Business loan types offered
Uncapped offers several types of working capital loans to online businesses. Its loans are similar to merchant cash advances or revenue-based financing, which secure the loan with revenue.
When you take out a loan with Uncapped, you agree to share a percentage of your revenue until the loan and fee are repaid. Uncapped states most businesses share 5 percent to 25 percent of future revenue. In addition to high revenue requirements, Uncapped likes to see that your revenue is growing over time.
But instead of charging APRs or factor rates, Uncapped charges a percentage of the loan amount as a flat fee. Your total cost of the loan will be based on this fee and the amount of time it takes you to repay the loan.
For example, if you take out a $50,000 loan with a monthly fee of 1.5 percent and a repayment term of 12 months, you’ll be charged a base fee of 18 percent (1.5% x 12 months = 18%). That means you’ll owe a $9,000 fee ($50,000 x 18% = $9,000) for a total of $59,000.
To make sure this is the right type of loan for you, use a business loan calculator to compare Uncapped’s loan costs with traditional loans that use interest rates. In some cases, you may be able to get a loan elsewhere that costs less or has more manageable monthly payments.
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Revenue-based financing
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Fixed-rate financing
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SaaS runway loan
Loan quick facts
- Amounts: $50,000 to $10 million
- Terms: Not stated
- Base fee: from 2%
Uncapped revenue-based financing overview
Uncapped approves and sets your loan amount based on your monthly sales revenue. You then repay the loan from a percentage of daily sales until the loan is paid off, similar to a merchant cash advance.
This payment structure is helpful especially if your business has seasonal highs and lows in sales. If you have especially good sales one day, you’ll pay off the loan more quickly. But repayments can also be drawn out if sales take a slump for a time.
Loan quick facts
- Amounts: $50,000 to $10 million
- Terms: Not stated
- Base fee: from 2%
Uncapped fixed-rate financing overview
This type of financing also determines your loan amount by your monthly sales revenue. But you repay the loan plus the one-time fee through fixed payment amounts based on your business’s growth trajectory.
You have the flexibility to choose daily, weekly or monthly payments, whichever suits your cash flow best. But any repayment schedule that’s less than monthly or has short repayment periods of less than two years is aggressive and could leave you feeling tied to loan repayments without much wiggle room.
Loan quick facts
- Amounts: $50,000 to $10 million; up to 50% of annual recurring revenue
- Terms: 6 to 24 months revolving
- Monthly fee: from 0.50%
Uncapped SaaS runway loan overview
This loan is designed for Software as a Service (Saas) companies that need regular access to capital. Once approved, you can draw funds at any time up to your credit limit, and your repayment term of six to 24 months starts.
Uncapped’s SaaS runway loancharges a monthly fee calculated on the principal balance each month, rather than simple interest or an annual percentage rate (APR).
You can borrow up to half of your annual recurring revenue. Uncapped does want to see that you’re growing as an SaaS company with a low exit rate (called churn) from your customers.
Uncapped vs. Credibly
Credibly caters to a broader customer base and is more accessible to getting approved than Uncapped. Credibly offers a working capital loan, business line of credit, invoice factoring, merchant cash advance and SBA loans. It also requires just $180,000 in annual revenue and FICO score of 550 to qualify. Uncapped offers fewer types of loans. It focuses on revenue-based financing and also requires a hefty $600,000 in annual revenue.
Focusing on the merchant cash advance, Credibly’s MCA comes with repayment terms of three to 18 months, while Uncapped’s terms go from two to 24 months. Credibly also offers a smaller amount of funding compared to Uncapped — up to $400,000 versus Uncapped’s $10 million. Credibly’s fee starts at a 1.09 factor rate, while Uncapped charges fees that start at 2 percent of the loan amount.
A $50,000 loan from Credibly with a 1.09 factor rate means you’ll end up repaying $54,500 ($50,000 x 1.09 = $54,500), not including additional fees. As long as you pay on time, that cost won’t go up the longer it takes you to pay off your debt. Credibly does offer a prepayment discount that could reduce the cost if you pay off your total balance before the final due date.
On the other hand, Uncapped’s loans could cost more the longer it takes you to pay off your debt.
For example, a $50,000 loan with a 1 percent monthly fee has a minimum total base fee of 2 percent. That means the lowest total cost you would repay would be $51,000 ($50,000 x 2% = $1,000 fee) but only if you can pay the loan off within the required two-month period.
If it takes eight months, the fee grows from two percent to eight percent. So now the total cost you repay is $54,000 ($50,000 x 8% = $4,000 fee). And if it takes you 12 months to repay the loan, it would cost $56,000 ($50,000 x 12% = $6,000) which is more than a similar loan from Credibly but with a shorter repayment period.
Before choosing a fee-based loan, always compare those costs with traditional loans that charge interest rates to make sure you’re choosing the most affordable option.
Uncapped vs. Fora Financial
Both Fora Financial and Uncapped offer short-term, revenue-based advances with aggressive repayments, typically 24 months or less. Uncapped does have revenue-based loan options with bi-weekly or monthly schedules. Fora Financial also offers short-term loans with monthly repayments.
But Fora Financial is more friendly to the small businesses that only need a small amount of funds. For example, Fora Financial provides lower loan sizes starting at $5,000 and going all the way up to $1.4 million. Uncapped goes from $50,000 to $10 million, which caters to more established businesses.
Fora Financial also requires just $144,000 in annual sales and three months in business, and it works with bad credit borrowers who have FICO scores as low as 500. Meanwhile, Uncapped’s requirements are $600,000 in annual sales and six months in business, though it doesn’t state a minimum credit score.
