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Can Capital Business Loan Review

CAN Capital is an online business lender catering to small businesses that need quick access to financing up to $250,000. It requires just six months in operation to be eligible, making the lender an attractive option for newer business ventures.

The company, based in Kennesaw, Ga., began providing capital in 1998. Last year, it surpassed the $7 billion mark in total funding for small businesses.

If you’re thinking about applying for working capital from CAN Capital, continue reading to find out if it’s the right lender for your business.

What CAN Capital offers

Two working capital options are available through CAN Capital:

  • Short-term loans
  • Merchant cash advances

Both products can provide the same amount of funding, but the repayment process varies. Here’s a quick look at what’s offered:

Amount Term APR Fees Time to Funding
Short-term loan $2,500–$250,000 6–18 months 16.00%–36.00% Up to 3.00% origination fee As fast as 2 business days
Merchant cash advance $2,500–$250,000 6–18 months 16.00%–36.00% $595 administrative fee As fast as 2 business days

Short-term loan

CAN Capital’s short-term loan is available between $2,500 and $250,000 to cover working capital needs. Short-term loans — with APRs ranging from 16.00% to 36.00% — follow a quick repayment schedule. Once you are prequalified, you can choose the loan amount and term length that works best for your business.

Terms range from 6 to 18 months, and borrowers make fixed daily payments. CAN Capital takes automatic deductions from borrowers’ bank accounts, though a prepayment discount may be available after the first 90 days of the loan term.

You could receive funds as soon as two business days after approval. CAN Capital charges an origination fee up to 3.00% for new loans.

Merchant cash advance

A merchant cash advance (MCA) is different than a traditional loan. Instead of lending a sum of money, CAN Capital purchases a portion of the business’ future receivables in exchange for funding.

You could get an advance between $2,500 and $250,000 at an APR between 16.00% and 36.00%. CAN Capital would take a percentage of your daily credit card sales until the advance is paid off. Payments would be automatically deducted from each card transaction on a 6– to 18-month schedule. However, the amount that’s taken as payment each day would depend on that day’s sales, so the payment schedule is only an estimate.

Like a short-term loan, an MCA could be deposited in your bank account in as few as two business days after approval. CAN Capital charges a $595 administrative fee to issue MCAs.

Who is eligible for CAN Capital financing?

CAN Capital works with businesses in a wide range of industries, such as dental offices, restaurants, coffee shops, nail salons and automotive repair garages. To qualify for a CAN Capital business loan or MCA, business owners must meet the following criteria:

  • At least 6 months in business
  • Minimum personal credit score of 600
  • At least $150,000 in annual gross revenue
  • No more than $175,000 in outstanding tax liens or judgements
  • No personal or business bankruptcy that has not been discharged for at least a year

CAN Capital’s online application requires business details such as your annual revenue, type of business, time in business and when you need funds. You also must include your tax return from the previous year, or a year’s worth of bank statements in lieu of a tax return.

Submitting an application to receive an offer wouldn’t impact your credit score. When you move forward with a loan offer after qualifying, your credit score could be affected.

Qualifying business owners can use financing however they’d like. You can put funds toward taxes, payroll, inventory, marketing, advertising or expanding your business.

Who is not eligible for financing?

CAN Capital would not approve any applicants with a personal or business bankruptcy that hasn’t been discharged for one year.

A bankruptcy discharge releases a person or business from being liable for certain debts. A debtor would no longer be required to pay any debts that have been legally discharged. You wouldn’t be eligible for CAN Capital financing until at least a year has passed since your bankruptcy discharge.

Additionally, some startup businesses likely wouldn’t qualify for funding. Although CAN Capital’s time-in-business requirement is relatively low at six months, it does prevent newer startups from being eligible.

Pros and cons of CAN Capital

Before choosing business financing from CAN Capital, consider the benefits and downsides of the lender.

Pros Cons
  • Businesses open for just six months could qualify for financing
  • Newer startup businesses would not be eligible
  • Multiple funding options to choose from depending on your repayment preference
  • Relatively small financing amount available
  • Interest rates comparable to similar business lenders
  • Businesses must generate substantial revenue to be eligible, compared to other lenders

The fine print

Personal guarantee required. CAN Capital requires borrowers to provide a personal guarantee when obtaining financing. A personal guarantee is a legally-binding agreement that puts a business owner on the hook to repay debt if the business defaults. It’s common for lenders to ask borrowers to sign a personal guarantee to secure funding. Keep in mind that by signing one, you would be putting your personal finances at risk.

Take caution with MCAs. An MCA may be appealing for businesses that have a high volume of credit card transactions. But merchant capital can be difficult to manage. MCAs are known for high interest rates and short terms. A certain percentage would be taken from each card transaction and the repayment schedule would depend on your daily sales traffic, which could make it challenging to plan around your payments. Make sure your business is suited to repay an MCA before obtaining one.

The bottom line

CAN Capital provides a relatively small amount of funding to a broad range of businesses. Eligible borrowers could choose between a short-term loan and a merchant cash advance, depending on how they prefer to repay debt.

A short-term loan follows a traditional repayment schedule, with fixed payments made daily. MCAs have a more flexible schedule, as payments would depend on your daily sales. However, this schedule could disrupt your cash flow and might be an option better suited for businesses with high number of card sales.

Before applying for a CAN Capital short-term loan or MCA, be sure to shop around to find the right loan for your business. Look for a lender that provides the amount of money you need with rates and terms that work for you.

 

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