Kapitus Review

Pros and cons

Pros

• Quick and easy application process
• Approval within four hours
• Funding in the bank as fast as 24 hours
• Multiple repayment options to choose from

Cons

• Must be in business for at least two years
• Doesn’t build business credit (borrower may be able to self-report to credit bureaus)
• Higher rates and fees

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Loan offerings through Kapitus.

Kapitus provides a range of loan products, including revenue-based financing, designed to fit the diverse needs of small and medium-sized businesses. This review will focus on Kapitus’ revenue-based financing option, which allows companies with consistent revenue streams to borrow against future earnings. It’s a great solution for businesses looking for flexible repayment terms that align with their income flow.

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Things to consider.

Expedited turnaround time for financing.

Kapitus provides approval decisions within four hours and funding as soon as 24 hours after approval. This quick access to funds makes it an excellent option for business owners needing to respond rapidly to market demands or unexpected challenges. Whether it’s capital for inventory, expansion, or bridging a cash flow gap, Kapitus’ quick funding times enable businesses to keep moving forward without significant delays.

A range of fees to consider.

Revenue-based financing from Kapitus comes with a few different fees that may apply, depending on the amount your company borrows.

• Either a $20 ACH fee or a $50 wire transfer fee
• A flat $395 origination fee for contracts under $15,000
• An origination fee of 2.5%, if the funded amount is over $15,000
• A $25 fee to pay off an existing loan product from a competitor

The origination fee is subtracted from your funding before it’s deposited into your account.

Stricter requirements than other online lenders.

While Kapitus offers a relatively easy path to funding for many businesses, it’s important to note that it has stricter eligibility requirements compared to some other online lenders. To qualify for revenue-based financing with Kapitus, firms must have been operational for at least two years and have a minimum annual revenue of $250,000. This criterion can be a barrier for newer companies in their early growth stages. A minimum 650 credit score is also required, which is higher than other lenders’ credit score requirements. Businesses should carefully evaluate these requirements before applying to ensure they meet the baseline eligibility criteria, thus saving time and focusing resources more efficiently.

Flexible repayment options.

Kapitus offers daily, weekly, or monthly payments, and the amount isn’t fixed. Instead, you have a few options for how to repay the funds.

• Set up fixed ACH payments that deduct a percentage of your anticipated sales directly from your bank account. You can choose daily, weekly, or monthly payments with this option.
• Split credit card payments with Kapitus as a percentage of sales. This option only allows for daily payments.
• Enroll in variable ACH payments based on daily revenue.

For some businesses, such frequent repayments may restrict their cash flow and ability to cover operating expenses. But if you have a solid revenue with customers paying regularly, then it may be worth considering revenue-based financing from Kapitus.

Doesn’t build business credit.

One aspect of Kapitus that borrowers must weigh carefully is its impact on building business credit. Unlike traditional loans which are commonly reported to credit bureaus, thereby assisting businesses in establishing and improving their credit history, Kapitus does not automatically report loan activity. However, businesses do have the ability to self-report their payment history to credit bureaus. While this requires an extra step on the part of the borrower, it presents a unique opportunity for businesses to manage and enhance their credit profiles. 

Excellent customer reviews.

Kapitus reviews on third-party websites are glowing. On Trustpilot, the lender has earned 4.7 out of 5 stars. Individual comments include praise for the lender’s great communication process and fast funding times.

Evaluation

Kapitus is best for:

• Businesses with immediate funding needs. Given its quick turnaround time from application to funding – as fast as 24 hours – Kapitus is ideal for businesses that need urgent access to capital to take advantage of fleeting opportunities or to address unexpected costs.
• Companies with fluctuating revenues. With its revenue-based financing option, Kapitus offers a flexible repayment structure tailored to a business’s cash flow. This makes it a good choice for businesses with seasonal sales patterns or varying monthly revenues.
• Experienced businesses seeking growth funding. Since one of the requirements is being operational for at least two years, Kapitus caters well to established businesses that are looking to scale and have a solid track record.
• Business owners with fair to good credit scores. With a minimum credit score requirement of 650, Kapitus is accessible for owners with fair to good credit histories who may not qualify for traditional bank loans but want competitive financing options.

Where Kapitus might fall short:

• Higher cost of financing. Compared to other lending options like traditional bank loans, the overall cost of financing through Kapitus, including fees and interest rates, may be higher. This could impact the long-term affordability of some businesses.
• Narrow focus on revenue-based financing. Businesses looking for a broader range of financial products may find Kapitus’s focus on revenue-based financing limiting.
• Stricter business and revenue requirements. The requirement for businesses to have been operational for two years and meet a minimum annual revenue threshold may exclude newer or smaller businesses that are just starting out or experiencing slower growth.
• Indirect credit building. Since Kapitus does not automatically report to credit bureaus, businesses looking to improve their credit score through their financing activities might need to look elsewhere or take additional steps to report their payment history themselves.

How to apply for financing from Kapitus through Lendio.

Applying for financing through Kapitus via Lendio is a streamlined process designed to connect your business with the funding it needs with minimal hassle. Lendio is a small business loan marketplace with multiple lenders that will help match small businesses with loans that suit their unique needs. Here’s how you can get started:

1. Complete Lendio’s online application form: You will need to fill out a brief online application on Lendio’s website. The form asks for basic information about your business, such as its name, how long it’s been in operation, your monthly revenue, and the amount you’re looking to borrow.
2. Documentation submission: Alongside your application, you will be asked to submit documents that verify your business’s financial standing. These could include recent bank statements, income statements, balance sheets, and tax returns. Having these documents ready in advance can speed up the process.
3. Review and acceptance: Once your application is submitted, Lendio will match you with potential lenders that fit your needs. If Kapitus is a good fit for your financing requirements, you will receive an offer outlining the loan terms. Review these terms carefully to ensure they align with your business goals and repayment capabilities.
4. Finalize the deal: If you decide to proceed with Kapitus, you will work directly with their team to finalize the loan details. This may involve additional verification steps or documents.

The bottom line.

Kapitus stands out as a solid financing choice for small and medium-sized businesses that prioritize quick funding and flexible repayment options. Its ability to offer significant amounts of capital, up to $5 million, with rapid turnaround times positions it as a notable player in the competitive field of online lending. However, the higher cost of financing and stricter eligibility requirements might not make it the perfect fit for all businesses, especially newer ventures or those with lower revenue streams.

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