Fora Financial Review

• Short-term loans are a valuable small business tool because you don't have to worry about incurring a ton of interest over the years.
• Look for a short-term lender that has an easy online application, quick approval times and fast funding. The terms should be flexible, and you shouldn't get hit with extra fees.
• We selected Fora Financial as our best pick for short-term loans because it offers loans of up to $500,000, has terms of no longer than 15 months and has relaxed qualification requirements.
• This review is for business owners who are thinking about applying for a loan from Fora Financial.

Fora Financial has extended more than $2 billion in funding to over 25,000 small businesses since it was founded in 2008. This lender limits its terms to 15 months, won't hit you with extra fees and provides fast funding, all of which are important attributes of a short-term lender. If you need funding to chase a growth opportunity or purchase more inventory, you don't want to wait days to get your money. For these reasons and more, Fora Financial is our choice for the best alternative lender for short-term loans.

Fora Financial

Cost

The interest rate on a Fora Financial loan depends on your credit score. The higher your credit score is, the lower your interest rate will be.

Once you are approved for a loan, Fora sets up a repayment plan. The payment is automatically deducted from your business checking account daily or weekly. We like that you have to make frequent payments, because you'll avoid paying a bigger amount at the end of the month. These frequent payments are not common with the lenders we reviewed; Balboa Capital requires monthly payments, for example. With Fora Financial, there are no prepayment penalties, and you may qualify for a discount on the remaining balance if you pay it off early.

[Related Content: How to Negotiate a Business Loan Agreement]

Fora Financial also stands out because, unlike other lenders, like Crest Capital, it doesn't charge a documentation fee.

Applying for a Loan

Fora Financial makes it quick and easy to apply for a short-term loan of up to $500,000, which is a real plus. The more paperwork-intensive the process is, the longer it will take for you to get the money you need. For short-term borrowers, that could mean missing an opportunity or incurring more debt. [Related Content: How to Choose a Business Lender] 

Fora's application process is quick. The lender makes an approval decision within 24 hours, and if you are approved, your loan will be funded within 72 hours. That funding time is longer than those of some other lenders, such as Rapid Finance. However, you don't need to provide collateral, and the paperwork requirements are limited.

You can either fill out an online application or apply over the phone. The lender asks for basic information, including your business's name, email address, phone number, monthly gross sales and years in business. In addition, you need to show three of your business's most recent bank statements.

Fora Financial has relaxed loan qualifications. To qualify, you need to have been in business for at least six months, generate $12,000 or more in gross monthly sales and have no bankruptcies on your record. Fora Financial requires only a decent credit score  of around 500. For merchant cash advances, you also need a minimum of $5,000 in monthly credit card sales. [Visit our best picks page for recommendations on the best credit card processing companies.]

Source: Fora Financial

Loan Terms

We chose Fora Financial as our best pick for short-term loans because its terms last only 15 months. That means you won't pay as much compounding interest as you would if you were to take out a longer-term loan.

Fora Financial's loans are unsecured, which means you don't have to offer up collateral, such as real estate or a piece of equipment, to back the loan. A personal guarantee isn't required, either, which is unusual in the alternative lending marketplace. That means that, if you default on the loan, this lender won't come after your personal assets.

The lack of a collateral requirement and the limited paperwork won us over. Sure, loans take up to 72 hours after approval to fund, but you won't have to do much work upfront to get approved.

Did you know? Short-term loans are a popular funding option among small business owners, and there's a good reason for it: You don't get stuck paying compounding interest for a long time.

Helpful Tips

We like that Fora Financial doesn't require tons of documents. You need three months of bank statements, which the lender will use to verify your gross monthly income. If you have challenged credit, Fora could request more documentation, such as monthly bank statements, tax returns and profit-and-loss statements. Make sure you have the documents ready before you start the loan process, which will speed up approval.

Fora Financial Features

Short Terms

One of the reasons we selected Fora Financial as the best for short-term loans is that the terms are capped at 15 months. That means you won't incur interest over a long period or, worse, owe money long after the reason you borrowed has lost its value.

Easy Approval

Fora Financial requires business borrowers to have a decent credit score (at least 500) and at least six months of business history. This lender is willing to work with borrowers who may have credit challenges. Other lenders, like Fundbox, require credit scores of at least 680, which significantly limits who qualifies for a loan.

No Restrictions

You can use proceeds from Fora Financial's loans for any business purpose. So, if you need it to cover payroll, no problem. By contrast, banks restrict what you can use the proceeds for. This flexibility means that you can rest assured knowing that, whatever your capital needs are, Fora will work for you.

Customer Service

Fora Financial provides customer service via phone and email during normal business hours. The lender also has several valuable resources on its website, including a blog and case studies.

Fora Financial has been accredited with the Better Business Bureau since 2011 and has an A+ rating.

Source: Fora Financial

Tip: The more prepared you are before applying, the quicker the process will be. A lender can promise same-day funding, but if you have to spend extra time finding your documentation and uploading it to your computer, it will slow down the entire process.

Drawbacks

Fora Financial's only limitation is that it requires $12,000 in monthly sales, but that may be a high hurdle for startups and some very small businesses. Some of the other lenders we looked into, such as SBG Funding, require only $10,000 in monthly sales. 

[Related Content: How Much Money Does it Take to Start a Business]

You need $5,000 in monthly credit card sales to qualify for Fora Financial's merchant cash advance, which will also shut out some business owners.

Summary

We chose Fora Financial as our pick for the best alternative lender for short-term loans because it has an easy online application, relaxed qualifications and terms that last a maximum of 15 months.

We recommend Fora Financial for:

• Borrowers who want a loan they can repay quickly
• Business owners who process a lot of monthly credit card sales and need a merchant cash advance
• Borrowers who don't want to provide a ton of paperwork during the application process

We DON'T recommend Fora Financial for:

• Borrowers who have low credit scores and are worried about high interest rates
• Businesses that generate less than $12,000 a month in sales
• Business owners who don't process a lot of credit card payments each month, as they will not be eligible for Fora Financial's merchant cash advance