FAQ

Yes, Breakout Capital is a technology-enabled direct lender that has provided millions of dollars through a wide range of working capital solutions to small businesses across the country.

As you evaluate small business funding options, you're likely to come across both APRs and factor rates. APR stands for annual percentage rate, and represents the annual cost of the loan, expressed as a percentage, over the term of the loan and includes all fees associated with the loan as well as the frequency of the payments.

Factor rates are specific to business funding and are calculated only once using the original loan amount. Factor rates are most comparable to the total interest cost of the loan, excluding upfront fees.

In addition, factor rates are expressed in a decimal figure rather than a percentage. To determine the total payback based on a factor rate, you'll need to multiply your factor rate by the total amount that you were funded. The payback amount will be determined by your payment frequency and the term. This is different from an APR, which is annualized.

It is important to work with a lender who can explain the total cost of capital to you in clear terms. Breakout Capital utilizes the SMART Box™ and will answer any questions you may have when comparing and choosing between your options prior to funding.

If you want to determine the APR of your loan, you can visit Breakout Capital's APR Calculator and plug in the numbers you already know. You might be surprised to learn how much your APR can fluctuate when any one of the variables in the calculation is changed.

Interest rate and APR are two similar but very different things. Interest rate only includes the interest percentage you will be charged for borrowing the money. APR stands for annual percentage rate, and represents the annual cost of the loan, expressed as a percentage, over the term of the loan and includes all fees associated with the loan as well as the frequency of the payments. It is important to work with a lender who can explain the total cost of capital to you in clear terms. Breakout Capital utilizes the SMART Box™ and will answer any questions you may have when comparing and choosing between your options prior to funding.

If you want to determine the APR of your loan, you can visit Breakout Capital's APR Calculator and plug in the numbers you already know. You might be surprised to learn how much your APR can fluctuate when any one of the variables in the calculation is changed.

An origination fee, sometimes referred to as a closing fee, is a fee charged by a lender to cover the cost of processing and dispersing a loan. The fee is normally expressed as a percentage of the total loan amount (i.e., 2.5%), though it can also be a flat fee (i.e., $395). The money is normally deducted from your capital before loan dispersal. As an example, if you have a $20K loan with an origination fee of 2.5%, the lender will normally deduct $500 before providing the remaining $19,500 to you.

Breakout Capital is committed to responsible funding and does not support stacking. We believe it is important for small business owners to educate themselves about the risks of stacking, and work with a lending partner who can clearly define how long it will take to pay back any loans while taking into consideration the impact on your monthly cash flow. To learn more, please read Stacking: Understanding Risks & Alternatives.

Funds are typically received within one business day after contracts are signed and all closing documents are submitted.

Your account balance, along with other details of your loan, can be found in your account portal. Access to your portal, including login and password, are provided to you by our Customer Success team once you have been funded. Our customers can also gain details of their loan by directly contacting Customer Success via email (support@breakoutfinance.com) or phone (571.565.3154 or Toll Free: 888.318.3534).

Double Dipping (also known as “Interest on Interest”, “Fees on Fees”, or “Interest Acceleration”) is a common industry practice that can cost small businesses tens of thousands of dollars over the lifetime of a partnership with the wrong lender. Double Dipping is most prevalent in short-to-medium term loans and cash advances and occurs when you refinance or renew your funding with your current funding provider and unpaid interest or fees from the original funding are either A) added to the new outstanding balance of your renewal loan, or B) deducted from your renewal loan or advance proceeds at renewal. Essentially, when Double Dipping occurs, your small business pays double for the exact same money. Double Dipping is a complex concept, but it is critically important for small business owners to understand how it impacts your total cost of capital when you renew. It is important to know whether your funding provider Double Dips before you take your first loan or cash advance.

Try our pioneering BeSmart Double Dipping Calculator™ that is widely utilized by our customers and brokers.

You may be able to receive additional funds with your current loan from Breakout Capital. We strive to ensure that your total debt payments are manageable from a debt service perspective and help you assess whether refinancing or borrowing additional capital makes financial sense for your business. Please contact your Breakout Capital representative in order to evaluate your options.

Breakout Capital does not offer merchant cash advances and does not require our customers to be affiliated with any credit card processing companies. We believe there are more responsible funding solutions than merchant cash advances. We offer funding that provides flexible sources of working capital with limited personal liability. By combining the best components of factoring, traditional lending and merchant cash advances, we are able to help businesses borrow responsibly.

Breakout Capital reports to Experian Business bureau. Note that this is not Experian Consumer bureau – our loan does not show up on the owner’s personal credit.

Breakout Capital reports on both positive and negative information. That is, if payments are being made as agreed, the bureau will reflect that positive outcome. This means that paying our loan can help build business credit (some companies only report to the business credit bureau when there is a negative outcome, not positive outcomes).

Breakout Capital reports monthly. Our first report should happen within 60 days of originating the loan.

A UCC-1 is a financing statement that must generally be filed with the Secretary of State (SOS) in the state in which your business is organized. Breakout Capital and other lenders file this to perfect their UCC lien claims. The UCC-1 financing statement contains a description of the lien, the identity of the lienholder, and the identity of the debtor. UCC liens may be filed against businesses when your business enters into a loan and security agreement granting the lender a security interest. While other types of liens typically get filed because of something bad happening, such as not paying your business’ taxes, a UCC lien is a normal part of secured small business financing. The lien serves as notice to potential creditors that you may owe a lender or other secured creditor money and that all or certain assets are pledged to that lender or creditor until you repay the debt.

No, Breakout Capital does not charge any penalty for paying off your business loan early.  In fact, many customers who pay off early qualify for Breakout Capital’s Early Repayment Discount. You must qualify by not missing any payments and by not stacking your loan or otherwise being in default under our loan with your business. If you would like to find out your early payoff amount, you can request this from Breakout Capital at any time and we are happy to let you know whether your business qualifies and what your payoff balance would be.