Finance Factory Business Loan Review
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Pros and cons of Finance Factory
Pros | Cons |
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Many different financing types Low rates for well-qualified buyers Many options for newer businesses | May charge high fees Not a direct SBA lender May have prepayment penalties Options can be confusing to sort out on your own |
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Finance Factory small business loans review
Finance Factory is a type of online marketplace for small business loans and financing. It doesn’t offer any loans directly itself, but it does have a network of partner lenders that it can match you up with. As such, there are many different options available for all kinds of applicants, such as SBA loans, merchant cash advances, equipment financing, business credit cards and more. These may also change frequently as individual lenders revise their offerings, and watch out for some of their financing choices which may come with high fees or prepayment penalties.
Who is the Finance Factory for?
- You want to stick with a reputable company. Finance Factory reviews and ratings from actual customers are generally positive.
- You need help deciding on the right solution. Finance Factory can help advise you on the best option for your business needs and act as a go-between for you and the actual lender in its network.
- You want to stick with one company for all funding needs. Finance Factory offers most of the funding solutions you’ll likely need, although you may pay a higher price than if you’re willing to shop around for the best interest rate each time.
Finance Factory small business financing at a glance
Product | Loan amounts | Repayment term | Estimated rate range | Fees |
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Startup funding | $5,000-$350,000 | 36-120 months | 0% for the first 21 months, then 15.00% | 4.50%-9.90% |
SBA loan | $30,000-$5,000,000 | 120-300 months | 6.50%-8.75% | 1.00%-5.00% |
Merchant cash advance | $5,000-$1,000,000 | 6-60 months | Factor rate: 1.14-1.50 | 1.00%-10.00%, and may carry a prepayment penalty |
Equipment financing | $5,000-$5,000,000 | 24-84 months | 6.00%-30.00% or higher | 1.00%-12.00%, and may carry a prepayment penalty |
Franchise loan | $75,000-$300,000 | Up to 300 months | Variable, calculate as Prime Rate plus 2.75%-3.75% | 4.50%-9.90% |
Real estate loan | $50,000-$5,000,000 | Up to 360 months | Varies | Varies |
Startup funding
If you’re a startup business looking for funding, Finance Factory offers several options, including business credit cards and unsecured term loans and business lines of credit. Finance Factory ‘s lender fees for its startup funding are quite high, but if that doesn’t bother you, it offers an extra-long zero-interest period. This can be a good time to finance a large purchase because if you’re diligent about paying it off before the 0% interest period is done, you’ll basically be getting an interest-free loan. Finance Factory markets these credit cards to newer business owners looking for startup funding.
Merchant cash advance
A merchant cash advance (MCA) is an alternative form of business financing that provides a lump sum upfront in exchange for a portion of future credit card sales. Businesses facing seasonal drops in sales may find it helpful, though MCAs charge factor rates, which can be expensive. Finance Factory offers both an MCA and a “revenue-based loan” that scale according to your cash flow. This carries the same terms but is structured more like a traditional loan, albeit for a smaller loan amount and monthly payment.
Equipment financing
If you need to purchase or lease new or used equipment for your business, such as trucks, construction vehicles or even just office chairs, Finance Factory can help you with its equipment financing. You’ll be able to finance the cost of the equipment over its estimated lifespan, which ranges from 24 to 72 months for most equipment. For certain larger pieces of equipment, excluding trucks, you may be able to finance it out to 84 months. Funding is also relatively quick, available in as soon as 48 hours. The downside is that if your business does well and you want to pay off your debt early, there may be a fee for doing so.
SBA loan
Finance Factory ‘s partner lenders offer two types of SBA loans: the traditional, general-purpose SBA 7(a) program, and the larger SBA CDC/504 program for bigger needs, like commercial real estate. Heads-up: its partners are not preferred lenders so funding may take a bit longer than with a preferred SBA lender. However, you can still expect to receive your funding in as little as seven days, if you’re approved.
Franchise loan
If you’re running a franchise business, a franchise loan from Finance Factory ‘s partners may be able to help you grow. According to a company rep, you stand the best chances of approval for a franchise loan if you’ve already been in business for at least two years, so this wouldn’t be very ideal for someone getting started from scratch with their first franchise business.
In addition, keep in mind that unlike most term loans, this one charges a variable rate. In today’s rising interest rate environment, that means you could be signing yourself up for bigger payments than you bargained for. In addition, funding time is rather slow for this option, taking between 30 and 45 days.
Commercial real estate loans
In addition to the SBA commercial real estate loans that Finance Factory can help hook you up with, it also offers a wide range of other types of commercial real estate loans and lines of credit. Its partner lenders offer options for rental real estate loans, fix-and-flip loans and lines of credit, bridge loans and cash-out refinances. Given such a wide range of real estate financing options, it’s impossible to generalize the rates and fees for each one and so you’ll need to make sure you’re doing your due diligence in getting a good deal for your credit profile.
Finance Factory borrower requirements
Finance Factory is quite open about what you’ll need in order to apply for a business loan or lines of credit. The borrower requirements are generally lower than for many other lenders. For example, you may be able to get a business credit card or even a real estate loan before you even open your doors for business at all, although you’ll still likely stand better chances of approval if you’ve already demonstrated your business’s ability to earn income.
Minimum annual revenue | Minimum annual revenue 1 |
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Minimum annual revenue |
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Minimum time in business |
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Minimum credit score |
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Required documents
The specific documents you’ll need depend on the type of funding you’re applying for, and the business financing requirements of the individual lender that Finance Factory is matching you with. Here’s a sample of what you might expect, however:
- Business plan
- Copies of your driver’s license
- Recent business and personal tax returns
- Three months of recent business checking account statements
Alternatives to Finance Factory
Finance Factory | Fora Financial | Chase business loans | |
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Minimum credit score |
| 500 | Not disclosed |
Loan products offered |
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Time to funding | Seven to 10 days on average for most financing, two days for equipment financing, but up to 45 days for some financing such as real estate loans | Three days | Not disclosed |
Starting rate | 6.00% | Factor rate: 1.10 | Not disclosed |
Maximum loan size | $5,000,000 | $1,500,000 | $12,500,000 |
Minimum annual revenue | None | $60,000 in credit card sales or $144,000 among all transactions combined | Not disclosed |
Finance Factory vs. Fora Financial
If you have credit challenges, Fora Financial may be even more forgiving than Finance Factory . The downside is that it only offers two financing options: term loans or merchant cash advances (MCAs). The loans don’t operate like you might expect either — you’ll make daily or weekly payments instead of monthly payments as per usual. It’s also on the expensive side, with many fees rolled in and a strange factor rate that also applies to the loans, not just the cash advances. When you do the math, you’re looking at a rate range of 17.00% to 200.00% for Fora Financial‘s loans.
Finance Factory vs. Chase
If you’d rather stick with a more well-known lender that offers physical branch locations, there’s always Chase Bank. It’s the largest bank in the country, after all, and like most big banks it’s rather tight-lipped about its fees, rates and borrower qualifications. It is also a lender in its own right so if you check your options with Chase Bank, you’ll only be getting financing offers from Chase itself, rather than a network of lenders like with Finance Factory .