BFS Capital Reviews - Financial Lender Pros & Cons
- Small business loans
- Merchant cash advances
- Funding access in as little as 2 business days
- Lends to high-risk industries
- Provides an online portal for customers to view statements
- Doesn't lend to new businesses
- Less flexible than other short-term lenders
- Charges both documentation and origination fees
What businesses is BFS Capital best for?
Established companies seeking funding for growth or in need of working capital to cover expenses during tough times may be able to obtain a fast loan from BFS Capital. The lender also extends capital to businesses in industries often passed over by banks.
Created when its parent company, Business Financial Services, consolidated its partners Premium Capital Group, GBR Funding and Entrust Merchant Solutions in 2015, BFS Capital now provides fast-cash loans to companies across the U.S. and Canada. Business Financial Services was originally founded in 2001 and is one of the older short-term loan providers in the industry. The company now has its headquarters in Coral Springs, Florida and operates other offices in New York and California, giving it a solid presence in prominent parts of the country.
According to its website, the lender has extended over $1.75 billion in funding to small- and mid-sized businesses and is willing to work with companies in more than 400 industries. Funding is provided in the form of short-term small business loans and merchant cash advances, both targeted toward entrepreneurs in need of working capital but lacking either the qualifications or the time for traditional bank loans.
BFS Capital provides some information for merchants wondering if they can qualify for a loan, but not all the details are available on the lender's website prior to applying. Basic requirements include:
- Minimum FICO score of 550
- 2 years in business for small business loans
- 9 months in business for MCAs
- MCA applicants must accept credit cards
- $100,000 per year in revenue for small business loans
- $80,000 per year in revenue for MCAs
- Minimum of 7 deposits per month, totaling at least $10,000
- Minimum $1,5000 average daily balance for small business loans
- Maximum of 3 negative ending days per month
Merchants meeting these qualifications must also provide BFS Capital with proof of 50 to 51 percent ownership instead of collateral as a guarantee to back up a loan.
Requirements for both types of loans are fairly stringent. In contrast with other lenders in the fast-cast market, BFS Capital doesn't base its advertising on flexibility in terms, rates or payment structure. Instead, this lender seeks to work with companies showing enough financial strength to support the amounts for which they apply and to help these companies use the funding to achieve their goals.
Merchant Maverick reports businesses with strong criteria may be able to obtain as much as $2 million from BFS Capital, but this fact isn't advertised on the lender's website. Whatever the size of the loan, customer feedback suggests BFS Capital doesn't hesitate to refuse funding to companies failing to meet their qualification requirements.
Fast-cash lenders typically cater to industries considered high-risk by banks, credit unions and other traditional funding providers. BFS Capital emphasizes its willingness to lend to these types of businesses and provides an extensive list of the industries with which they work:
- Beauty salons
- Car washes
- Clothing stores
- Day spas
- Dental practices
- Entertainment industry
- Fast food
- Gift shops
- Liquor stores
- Medical practices
- Nail salons
- Pet stores
- Retail and seasonal businesses
- Seasonal Businesses
- Sports camp
- Veteran- and women-owned businesses
Merchants wishing to learn more about how BFS Capital handles loans specific to their industries can visit the lender's Industries We Finance page for details on uses and benefits. Not all industries have accompanying articles, however, and some of the links on the site currently lead to error pages instead of content.
Such errors and omissions are an unfortunate feature of BFS Capital's website, which provides a great deal of content without much in-depth information. Merchants may have to contact the lender directly for full details on the loan process.
"Non-preferred" industries, such as trucking and construction, must show $100,000 per month in deposits to be considered for funding.
BFS Capital offers typical term lengths on its small business loans. Payback periods range from 4 to 18 months, and although the lender doesn't specify how terms are determined, the amount of time a merchant is offered is usually based on the strength of a company's financial profile. Payment for small business loans is deducted daily as a fixed amount via an ACH.
Terms for merchant cash advances are less rigid due to the nature of repayment. Because merchants pay with a percentage of daily credit card sales, loans are paid back faster when business is booming and more slowly during slumps. BFS Capital is willing to be flexible in these situations.
What's Required to Apply
Merchants looking for funding can get started from any page on the BFS Capital website by entering the desired loan amount in the "Get Business Financing" box. Submitting the form directs merchants to a basic online application asking for:
- Applicant's name
- Email and phone number
- Business name and type
- Time in business
- Monthly gross sales
Clicking the "apply now" link in the website footer brings up the same pre-approval application. After providing this information, access to the full loan application and a general authorization form is granted so that merchants can provide the documentation necessary to complete the funding process.
Filling out the application as soon as possible and emailing or faxing it back to BFS Capital expedites the funding process by telling the lender:
- Business name and DBA
- Business address
- Complete business contact information
- Tax ID number
- Monthly credit card sales
- Total monthly sales
- Annual gross sales
- Desired funding amount
- How funding will be used
- Current outstanding loan balances from other lenders
- Names and contact details of owner(s)
In addition to a completed and signed application, BFS asks merchants to send the previous three months' worth of bank statement and, when applying for an MCA, four months' worth of debit and credit card statements.
Applying for loan amounts greater than $100,000 requires more detailed documentation. Merchants seeking large loans must be prepared to provide profit and loss statement and balance sheets for the previous year along with interim financial statements for the current year.
Upon receiving all necessary documents, funding advisors at BFS Capital review the applicant's qualifications and offer a quote via either email or a phone call. The process is fairly straightforward, but despite promising approval in as little as one business day and funding in as little as two, the lender doesn't provide a lot of information about how the approval process works. Some merchants have reported multiple hard credit checks on their accounts, although BFS Capital denies the practice.
The speed of the application and approval process from this lender depends on how quickly documentation is received. No offer can be made without all the required paperwork, and pre-approval doesn't guarantee a full loan will be provided.
Fees for both types of loans from BFS Capital are calculated using buy rates instead of a percentage. Rates range from 1.2 to 1.4 and apply to the full amount of the loan prior to any documentation or origination fees being deducted.
Before accepting an offer, merchants should carefully consider how much additional money will have to be paid back on top of the principal. BFS Capital's qualifications are likely to exclude companies with histories of serious cash flow problems, but since the lender does consider high-risk industries and applicants with less-than-perfect credit, there could be the risk of defaulting if payment obligations aren't understood up front.
A business taking out a loan of $125,000 would be expected to pay back between $150,000 and $175,000 depending on the buy rate for which it qualified. This amounts to 20 to 40 percent more than the principal of the loan, other fees excluded. Merchants expecting more working capital to come in through other channels in the near future may have no problem keeping up with payments, but those without a reliable source of cash aside from loans may be better off considering another option.
While some fast-cash providers will allow businesses to hold loans from other lenders, BFS Capital doesn't support this practice. As a first-position lender, they will refuse to grant renewals to companies that stack loans. BFS considers stacking a breach of contract and will cite it as grounds for automatic disqualification.
Merchants already under obligation to other lenders when they apply to BFS Capital have the option of allowing the company to pay off up to two balances. However, the applicant must net 50 percent of the proceeds on the loan for which they're applying to have a single balance paid off. For two balances, the net amount is 75 percent.
Depending on the amount of funding for which a merchant qualifies, BFS Capital charges a fee of $275 to $475 to process the documents necessary for approval.
A 1.5% origination fee is deducted from the principal of loans from BFS Capital.
Occasionally, merchants may need to take out additional funding before their first loan with BFS Capital is paid in full. Due to the lender's no-stacking policy, the preferable way to obtain more working capital is to renew the existing loan. BFS Capital will consider renewal once 50 percent of a loan is paid off, but applicants must keep in mind renewals will carry a fresh burden of fees from the associated buy rate.
As is common with fast-cash lenders, BFS Capital doesn't extend interest forgiveness to merchants, and no early prepayment incentives are available. Merchants are expected to cover all fees regardless of how quickly the full loan amount is repaid.
The loans obtained from this provider may be used for any business purpose, including:
- Funding growth
- Covering expenses while waiting for an expected increase in cash flow
- Purchasing inventory before a seasonal rush
- Upgrading equipment
- Buying new buildings or property
BFS Capital encourages merchants to put the money toward any one of these endeavors, highlighting the importance of business owners being able to realize the dreams they have for their companies.
The majority of the positive reviews for BFS Capital are found on Trustpilot, where the company holds a rating of 9.7 out of 10. Other ratings are more moderate, including 3.7 out of 5 on the BBB website and 3.5 out of 5 in a review by Merchant Maverick.
Customers praising BFS Capital cite quick delivery of funds and good customer service as the lender's standout features. Specific customer service representatives are noted for being helpful and the company as a whole easy to deal with. Businesses having positive experiences report the funding they received from BFS was able to help them grow and reach their goals.
Negative reviews and complaints cover a range of problems merchants have had with this lender:
- Slow service
- Expensive loans
- Hidden fees
- Deducting extra payments
- Negligence in paying commissions to ISO partners
- Running unnecessary or excessive credit checks
- Very low loan offers despite good qualifications
A review by Best Company echoes Merchant Maverick in its criticism of the lack of transparency on BFS Capital's website, and the only feedback provided by Google and Yelp is one negative review on each platform. However, the company is very responsive to customers' complaints and works to resolve issues whenever possible.
Licenses & Accreditations
BFS Capital lends to businesses in all 50 U.S. states and across Canada, providing companies throughout North America with short-term funding options. The lender has been accredited by the BBB since 2003 and currently holds and A+ rating based on performance, responsiveness and customer reviews.
Company Contacts Details
- Michael Marrache, CEO
- Robert Solarana, CFO
- Tom Holgate, COO