Frequently Asked Questions

Have a question? SmartCap can help.

Businesses of all types and sizes can analyze the return to the business based on the total cost of the investment. To determine if a cash advance is right for your business, determine your return on investment (ROI). Short-term ROI can be calculated with a simple formula: return on investment (%) = net profit/total investment cost x 100.

Here’s an example: Business A takes a $20,000 cash advance which has a total cost of $26,000 and uses the money to add 20 new seats. Those new seats translate to $2,000 more profit a week or $104,000 more profit per year. Using the formula, the net profit is $78,000 ($104,000-26,000). So $78,000/$26,000 = 3.00 x 100 =300%. Business A has a 300% ROI after one year. You can learn more about ROI at investopedia.com.

SmartCap Funding often provides cash advances to small businesses that have been turned down by traditional lenders. We are more flexible than banks in terms of the types of business we will work with, the purpose for which the funds will be used, and in some cases, the credit history of the business and the owners of the business.

Unlike banks, SmartCap has greater flexibility when it comes to reviewing past credit experience. Past credit problems can typically be overcome by a demonstration of current business strength accompanied by a strong likelihood of continued good business trends. However, we do not enter into transactions with merchants who are currently (or about to become) involved in bankruptcy proceedings.

More than 60 percent of our customers repeat transactions with SmartCap Funding. In fact, the customers who have tested the competition usually return to SmartCap because of our honest approach. Growing your business is our business, and we’re happy to provide repeat transactions.

This is not a loan and there is no interest rate; we are a factoring company. If you compare our cash advance to a fixed rate commercial or SBA loan for an average of 5-6 years, we are actually charging you less. Further, SBA and Commercial loans are very difficult to obtain, they can take up to 2 months to fund, they show up on your credit report, they are very long-term commitments and most importantly, they ask for collateral. Most cash advances are approved within a week’s time giving you the cash you need now, have a 6-8 month commitment, no collateral is required, high approval rate, and we get paid only when you get paid. Most loans require a fixed monthly payment. SmartCap Funding collection amounts fluctuate based on your sales volume. This percentage-based collection policy allows the advance to support your business’ success rather than drain its funds.

The general minimum qualifications for an MCA are:

6 months in business

$50,000+ in annual revenue

500 minimum credit score

Factor rate: A calculation that helps you determine how much money you will pay back in total.

Holdback rate: The percentage of your daily credit card sales that an MCA provider will take until you pay back what you borrowed (plus fees).

ACH MCAs: Like a normal MCA, except your lender withdraws a fixed daily or weekly amount from your business bank account—not a percentage of your sales.

Are there any restrictions on how the funding is used? When it comes to a merchant cash advance, this is a trick question. The answer is, no. The money can be put toward any business-related expenditure.