Business owners who need fast funding with flexible qualifications may come across Bitty Advance while researching small business funding options.

What is it and how does it work? Read our Bitty Advance review to find out.

What Is Bitty Advance?

Bitty provides fast funding in amounts ranging from $2000 to $35,000 to small businesses in a variety of industries.  It describes itself as “a leader in the Merchant Cash Advance (MCA) industry, providing capital to thousands of entrepreneurs in all 50 states.” Many of its customers get their first small business financing through Bitty.

How the Modern Merchant Cash Advance (MCA) Industry Works

Merchant cash advances, and business cash advances, provide small businesses with an advance against future sales by analyzing past sales. Merchant cash advance providers specifically often analyze past debit and credit card transactions and use that information to determine how much of an advance to offer against future sales. 

Generally, if your business is approved for a merchant cash advance or business cash advance, payments will be taken out of your merchant account or business bank account daily (or sometimes weekly) via direct debit. Payments may vary based on sales volume, which means when sales are lower you pay less. This can be helpful for cash flow. 

The hallmark benefit of merchant cash advances is fast access to cash. Many issuers can get you funding in a lump sum within 48-72 hours. Personal and business credit scores may not be a hurdle in the way they can be with other loans. In other words, this type of financing is often an option for business owners who have bad credit scores. 

The cost of this funding can be more expensive than other types of financing, especially when compared to bank loans or SBA loans, for example. 

How Do I Get Approved for Bitty Advance?

Bitty clearly states minimum requirements on its website:

• 6 months in business
• Business checking account
• $5,000 monthly bank revenue
• 500+ credit score required 
• All industries considered

Meeting those requirements doesn’t mean your business will automatically be approved, however. Your application must still go through underwriting to be approved, and you must accept the funding terms. 

It’s worth noting how these requirements stack up when compared to types of business funding:

Time in business. Many small business loans and financing options require 1—2 years in business. Bitty’s short time in business requirement for an advance can be helpful for newer businesses—including startups—that are bringing in revenue and need funding quickly to grow or scale, or handle cash flow issues. 

Revenue: Bitty Advance requires $5000 monthly revenue deposited in the business bank account. This is low compared to other types of small business financing that may require significantly higher monthly or annual revenue. 

Note that Bitty, like many companies that offer small business financing, requires a business bank account. If you want to maximize the number of financing options available to your business, you should open a business checking account and use it to receive business revenues and pay expenses. It’s not unusual for financing companies to require business bank statements to verify monthly or annual revenue. 

Credit: Bitty Advance is much more flexible when it comes to credit scores than traditional lenders. A personal credit score of 500 is often considered a low credit score, and some types of the more popular types of business financing simply won’t be available to customers with scores that low. (Personal credit scores generally range from 300 to 850 with a higher score indicating lower risk to the lender.) 

Your business does not need a high business credit score to qualify, either. However, it is a good idea to establish business credit; doing so can help your business improve access to business capital. 

What Is the Bitty Advance Approval Process?

The Bitty Advance application process is also spelled out clearly on its website:

• Fill out the loan application
• Link online bank account
• Review approval terms
• Sign agreement
• Receive funds

Businesses that are approved may be able to get same-day funding, or funding in as little as 1-2 business days. 

Does Bitty Advance Do a Hard Pull?

When a lender checks an applicant’s credit report, that credit check typically creates an inquiry on the credit report that has been checked. A hard inquiry refers to one that can impact the owner’s personal credit scores. 

The inquiry created by a credit check from Bitty is a “soft inquiry,” which does not affect credit scores. 

What Are the Bitty Advance Rates?

Merchant cash advances and business cash advances typically describe the cost of financing as a factor rate rather than an interest rate or annual percentage rate (APR). A factor rate of 1.5 means you will repay 1.5 times the amount borrowed, for example. Bitty Advance factor rates go up to 1.65. 

It also offers a “pay in full discount.” You can repay the advance in full in the first 30 days for a 30% discount or within the first 60 days for a 20% discount. 

What Is the Monthly Fee for Bitty Advance?

Bitty charges a $4.99 monthly service fee.

What Is the Repayment Period for a Bitty Advance?

A Bitty Advance offers short-term financing with a term of 90—180 days. The average term, according to Bitty, is 129 days. This type of short-term financing is often best used for working capital needs, to smooth out cash flow, make urgent repairs to business equipment or to buy inventory, for example. 

What Are the Benefits of Bitty Advance?

The main benefits of Bitty Advance, and this type of funding in general, is that approval and funding can be very fast, and funding may be available to business owners with less-than-perfect credit. 

With regard to Bitty Advance specifically, it offers a personal Bitty Advance account manager and 24/7 online account access. The pay-in-full discount can save money. It also offers refinancing of other cash advances.

What Credit Card Type Is Required for Bitty Advance?

Bitty requires a business bank account. It does not require a specific credit card type. 

What Are the Terms and Conditions for Bitty Advance?

You can read the Bitty Advance website terms and conditions here. If your business is approved for a Bitty Advance you’ll receive a full disclosure of the terms and conditions of your advance. Read it carefully to make sure you understand the terms of your advance.  

Is Bitty Advance Legit?

Bitty Advance is a Florida-based financing company. It has a 4.4 star rating (out of 5 stars) on Trustpilot as of October 26, 2023.  Bitty Advance reviews often mention a positive interaction with members of the customer service team, flexibility in getting approved, and how quickly funding was received. 

There are a few one-star reviews from customers who said they had billing discrepancies or were unable to work out alternative repayment arrangements. Bitty Advance responds to all reviews posted. 

In addition, the Better Business Bureau (BBB.org) lists several complaints filed against Bitty Advance. Most have received answers, though the resolution 

Who Are Bitty Advance’s Competitors?

There are a number of companies in the merchant cash advance and business cash advance space. In addition to other companies offering business cash advances, there are other types of financing business owners may want to consider if they qualify, including:

Business Line of Credit

With a line of credit, borrowers get approved in advance for a specific amount of funding they can then borrow against as needed. As funds are repaid, they become available again to borrow.

Term Loans

Businesses that need a larger loan amount and more time to pay it back may want to consider term loan. Term loans are typically paid back over the course of 2-5 years, though some can go as long as 20—25 years. 

Invoice Factoring or Financing

B2B businesses that invoice customers can explore invoice factoring or financing. With this type of financing, you sell or assign your invoices to another company at a discounted rate in exchange for cash now.

Business Credit Cards

A business credit card often offers access to a line of credit that can be used for short term business capital needs. A credit card with a 0% intro APR may offer interest-free financing for up to a year or longer.  While business credit cards are often available to startups, they do typically require the business owner to have good to excellent credit.

Microloans

These are small loans aimed at business owners who may have trouble accessing capital. Many microloans are made by non-profit lenders, and funds may be limited. 

Vendor Terms

Your business may be able to secure credit with suppliers or vendors. Net-30 vendor terms, for example, will give your business 30 days to pay its invoice. This type of credit can be useful for improving cash flow and may help your business build business credit.