To learn more about Pearl Capital and how it works, please continue reading:
Many small business owners don’t have the credit score or business history to qualify for traditional loans with banks and credit unions. Alternative lenders like Pearl Capital offer to help underserved merchants access funding.
However, alternative lenders financing high-risk business owners tend to be more expensive. You must also work with a third party to apply to Pearl Capital.
We can help you decide if this lender is right for your business by breaking down the pros, cons, and how to apply. Specifically, we’ll answer these questions and more:
Pearl Capital is a leading private equity firm that specializes in providing alternative financing solutions to credit-challenged businesses. With a strong presence in the industry, Pearl Capital has established itself as a trusted partner for businesses seeking access to capital. The company’s mission is to empower businesses to achieve their full potential by providing them with the necessary funding and support.
Pearl Capital’s team of experienced professionals, including senior vice presidents, has a deep understanding of the challenges faced by credit-challenged businesses. The company’s expansive network of strategic partners, including Fora Financial, enables it to provide a wide range of funding options to its clients. Pearl Capital’s commitment to providing excellent service and support has earned it a reputation as a reliable and trustworthy lender in the industry.
The company is an alternative lender that funds “under-banked and credit-challenged businesses in just about every industry.” The lender works with a network of independent sales organizations (ISOs) who apply on behalf of their small business clients.
Pearl Capital was one of the many online lenders that emerged to meet the needs of small business owners in the wake of the financial crisis of 2008. Banks became more reluctant to lend, and many business owners with less than stellar credit couldn’t get a loan. Pearl Capital has provided funding solutions to more than 23,000 credit-challenged businesses. The small business loan market is valued at $180 billion.
Alternative and non-bank lenders saw the opportunity to finance this underserved sector of American small business owners. Pearl Capital was launched in 2010 and was acquired by Capital Z Partners in 2015. Pearl Capital is one of the fastest-growing providers of alternative small business financing in America. It’s based out of Jersey City, NJ, which is in the New York, NY area.
Pearl Capital aims to provide the best financing solutions to the underbanked. It offers one small business loan funded through private equity firm capital. It doesn’t publish information on borrowing ranges or rates, but terms are between 4-12 months. Business owners in all 50 states are eligible for the services offered by the lender.
Merchants cannot apply directly to the lender. Pearl Capital collaborates with ISOs and strategic partners to enhance service and efficiency. Your ISO rep works with Pearl to close the deal.
The amount to be paid back is often higher than traditional loans, which can burden the business financially. The lender also specializes in quick funding.
Getting approved and receiving your funds within a few days could be possible. Pearl Capital’s mission includes competing for the entire credit-challenged merchant market.
A cash flow loan provides a lump sum of cash upfront for working capital or other business needs. It’s also called an ACH loan because you’ll repay the advance with frequent automatic clearing house (ACH) transfers.
The repayment process is simple and streamlined. You won’t have to worry about scheduling or making payments because they’re automatically deducted from your account. The amount to be paid back is automatically deducted from your account, ensuring timely repayments but also requiring careful financial planning.
The financing program is a sort of a combination of a short-term loan and a merchant cash advance (MCA). Instead of repayment coming from your credit card sales, it comes from your business bank account.
The lender states it can close “tough deals,” which means lending money to business owners with low credit scores. There is no minimum personal credit score required.
The only two qualifications are:
It can be an expensive way to borrow money. While the company doesn’t provide interest rates, it does provide quick and accessible funding. The amount to be paid back can be significantly higher than the initial loan, impacting your business’s cash flow.
Accessible, in this case, means you can get approved with a low credit score, which means high credit risk. Increased credit risk means high interest rates and fees in virtually all cases. Similarly, fast funding means higher interest rates and fees. Pearl Capital provides fast funding to small business owners with low credit scores, so the costs increase.
The funding is unsecured, meaning you won’t have to provide collateral. However, you’ll most likely need to sign a personal guarantee. If you default, the lender can also put a UCC blanket lien on your business.
The lender does a hard credit pull when underwriting loans. Work with your ISO or loan broker to ensure you’ll qualify before applying.
For ISOs & Loan Brokers:
The alternative small business financing market is estimated to be between $15-50 billion. The market for merchant cash advances (MCA) is growing rapidly. More Institutional money is flowing into funding deals for small businesses.
There is increasing competition among funders in the alternative business financing market. A robust risk management system is necessary for funders in the alternative financing industry.
Merchants cannot apply directly to the lender. You must work with a third party to apply on your behalf.
Work with an ISO or business loan broker to apply to Pearl Capital. Unlike some alternative lenders with direct applications or referral programs, Pearl Capital only accepts applications through ISOs.
A loan broker can help identify the right financing options and negotiate terms with Pearl Capital on your behalf. They will submit your application, ensuring all required documentation is provided.
Pearl Capital’s system ensures that ISOs bring in qualified leads, streamlining underwriting and renewals. If approved, funds are typically disbursed within a few business days.
As stated, the lender automatically deducts payments from your business bank account via ACH transfer. You can choose daily or weekly payments.
The amount to be paid back is automatically deducted, which can be a significant financial commitment for your business.
If you pay it off ahead of schedule, there may be an early repayment fee. Check with the lender before paying off the loan balance early.
The company’s website doesn’t publish information about renewals, but several user reviews mention renewing. However, there don’t seem to be incentives to renew, such as lower rates or higher borrowing amounts.
The primary benefit is that small business owners with low credit scores can get financing. Not only does the lender accept all FICO scores, but you also only need three months in business.
The lender provides fast funding. The company is geared towards helping companies take advantage of time-sensitive opportunities.
Another benefit is that the repayment process is easy and efficient. You don’t have to worry about scheduling payments or sending in checks.
The most significant drawback is the cost. Short-term loans and merchant cash advances carry some of the highest costs in the small business financing industry.
The amount to be paid back can be substantial, which may strain your business’s finances.
Unfortunately, the website doesn’t provide borrowing amounts or interest rate ranges. Ensure your business can handle the payments before signing the contract.
Pearl only offers a single lending product. You can’t apply directly and must work with an ISO or broker.
Pros:
Cons:
Yes, Pearl Capital is a legitimate small business financing company.
Pearl Capital is committed to regulatory compliance and accreditation. The company is a licensed lender and is subject to federal and state regulations. Pearl Capital is also a member of several industry associations, including the National Association of Alternative Financial Services Providers.
In terms of accreditation, Pearl Capital has received several awards and recognition for its commitment to excellence in the industry. The company has been recognized as one of the top private equity firms in the country by several industry publications. Pearl Capital’s commitment to regulatory compliance and accreditation has earned it a reputation as a trustworthy and reliable lender in the industry.
Pearl Capital’s regulatory compliance and accreditation include:
By maintaining high standards of regulatory compliance and accreditation, Pearl Capital can provide its clients with the assurance that they are working with a reputable and trustworthy lender.
The main difference between an MCA and an ACH loan (aka cash flow loan) is how you repay the advance. MCAs draw directly from your credit card receivables.
Cash flow loans are drawn from your business account via an ACH transfer. Pearl Capital does sometimes refer to its product as a merchant cash advance. That’s because MCAs are starting to move away from the traditional process of taking repayment from card sales and moving towards taking payment from all revenue via your business bank account.
The lender’s reviews trend toward the negative. Pearl Capital is rated ‘Poor’ with a score of 2.6 out of 5 on Trustpilot. Additionally, it is not Better Business Bureau (BBB) accredited and has a B- rating for failure to respond to complaints. Pearl Capital has a 3.2 out of 5 rating on over 50 Google Reviews.
Many users reported feeling trapped by the high fees associated with Pearl Capital’s services. Some customers described Pearl Capital as a ‘predatory lender’. Multiple customers expressed frustration over a lack of transparency from Pearl Capital.
Several reviews indicate that customers experienced aggressive collection tactics from Pearl Capital. Numerous customers have warned others to avoid doing business with Pearl Capital.
Other negative reviews discuss a lack of communication. Several reviews state that the company is aggressive on repayments, not allowing exceptions and filing UCC liens prematurely.
The positive reviews talk about how easy the process was and how quickly they got their money. Some customers mentioned that the company’s rates are comparable to similar lenders and that Pearl Capital discloses all costs before you sign.
Pearl Capital has very low qualifications, but that doesn’t mean you’re guaranteed approval. If you applied and were declined, the denial letter should explain why. Contact Pearl or your ISO rep if you need more information.
It’s also possible that you will decide to pass on Pearl Capital after seeing your rates. In either case, there are many lenders to consider.
Merchant cash advances and short-term loans are some of the most accessible products on the market. You shouldn’t have trouble finding a lender for either.
You also might want to consider one of the following small business loans:
Pearl Capital is best suited for credit-challenged small business owners who need quick funding and are willing to pay more to get it. Consult your loan broker or ISO rep before applying. Consider the amount to be paid back and ensure your business can handle the financial commitment.
Merchants with good credit or those who don’t need immediate financing can find less expensive options. Also, if you prefer to apply directly to the lender, you must find another option.
Based on user reviews, available products, and the application process, we rate Pearl Capital a 3 out of 5. It’s not a bad option for merchant cash advances, but the lack of other products, negative reviews, and not being able to apply directly hold it back.
Disclaimer: The Pearl Capital trademark is owned by Pearl Capital Business Funding, LLC. and its use herein is for reference purposes only and it does not indicate sponsorship or endorsement from Pearl Capital Business Funding, LLC.
Fraud Disclosure:
Please be aware that individuals have been fraudulently misrepresenting to business owners (and others) that United Capital Source, Inc. (“UCS”) can assist small businesses in receiving government grants and other forgivable business loans, when in fact those grants or loans do not exist or are not available. These individuals have ulterior motives and are engaging in the unauthorized use of the names, trademarks, domain names, and logos of UCS in an attempt to commit fraud upon unsuspecting small business owners.
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