At a Glance
Rating Breakdown
Performance Overview
Scores out of 5, based on our editorial analysis
About 1st Merchant Funding
Founded in 2007 and headquartered in New York City, 1st Merchant Funding is a direct MCA funder that has carved out a deliberate niche in serving high-risk and specialty industries that mainstream lenders refuse to touch. While companies like OnDeck and Kapitus cast wide nets across all industries, 1st Merchant Funding has built nearly two decades of expertise in sectors like restaurants, trucking, construction, auto repair, towing, nightclubs, and other businesses that carry inherent volatility and high SIC-code risk classifications. Over $500 million has been funded to thousands of businesses across the country. 1st Merchant Funding takes a relationship-driven approach to underwriting that contrasts sharply with the automated, algorithm-first models used by bigger funders. Their in-house underwriting team has deep personal experience with the unique cash flow patterns of high-risk industries. They understand that a trucking company's revenue spikes when diesel prices drop and freight demand surges, that a construction subcontractor may receive irregular lump-sum payments from general contractors, and that a nightclub generates 70% of its weekly revenue on Friday and Saturday nights. This industry-specific knowledge allows them to structure advances with repayment schedules that align with actual revenue cycles rather than applying generic daily ACH models that may not fit the business. You pay more and get fewer product options. Factor rates of 1.15 to 1.50 reflect the genuine risk premium of funding industries that other providers decline. If your business is in a low-risk industry like healthcare or professional services and you have clean financials, you will get better rates from a mainstream funder. But if you operate in a high-risk SIC code, have been declined by 2 or 3 other funders, and need capital from a team that actually understands your industry, 1st Merchant Funding is one of the few direct funders that will give your application a genuine, expert evaluation rather than an automated rejection.
Key Features
High-Risk Industry Expertise
1st Merchant Funding has specialized underwriting knowledge for industries like restaurants, trucking, construction, and auto services that are frequently declined by other lenders.
Flexible Underwriting
Each application is evaluated individually with consideration for industry-specific revenue patterns, rather than blanket category restrictions used by many competitors.
Fast Funding Turnaround
Approved applicants can receive funds within 24-48 hours, with expedited processing available for urgent capital needs.
Renewal Incentives
Businesses that successfully complete their first advance can access renewal funding with improved factor rates and higher advance amounts.
How It Works
Submit Application
Complete the online application and provide your most recent 4 months of business bank statements for review.
Industry Assessment
1st Merchant Funding's specialized underwriters assess your business based on industry-specific criteria and revenue patterns.
Receive Your Offer
Get a detailed funding offer with factor rate, total repayment, and a repayment schedule matched to your cash flow cycle.
Get Funded
Accept your offer and receive funds deposited into your business account within 24-48 hours.
What They Do
- Merchant Cash Advance
- Revenue-Based Financing
- Working Capital Advance
- Business Cash Advance
Debt Types They Take On
- Merchant Cash Advance
- Revenue-Based Financing
- Working Capital
- Short-Term Business Funding
Fee & Cost Structure
Regulatory & Trust
Review Summary
Notable Case Studies
Trucking Company Fleet Expansion After Four Declines
An independent trucking company in northern New Jersey with 6 trucks generating \$92K/month needed \$180K to lease two additional Peterbilt 579s and hire drivers to fulfill a new regional distribution contract. The company had been declined by four traditional lenders and two mainstream MCA providers because the freight industry carries a high-risk SIC code classification.
Brooklyn Pizzeria Kitchen Renovation After Health Inspection
A family-owned pizzeria in Brooklyn doing \$28K/month in revenue needed \$65K for kitchen equipment upgrades after a health department inspection flagged outdated ventilation, a deteriorating floor drain, and an aging prep refrigerator. The health department gave the restaurant 30 days to remediate or face closure.
Pros & Cons
Pros
- Specializes in high-risk SIC code industries that mainstream MCA providers automatically decline, including trucking, construction, nightclubs, and towing
- Relationship-driven underwriting evaluates each business individually, understanding industry-specific cash flow patterns that automated systems miss
- Fast 24 to 48 hour funding turnaround even for complex high-risk deals that require deeper analysis
- Nearly two decades of operating experience since 2007 provides deep institutional knowledge of high-risk industry dynamics
- Renewal program rewards successful repayment with improved factor rates and higher advance amounts for returning customers
Cons
- Factor rates of 1.15 to 1.50 are higher than mainstream providers like OnDeck or Kapitus, reflecting the genuine risk premium of serving declined industries
- Limited product diversity: primarily MCAs and revenue-based financing with no SBA loans, lines of credit, or equipment financing
- Maximum advance of \$500K is lower than funders like Kapitus (\$5M) or Clara Capital (\$5M), limiting options for larger businesses
- Not available in all 50 states, with North Dakota and South Dakota excluded from their service area
User Reviews (27)
worked out great
worked for us
good experience
Way better than the last MCA company I used. 1st Merchant Funding actually picks up the phone. Got $45K and the rate was 1.18.
better than expected
Mike picked up every time I called. That alone is worth 5 stars imo.
exactly as advertised
I run a pizza shop and we needed truck repair money fast. 1st Merchant Funding delivered. $15,000 at 1.09.
pretty good
Good experience. $150K at 1.25. My bakery needed capital and they came through. Rate is a bit high for my revenue though.
mixed feelings
1st Merchant Funding is just another MCA company. $60K at 1.45. They're all the same honestly. Fast money expensive money.
mostly positive
Good company, factor rate could be better. Got $100K for my spa at 1.20. Nicole was helpful during the process.
run
Predatory. 1st Merchant Funding charged me 1.18 on $120K which converts to criminal APR. When business slowed down they threatened legal action within 48 hrs. Sharks.
regret it
Daily debits from 1st Merchant Funding are killing my cash flow. Took $100K for my smoke shop and now I'm struggling more than before.
not great
Wouldn't recommend 1st Merchant Funding. Rate they quoted me was different from the contract. $12K at 1.15 when I was told it'd be lower.
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Related Companies
Important Merchant Cash Advance Disclaimers
- A merchant cash advance is not a loan. It is a purchase of future receivables at a discount. Factor rates, not APRs, are used to express the cost of capital. Effective APRs on merchant cash advances can range from 40% to over 350% depending on the term and factor rate.
- Repayment is typically collected daily or weekly via automatic ACH debits or a percentage of credit card sales. This means your repayment amount fluctuates with revenue but withdrawals occur every business day, which can strain cash flow during slow periods.
- Most MCA agreements require a personal guarantee from the business owner. In the event of default, the MCA provider may pursue the owner's personal assets, including bank accounts and property.
- MCA providers commonly file UCC-1 liens against your business assets. This lien may prevent you from obtaining additional financing until the advance is fully repaid and the lien is released.
- Merchant cash advances are not regulated by federal lending laws such as the Truth in Lending Act (TILA). State regulations vary widely, and some states have limited consumer protections for MCA products.
- Stacking multiple merchant cash advances (taking a second advance before the first is repaid) significantly increases the risk of default and can lead to aggressive collection actions including confessions of judgment in some jurisdictions.
- Zogby does not provide merchant cash advances or business financing. We are an independent comparison service. We do not fund advances, process applications, or guarantee approval on your behalf.
This page is informational, not financial or legal advice. Talk to a qualified professional before making any big money decisions.
Editorial Independence
We make money from some companies on this page. That doesn't change our rankings -- the editorial team scores every product independently, and the business side has no say in what we recommend.