50% of the current loan.
One of the main benefits of working with Kapitus is the company’s range of products. Because it combines direct lending and network lending, the company can facilitate most forms of business financing.
Small business owners can complete a loan application in about five minutes. The lender can approve some applications as quickly as four hours and fund some loans as soon as 24-72 hours. The ease of the application process and funding speed help businesses needing urgent financing.
Some Kapitus loan products accept business owners with low credit scores. Regardless of your credit score, you should be able to find at least one financing product that works for you.
While Kapitus provides some information on interest rates and fees, it doesn’t provide costs upfront. The only way to compare the costs of different loan options through the company is to apply and see what offers you get.
The origination fees for its loans are high compared to other lenders. Most short-term loan structures carry higher costs than more traditional long-term loans.
Kapitus loans typically require a personal guarantee from anyone who owns a majority share of the business. The lender also places a UCC blanket lien on business assets for loans over $5,000.
Yes, Kapitus is a legitimate lending platform. The Better Business Bureau (BBB) does not accredit the business, but it does have an A- rating with the watchdog organization. It also has a 4.3 out of 5 customer rating on BBB. The company is rated 4.8 out of 5 on TrustPilot, with more than 375 reviews.
Positive reviews talk about the ease of the application process and how quickly Kapitus secured funding. Some customers said they could get financing even with a low credit score.
One of the most common threads in Kapitus reviews is praise for its customer service. Multiple business owners mention their service representative by name and talk about how easy they made the process.
Like many lenders, reviews tend to be polarized whether users love them or hate them. The company’s positive reviews far outweigh it’s negative but let’s cover some negative comments.
Some users that rated the company low said that the cost of financing was too much. Most short-term and revenue-based financing structures are most costly than traditional loans.
Other users said they had trouble getting in touch with customer service or complained about being moved to one of the company’s lending partners. One of the more common complaints was that the company didn’t make its fees and rates clear.
One of the benefits of working with Kapitus is that the lender can usually provide a financing product for business owners with a low credit score. However, some of its products will require a higher credit score.
Also, you must meet the time in business and revenue requirements. Other issues that could trigger a denial include being in a restricted industry, cash flow issues, or already having a business loan.
If you applied to Kapitus and were rejected, the denial letter should explain why. If not, you could call them for more information.
Fortunately, there are plenty of lenders that offer similar small business loans. You could find lenders that provide any of the following:
Kapitus is a decent fit for small business owners with fair credit scores that need urgent financing. In addition, healthcare and medical practitioners can benefit from their unique healthcare financing program.
If you have a good to excellent credit score and can wait for financing, you can find less costly small business lending options. However, if you need fast funding and want to work with a lender that offers multiple loan products, Kapitus is a solid option.
Based on the diversity of loan products, customer reviews, and speed of approval and funding, we rate Kapitus as a 4 out of 5. The lender might not be the best option available, but it’s far from the worst.