SkyCap Funding is a lending company that specializes in creating financing solutions for small businesses. Instead of providing traditional, collateral-secured loans, SkyCap Funding bases their financing offers on a business's projected revenue, much like a business cash advance, merchant cash advance, or credit card factoring.
- Available capital
- Repayment options
- Outsourcing available
Funding ranges from $2,500 to $500,000. All financing options are unsecured, meaning they do not require collateral. SkyCap Funding does not disclose their requirements for their loans. A potential client will have to call and discuss this information with a representative.
Variety of Repayment Options
SkyCap has three repayment options, so there really is something for everyone:
- ACH (Automated Clearing House) that automatically debits your account on a daily basis (Monday - Friday).
- ACH that automatically debts your account once a week.
- Daily repayment amounts based on a percentage of your credit card sales. This means that business owners are not locked into a fixed amount if their revenue goes down and gives them more flexibility all around.
SkyCap Funding is a direct lender for their own services and application. However, if they are unable to fund a business themselves, they will outsource to one of their partners to try to find a good fit for the applying business. If the applicant is able to secure funding with the partnering company, SkyCap Funding receives a fee of 5 to 10 percent of the loan amount.
- Lack of transparency
- Lack of information
Lack of Transparency
SkyCap Funding has a simple application that does not require the same extensive documentation that a bank would ask for. However, applying businesses do not know the requirements before applying (much like working with banks). Startup or struggling businesses will not be likely to find financing solutions until those basic requirements are met.
Unknown Terms, Interest Rates, and More
As with any unsecured financing and especially with what is essentially a business cash advance, the interest rates are going to be higher than with a traditional bank or SBA loan. Of course, this is just a guess because SkyCap Funding does not display interest rates on site. We also couldn't find term lengths, minimum application requirements, or fees.
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The Bottom Line
For a small business looking for quick and easily secured business capital, SkyCap Funding should not be a first choice. While they do offer a simple application that requires only basic information and no secured collateral, the missing information outweighs the positive aspects. SkyCap Funding's claims are enticing but be aware of the lack of information and take the time to research any third-party lenders before accepting financing offers.
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