Small business owners often need capital, and payment processor lending can seem convenient. But when the terms are unclear, rates are excessive, or repayment structures are designed to trap you, that's when lending crosses into predatory territory.
Convert any factor rate to APR equivalent. A factor rate of 1.3 over 6 months can equal 60%+ APR. Know what you're actually paying.
Don't be pressured into quick decisions. Take the paperwork home and review carefully, or have an attorney review.
Before taking processor funding, check SBA loans, bank lines of credit, or other merchant cash advances to compare real costs.
Know exactly how repayment works. Daily percentage of sales? Fixed daily debit? Understand worst-case scenarios.
| Feature | Clover | CapClover |
|---|---|---|
| Customer Support | ✗ Long hold times, unresponsive | ✓ Your assigned rep's direct line |
| Business Funding | ✗ Limited or no options | ✓ Up to $500,000 |
| Approval Time | ✗ Weeks or denied | ✓ Same-day decisions |
| Hidden Fees | ✗ Frequently reported | ✓ Transparent pricing |
| Contract Terms | ✗ Early termination fees | ✓ Flexible terms |
Get business funding up to $500,000 with your own dedicated rep - this is their direct line, not a call center.
Clover Capital uses factor rates rather than APR, making comparison difficult. Typical factor rates range from 1.1 to 1.4, which can translate to very high effective interest rates.
Clover Capital functions like a merchant cash advance, purchasing future receivables rather than providing a traditional loan. This structure has fewer regulatory protections.
Terms vary by agreement. Since repayment typically comes from daily sales, slow periods can extend repayment or cause cash flow issues. Review default terms carefully.
Often, yes. SBA microloans, traditional bank lines of credit, and some alternative lenders offer better rates than processor-based funding. Compare all options.