FORA Financial Reviews - Financial Lender Pros & Cons
- Short-term working capital
- Merchant cash advance (MCA)
- Provides funding within 24 hours of approval
- Considers high-risk industries
- Uses a technology-driven process to determine the best loan structure
- Higher-than-average rates
- Charges an origination fee
Who should use FORA Financial?
Small businesses requiring a quick infusion of funds without the need to meet stringent qualification requirements and those preferring flexibility in funding and repayment options may benefit from a FORA Financial loan.
Founded in 2008 in New York City as Paramount Merchant Financing, FORA Financial aims to "foster and support the small business industry" by providing personalized funding solutions to diverse types of merchants. With its offerings of short-term working capital loans and merchant cash advances, FORA Financial works within the changing financial market to bring the most relevant form of funding to each applicant. To date, the lender has provided over $850 million to more than 15,000 customers across industries.
Flexibility in " requirements, amounts and terms " sets FORA apart from traditional lenders and makes it possible for merchants in many different financial situations to obtain the funding they need to grow their businesses. Even industries with cash flows subject to seasonal fluctuations, such as construction and retail, can find funding solutions tailored to their unique circumstances.
Working capital loans provide funding in amounts ranging from $5,000 to $500,000 with approval in less than 24 hours and delivery of cash in 72 hours. Businesses can use the money to:
- Pay employees
- Renovate or expand locations
- Maintain adequate inventories or take advantage of cash discounts on bulk inventory
- Hire additional staff
- Buy updated equipment
- Launch new advertising campaigns
- Buy out a business partner
Other business-related uses of the funding, including paying back taxes or liens and paying off a judgment are also allowed so that FORA's customers have the freedom to apply loans wherever money is needed most. With terms up to 18 months, no need for collateral and the ability to earn prepayment discounts, loans from FORA Financial offer the flexibility small businesses require to succeed.
For companies making most of their income from credit card sales, FORA's merchant cash advances provide a lump sum advance paid back using a percentage of daily credit card transactions. These advances have no set terms and are available in the same amounts as working capital loans. Whether a company needs quick cash to replenish inventory or is ready to upgrade to the latest technology, a merchant cash advance may be the right financial tool.
Like most alternative business lenders, FORA Financial sets a minimum personal credit score requirement for merchants applying for loans. However, although the lender prefers applicants to have a FICO score of 600 or more, a lower score doesn't lead to automatic disqualification. The overall financial health of a business is more important to FORA than any single number, making it possible for businesses with poor credit but positive payment and cash flow histories to get the funding they need.
Still, FORA requires at least 6 months’ time in business and a maximum of four negative ending days per month in a business’ bank account.
FORA performs a soft pull credit check during the preapproval process, so anyone can check to see if their business qualifies without any negative effects on credit score. However, it's important to note the hard pull required to determine loan terms after a full application has been received may have a small impact on an applicant's total score.
Short-term loans, including those offered by FORA Financial, are often paid back in daily installments deducted via ACH from your business checking account, or as a percentage of the merchant's daily credit card transactions. However, FORA also offers the option of weekly payments to simplify budgeting and make loans more accessible to businesses unable to meet a daily obligation. Weekly payments are a boon to the working capital loan industry because many merchants feel turned off by the intrusive daily payment ACH withdrawls, making the weekly payment option far more appealing.
FORA also differs from many fast cash lenders in that they grant prepayment discounts to customers able to pay off loans before the end of the proposed terms. If a customer needs to renew, retention pricing makes this option cheaper than it may be with other lenders.
Lenders usually avoid extending funding to high-risk industries, but FORA Financial will consider working with some companies with fluctuating or unpredictable cash flows. Restaurants are listed among FORA’s serviced industries, but qualifying for a loan may necessitate meeting a stricter set of requirements. The same is true for retail companies in need of fast approval for working capital.
FORA will not grant loans to the following business types:
- Adult industries
- Auto sales, including boats and planes
- Law firms
FORA Financial's website emphasizes the company's dedication to providing funding to companies in a variety of industries. Some of these include industries to which traditional lenders are wary of extending loans, making FORA a viable option for merchants whose financial needs can't be met by local banks or credit unions.
FORA's full list of serviced industries includes:
- Auto repair and auto parts
- Medical business
However, they primarily focus on large trucking and construction deals.
Because FORA Financial aims to provide flexible loan structures and works with customers to create payment plans designed to support success, the company doesn't set term lengths in stone. Most merchants are given terms between 4 and 18 months.. Customers able to pay off a loan before the end of the term can save money with FORA's prepayment discount. Pre-paying a working capital speaks to the overall health of the business, as well as highlights the merchant's likelihood to pay back their next loan in a timely fashion. FORA, like their peers in the alternative lending industry prefer to work with customers that renew, which affords merchant with exceedingly better terms: longer amount of time to pay back the loan and lower rates.
What's Required to Apply
Merchants wishing to request funding from FORA Financial begin the process with a quick pre-qualification application. After receiving the applicant's name, the business name, monthly gross sales volume, time in business and basic contact information, FORA usually responds with approval within 24 hours.
Applicants must provide the following details about their business to apply with FORA:
- Business contact information
- Business financial information
- Business type
- When the business was established
- What products or services are offered
- Property details
- Owner name(s) and information
- Loan amount requested
- Intended use of the loan
- Amounts of outstanding loans or advances
In addition to completing and signing and application, FORA Financial requires merchants to:
- Be in business for at least 6 months at the time of application
- Provide the most recent 3 months of bank statements
- Make at least $10,000 in gross sales or process a minimum of $5,000 in credit card sales per month
- Have no more than 4 days per month with a negative closing bank balance
The person applying for the loan must also have at least 70 percent ownership of the company in order to qualify. No collateral or personal guarantee is required.
If funding is approved, the money is available within 72 business hours. This quick turnaround time is beneficial for companies dealing with short deadlines on growth opportunities or facing financial difficulties due to unexpected fluctuations in cash flow. Fast delivery of funds can mean the difference between carrying on and shutting down, and FORA Financial’s policy of considering multiple business factors when determining eligibility makes it possible for companies in shaky financial situations to receive funding.
As with the majority of short-term lenders, FORA uses an upfront factor rate instead of an interest rate spread out over the life of the loan. Factor rates are expressed as figures instead of percentages and indicate how much a merchant can expect to pay over and above the actual loan amount.
FORA Financial's factor rates range from 1.08 to 1.34. Multiplying the loan amount by the factor rate gives the total amount to be paid back. Instead of being calculated as percentage over time, factor rates are calculated once at the start of the loan and added to the principle. For example:
- $50,000 x 1.08 = $54,000
- $100,000 x 1.34 = $134,000
Taking the factor rate into account before entering into a loan agreement is essential, especially since it can add a significant amount to what a merchant owes. However, since FORA Financial also offers prepayment discounts, merchants that are careful with budgeting have the potential to minimize the expense associated with factor rates.
FORA Financial is primarily a first-position lender, meaning they prefer merchants to have no outstanding or concurrent loans at the time of application. In fact, the company advises against this practice, known as stacking, in a post on its blog, citing the potential financial pitfalls for businesses attempting to handle payments on multiple loans at the same time.
To maintain first-position status, FORA will pay off balances from competing loans as long as the merchant is able to net 50 percent of the proceeds for the financing requested. A second-position loan may be considered if a customer's deposit volume and daily ledger amounts show the payments can be supported.
However, FORA's view on stacking is largely negative, and the company encourages customers to obtain additional capital from a single lender rather than taking out separate loans. Frankly put, if a merchant has a working capital loan, but needs more money, they should go back to the original lender for funds. Searching for additional capital, or a stack, can expose the merchant to higher rates and shorter terms, potentially bankrupting the business.
No documentation or application processing fees are charged to merchants applying for loans from FORA. Working capital lenders that charge money upfront (before funding takes place) should always be avoided.
An origination fee is a percentage of the total loan amount charged at the time funding is granted. FORA Financial collects a 3 percent fee to cover costs associated with supplying the loan. Therefore, if a company qualifies for a $100,000 loan, $3,000 would be subtracted from the amount at the time of funding. Merchants seeking funding should consider the origination fee when budgeting for loan payments to ensure current cash flows are sufficient to support the required daily or weekly expenditure.
Customers may request a loan renewal as soon as at least 40 percent of the initial loan is paid off. Renewal requests require FORA to examine payment history, look over the merchant's last three months of business bank statements and ensure there has been no breach of the loan agreement. Remember, a stack is considered a breach of their loan contract. If a merchant stacks on their FORA loan, be prepared to explain why additional capital was sought out and why FORA couldn't meet that obligation.
If cash flow is favorable, payments have been made on time and customers aren't trying to stack loans, FORA is likely to grant a renewal. Improvements in credit score and other financial metrics may mean lower rates and a more favorable payment structure on the new balance.
Interest forgiveness isn't available on funding from FORA Financial because the company uses a factor rate and not an interest rate when determining fees for the life of the loan. This means any remaining fees from a previous loan must still be paid off if a customer requests additional funding or seeks to refinance.
However, FORA does offer prepayment discounts on their financial products, allowing customers to save money by paying back early regardless.
As long as the money is put toward business activities, FORA places no restrictions on the use of the funding it extends. Merchants are free to cover any type of expense from daily necessities to once-in-a-lifetime growth opportunities.
Customer ratings for FORA Financial range from average to excellent across major review sites. Yelp reviewers give the company 2.5 out of 5 stars, citing disappointment with the attitudes of staff members. Similar sentiments accompany the 3.8-star rating on Google. Other complaints include dissatisfaction with high interest rates and claims of FORA making it difficult for small businesses to pay off loans or qualify for refinancing.
Positive reviews, including 4.3 out of 5 starts on the Better Business Bureau (BBB) website and 9.4 out of 10 on TrustPilot, praise FORA Financial for quick delivery of funding, positive customer service experiences, helpful staff and providing financing to companies unable to obtain loans from traditional lenders.
On all review sites, FORA is responsive to customer complaints and inquiries, offering to contact reviewers to come to a resolution.
Licenses & Accreditations
FORA Financial holds a California Finance Lender License and has been accredited by the BBB since 2011. The company has been recognized four years in a row by Inc.com as one of the 5,000 fastest-growing companies in the U.S. and "continues to remain a competitive leader " in fast cash loans.
Company Contacts Details
- Main line: (212) 947-0100
- Toll-free: (877) 514-8062
- Customer service: (855) 326-8526
- (888) 722-3313
- Jared Feldman, founder and CEO
- Dan B. Smith, president and founder
- Andrew Gutman, CFO
14 User Reviews
Nov 7, 2019 12:28 PM
Needed a new grill for my restaurant. Got just the right financing from FORA Financials! Buying a new grill did not cost me a lot of time as I got the financing within 24 hours after completing necessary verifications. My new grill is looking great and sales are getting better with the introduction of newer dishes! Thank you Fora!Reply
Samara Gislason DVM
Apr 16, 2020 5:28 AM
i really appreciate the assistance i received from fore for my beach services company. Unlike banks, they deliver the credit instantly and they are much more reliable too. i have got flexible terms and an acceptable factor rate as opposed to the usual interest rates that banks offer which feel like a lot... i am very satisfied!Reply
Aug 20, 2020 9:32 PM
My experience with FORA had not been too good. They took too long to deliver the promised “instant” financing. There were just so many checks and verifications and documentation and the list is endless. I had a pretty reasonable credit history but still they did not seem satisfied. My company needed immediate financing which these guys clearly failed to deliver. Had to back off midway and find myself a better lender, which I did. They delivered the working capital I needed for cash flow within about 3 days. If you cannot provide actual instant financing, please don’t waste people’s time by your false advertisements and by alluring them with services that you clearly don’t have the capacity to deliver! Thank you very much!Reply
Sep 17, 2020 8:03 PM
I am sorry that you had to experience this, Amya. but I had quite the opposite contact with fora financials. I needed working capital to expand my little barbecue joint. Needed new and better equipment, hire more staff, refill the pantry, rent more space and so much. I contacted FORA through a friend and it turned out to be great! Received instant loan within a couple of days. The terms were pretty reasonable though the factor rate seemed a little a lot but given I had a somewhat unstable credit history, it felt fair. Also, they were not asking for any collateral or assurances, which is why I am grateful. Not many lenders offer you that. So, I really think fora delivers what they promise and I am thankful!Reply
Mr. Arely Gulgowski MD
Sep 29, 2020 7:49 PM
I wanted to expand my small restaurant and buy better equipment and hire more staff. Researched a couple of small business lenders online and shortlisted a few. Fora was one of them. I talked to these guys and instantly I knew I was going to choose Fora. The customer representative was not only professional but very friendly too. Just over the first conversation that could not have lasted for more than 10 minutes, they answered all my queries and roughly gave me a couple of options about what kind of credit would suit me and business. After a couple of meetings, verifications and other checks, I received the capital within 24 hours for a term of 8 months at 1.15 factor rate. Sounded pretty reasonable to me and it's working really well for me so far. I would totally work with these guys again and would recommend to other people too.Reply
Oct 2, 2020 6:52 AM
That is a rather reasonable factor rate. I wonder why did they charge me cost much?? What I got was pretty high, 1.31!! It was A LOT and felt like a rip off. I didn't trust the guys. Really felt like they were after my money with all their juicy sweet talk! I mean 1.31 is just unbelievable! I could find better usual interest rates from other lenders and I actually did! These people just wasted my time. Sorry, not for me!Reply
Mr. Arely Gulgowski MD
Oct 14, 2020 6:27 PM
Hello Kaden! Sorry to hear about your experience but I'm sure they had a reason for charging you this much. It could be a bad credit history, the amount you were looking for, how long have you been in business and of course your sales matter too among other things. Given, you fulfill certain conditions; they don't even require collateral or any personal guarantee. That is a pretty good deal, in my opinion!Reply
Nov 11, 2020 10:13 PM
You could be right but I did get a better deal from other banks and lenders, so, yeah, FORA is definitely not the best for me! Thank you for your reply though!Reply
Oct 26, 2020 3:32 PM
2020 had been too slow due to the global pandemic situation. Things were not working well for my banquet venue and restaurant. FORA FINANCIAL’s working capital loan provided the supported i needed to keep my business running. Despite the hard times and practically zero customers for months, my business still stood the recession. I was able to pay the staff on time, despite the declining revenue. Not many banks were willing to offer support in those adverse times and those who were willing, they had hard terms and shocking interest rates. FORA has been a savior!! Thank you so much!Reply
Mr. Finn Swift
May 11, 2021 11:56 AM
FORA has the awesomest team who work with you to find the BEST credit deal for your business! I own an IT consultancy firm and needed some support to hire new employees and more equipment. I must say I am very much happy with the deal I got. I recently hired a new guy and need to hire two more and so far, everything is going great! Highly recommended!Reply
May 26, 2021 9:31 PM
Review: 100% recommended! Keep it up FORA!Reply
Jun 9, 2021 4:23 PM
Truly one of the best lenders out there and I have worked with a lot of them. The services are exactly how they claim, the customer representatives are great and you get the amount immediately after a couple of necessary verifications! Thank you Fora!Reply