Principis Capital Review

Principis Capital provides cash advances to small business owners. Advances are an alternative to traditional business loans but can be an expensive way to borrow. If it’s one of your only remaining options and you’re able to repay quickly, Principis does consider certain types of businesses that some competitors reject.

Principis Capital: Should you apply?

Business owners with bad credit or who are in need of fast cash may find funding here. But it may also be difficult to know exactly how much its merchant cash advance (MCA) may cost you: A salesperson said the company charges a setup fee, but declined to share other costs. As a rule, MCAs are one of the highest-cost lending products available.

Merchant cash advance vs. a traditional business loan

MCAs allow business owners to borrow against future credit card receivables. The advantages are quick funding with lenient credit requirements. The downsides are typically fast repayment terms and high fees, often expressed in factor rates, not annual percentage rates (APRs). MCAs are not regulated in the same way as traditional small business loans, which is why it’s important to know exactly what you’re getting into before agreeing to one.

What does Principis Capital offer?

• Amounts: 1x-2.5x your business’s average monthly credit card sales
• Repayment terms: A set percentage of your daily credit card receipts
• APR or factor rate: NA
• Fees: 1.5% setup fee

Principis Capital works similarly to other MCA providers, though some competitors disclose costs directly on their websites. Principis does not, and efforts to reach the company only revealed a 1.5% setup fee.

Rather than having a fixed monthly payment like with a traditional business loan, you’ll pay back the MCA as a percentage of your daily credit card receipts instead. This gives you payment flexibility because your payments are scaled to your income. Principis Capital says that it usually takes merchants 8 to 12 months to repay the MCA.

Do you qualify for Principis Capital?

• Credit requirements: None
• Minimum revenue: $20,000 in total monthly sales, or $4,000 in total monthly credit card sales
• Minimum time in business: 12 months

Principis Capital, like other MCA providers, has lenient credit requirements and may consider lower revenue requirements than the ones listed above. It says that the average customer has a credit score below 600 with 30% of its customers below 500. Again, keep in mind that the trade-off is typically higher fees compared with a business lender that only works with business owners who have good credit.

Many lenders tend to avoid lending to adult-oriented businesses, including bars and nightclubs, but Principis Capital considers them for financing. If you have a business in this industry, Principis Capital may be one of the few options available to you.

Businesses must be based in the United States and you must have a separate business location from your personal residence — in other words, home-based businesses don’t qualify.

How to apply for Principis Capital

Principis Capital makes it easy to apply for an MCA. You can apply in several different ways: by phone, online, or by printing out and emailing or faxing a one-page application. Principis Capital says that the application takes five minutes to complete, but only if you have the relevant information on hand to speed it up.

You’ll need to provide Principis Capital with either:

• 4 months’ worth of your most recent bank statements or
• 4 months’ worth of your most recent credit card sales statements, plus 2 months’ worth of your most recent bank statements

In addition, you’ll need to provide information about the business’s location, rent or mortgage costs, and landlord or mortgage bank information. You’ll also need to provide personal information about yourself as the business owner, including your personal Social Security number and address, as well as the type of company you operate and its tax ID number.

Time to funding

Once you apply, Principis Capital will get back to you within two business days with an offer if you’re approved for an MCA. This offer will contain all of the financial details, such as fees and repayment options you’ll need to make an informed decision about whether an MCA from Principis Capital is right for your business.

If you accept the terms of the MCA, Principis Capital will do a final verification of your application. If approved, you’ll receive the funding within six business days from when you first applied.

Is an MCA from Principis Capital worth it?

Principis Capital may offer needed cash to businesses that often have trouble finding it from a traditional bank or even other online lenders. But merchant cash advances can be expensive, and you may not know the full cost of an MCA through Principis until you apply.

It’s also important to note that Principis Capital has been the subject of several local civil complaints, including a 2019 case in arbitration with a small business in Arkansas that complained about the way Principis conducted business there after taking out a merchant cash advance with the company.

There are alternatives to a merchant cash advance even if your credit is poor. You could also consider one of Principis Capital’s competitors:

Principis Capital vs. Rapid Finance

Principis Capital’s time to funding is slower than competitors, including Rapid Finance, which can provide MCAs in as little as one day, in some cases. Like Principis, Rapid Finance doesn’t provide any details about the cost of its MCA on its website. Rapid Finance offers term loans as well as SBA loans.

Principis Capital vs. CAN Capital

CAN Capital offers MCAs between $2,500 and $250,000 in addition to term loans. It also can provide quicker funding than Principis Capital, in as little as two days in some cases. CAN Capital offers more information about its costs, including an administrative fee of $595.