Lavu Capital FAQs
Do you require personal guarantees or other collateral?
How long do I have to pay the advance?
Does this capital advance affect my credit score?
How does Lavu Capital differ from standard loans?
How do I know if I’m pre-approved for a cash advance?
How long is my pre-approved offer valid?
What if I don’t have an offer?
Why do I need to verify my bank account?
How is my cash advance sent to me?
How soon do I get access to my advance?
What happens if I don’t finish paying within the estimated duration?
How do I pay the cash advance?
What does the cash advance cost overall?
Is there a minimum payment amount?
Where can I find my payment activity?
What happens if my sales slow down?
How long do I have to pay the advance?
Can I pay my cash advance early?
I accepted the cash advance. Why is the money not in my bank account yet?
Why are you taking multiple payments on the same day?
General Questions
What is a cash advance?
Lavu Capital offers merchant cash advances to provide funding that can be used to help run and grow your business. Cash advances are not loans and don’t charge interest. Rather, you agree to sell a portion of your future sales in exchange for receiving an advance now, all for one low, up front fee.
You can use a cash advance to pay for any business expense.
Rather than pay on a set schedule, you’ll pay your merchant cash advance with a set percentage of future sales over time.
Applying doesn’t impact your credit score and doesn’t require any personal guarantees or collateral. Plus, there are no sign-up, late, or annual fees.
How can I use the capital?
Your cash advance can be used on any business expenses such as inventory, equipment, payroll and hiring, rent, and marketing—just to name a few. However, Lavu Capital’s merchant cash advances cannot be used for any personal, family, or household expenses.
How long does it take to receive the funds after accepting the offer?
After you click to accept your cash advance, Parafin, our business financing provider will review it. Once Parafin approves your advance, the funds will be transferred to your designated bank account via ACH.
Bank transfers generally take 1-2 business days to appear in your account. Business days are Monday-Friday, excluding bank holidays.
Merchant cash offers and advances are provided by Parafin and governed by Parafin’s Terms of Service. Bank transfers are subject to review and may be rescinded. If your transfer is unable to be completed, Parafin will provide notice as soon as possible.
Do you require personal guarantees or other collateral?
No. Accepting an offer from Lavu capital does not require a personal guarantee or any other collateral.
How long do I have to pay the advance?
As long as it takes. There’s no extra fee if it takes you longer than expected.
However, because your offer is determined in part by your past business performance, our estimate is that you’ll pay your cash advance within the estimated time frame stated when you accepted it.
Does this capital advance affect my credit score?
No. Accepting a cash advance does not affect your credit score. We also do not run credit checks or pull your credit score to pre-approve your business for an offer.
How does Lavu Capital differ from standard loans?
Lavu Capital offers merchant cash advances—not loans.
Your business’s merchant cash advance offer is determined by sales-based underwriting. For access to the capital, you pay a flat “capital fee”. You pay the total outstanding balance with a percentage of future sales that you’ll know before you accept an offer.
Business loans usually have fixed repayment, minimum repayments, collateral requirements, and many also require personal guarantees where you pledge your personal assets as collateral if your business can’t repay your loan. Additionally, unlike standard business loans, Lavu Capital merchant cash advances do not have interest which compounds over time. Our merchant cash advances also do not have sign-up, late, annual fees, or minimum monthly payments.
Who is Parafin?
Parafin was founded with the mission to grow small businesses.
Started by a dedicated group of data scientists and engineers who watched small businesses get left behind during the pandemic, Parafin’s first focus is providing small businesses with fast, easy access to capital.
Capital is critical to small businesses because it allows owners to invest in and run their businesses the way they want to. Unfortunately, today it can be difficult to access and costly. On top of that, most institutions that offer capital aren’t invested in or aligned with the growth of those they offer it to.
Parafin offers capital through platforms that small businesses already manage their business with—like Lavu. Getting capital through a platform like Lavu means small businesses get to work with a partner that’s invested in their success and cares about their growth.
Today Parafin offers merchant cash advances—a type of financing that relies on business performance, not personal credit history, and doesn’t require any personal guarantees. Payment is tied to future sales so it’s paid as your business ebbs and flows organically.
In the future, Parafin will offer even more tailored and flexible financing options that provide small businesses owners with the tools they need to grow and run their businesses the way they want to.
Parafin is a business financing provider that Lavu has partnered with to offer funding to Lavu businesses. All financing is governed by Parafin Terms and Conditions.
Eligibility
How are offers determined?
Our eligibility criteria looks at multiple business performance factors in order to determine the best offer available to your business. That means increasing your sales, and maintaining consistent sales over time, will help increase your chances of getting an offer.
How do I know if I’m pre-approved for a cash advance?
If you’re pre-approved for an offer, you’ll be able to view it from your Lavu Capital dashboard. From time-to-time, you may also receive an email with details of a new offer when it’s available.
As you get close to finishing paying your advance, you may be eligible for another advance. If you are, you’ll be able to see it in your capital dashboard.
How long is my pre-approved offer valid?
Typically at least a week. Your business metrics are regularly reviewed for eligibility. Pre-approved offers can be increased, decreased, or revoked at any time.
Can I get a second advance?
You cannot have two advances at the same time.
However, our system performs regular eligibility checks so after you finish paying an existing advance, you may receive another offer if eligible.
How do I get more money?
There’s no way to change an existing advance—we cannot modify the amount of capital. However, after you pay your existing advance, you may be eligible for another advance which could be a higher or lower offer.
If you don’t have an existing advance, you can check your dashboard for any current offers.
What if I don’t have an offer?
If you don’t currently have an offer, it’s because your business is not eligible at this time.
You can increase your chances of getting an offer in the future by increasing your sales on Lavu and focusing on the consistency of your sales.
Accepting an offer
How do I accept funding from Lavu Capital?
To accept a cash advance offer:
- Open your Lavu Capital Dashboard
- Review the data sharing terms and click the check box if you agree to them
- Click View Offer
- Toggle the slider to select the capital amount that best fits your business
- Verify your bank account
- Click the check box to acknowledge the Terms of Service
- Click Accept to accept the cash advance
Why do I need to verify my bank account?
You’re required to verify your bank account for security and compliance purposes. Parafin, our business financing provider, must make sure that the funds are being sent to a bank account you own.
How is my cash advance sent to me?
After you accept your offer, our business financing partner, Parafin will review your cash advance.
As soon as the review is completed by Parafin, an ACH transfer to your bank account will be initiated. Typically the funds are available in your designated bank account within 1-2 business days.
Disclosure: Merchant cash offers and advances are provided by Parafin and governed by Parafin’s Terms of Service. Bank transfers are subject to review and may be rescinded. If your transfer is unable to be completed Parafin will provide notice as soon as possible. Merchant cash offers and advances from Parafin are not extensions of credit or loans.
How soon do I get access to my advance?
Typically the funds are available in your designated bank account within 1-2 business days.
After you accept your offer, our business financing partner, Parafin will review your cash advance. As soon as the review is completed by Parafin, an ACH transfer to your bank account will be initiated.
Disclosure: Merchant cash offers and advances are provided by Parafin and governed by Parafin’s Terms of Service. Bank transfers are subject to review and may be rescinded. If your transfer is unable to be completed Parafin will provide notice as soon as possible. Merchant cash offers and advances from Parafin are not extensions of credit or loans.
What happens if I don’t finish paying within the estimated duration?
Nothing. The estimated duration of your cash advance simply that—an estimate. Most cash advances have a 6, 9, or 12 month estimate.
The estimate is determined by your past business performance. For example, if you accept an advance with a 9-month estimated duration, that means we estimate you’ll pay off your obligation within 9 months—not that you have to.
If it takes you longer than estimated, there are no extra fees.
Fees & Payment
How do I pay the cash advance?
You don’t need to do anything. Your cash advance will be automatically paid with a percentage of your sales through Lavu.
The set percentage you’ll pay from sales is visible at the time you accept your advance, and anytime from your Lavu Capital Dashboard.
Simply continue using Lavu as you normally do, and we’ll take a percentage of your daily sales from your bank account on your existing payout schedule and put that towards your total outstanding balance.
What’s the capital fee?
The capital fee is a flat fee for the cost of getting access to capital upfront. The capital fee varies by offer size.
As an example, a $10,000 offer may have a capital fee of $750. The $750 capital fee would be added to the offer amount, and you would pay $10,750 in total.
What’s the payment rate?
The payment rate is a set percentage that’s deducted from your sales on your payout schedule.
For example, if your payment rate is 9% and you do $1000 of sales in a week, you’ll see $90 deducted toward paying your outstanding obligation on your Lavu payout date.
What does the cash advance cost overall?
A flat-rate, fixed “capital fee” is charged for your cash advance. The fee depends on the amount of capital you accept, and will not change after you have accepted the offer. Your capital fee will be clearly displayed before you accept your offer.
Is there a minimum payment amount?
No. There’s no minimum payment amount required.
Payment is based on a fixed percentage of your gross sales and deducted automatically on your payout schedule.
Is there any interest?
No. There is no interest on your merchant cash advance.
There is a flat, fixed capital fee for the advance which will never change after you’ve accepted an advance. The fee depends on the amount of capital you accept.
When are my payments charged?
It varies by business. Your business’s cash advance payment schedule will match your payout schedule with Lavu today.
For example, if you’re currently on weekly payouts, our partner Parafin will collect payment weekly after your merchant payout. Your payment won’t be charged until after you’re paid by Lavu.
Where can I find my payment activity?
You can review your payment activity in your Lavu Capital Dashboard. Clicking on a payment in your Recent Activity section will expand to show more details.
What happens if my sales slow down?
The amount you pay will decrease too.
Because your payment obligations are tied to a set percentage of your sales, you’ll pay less—or nothing—on slow days. There’s no set time by which your advance needs to be paid.
Are there late fees?
No. There are no late fees for a merchant cash advance.
If it takes you longer than the estimated duration of your advance, that is okay. You won’t be charged any late fees.
How long do I have to pay the advance?
As long as it takes. There’s no extra fee if it takes you longer than expected.
However, because your offer is determined in part by your past business performance, our estimate is that you’ll pay your cash advance within the estimated time frame stated when you accepted it.
Can I pay my cash advance early?
Yes. It’s not required, but if you want to, you are able to make a one-time payment to pay part or all of your cash advance. Please note, you can only make a one-time payment after you’ve paid at least 25% of your outstanding advance.
To make a one-time payment:
- Open your Lavu Capital dashboard
- Navigate to the Financials page
- Click View details
- Click Make a one-time payment
- Enter how much you’d like to pay or select the outstanding amount
- Click Submit
Troubleshooting
I accepted the cash advance. Why is the money not in my bank account yet?
After you click to accept your cash advance, Parafin, our business financing provider will review it. After Parafin approves your advance, the funds will be transferred to your designated bank account via ACH.
Bank transfers generally take 1-2 business days to appear in your account. Business days are Monday-Friday, excluding bank holidays.
Merchant cash offers and advances are provided by Parafin and governed by Parafin’s Terms of Service. Bank transfers are subject to review and may be rescinded. If your transfer is unable to be completed, Parafin will provide notice as soon as possible.
Why are you taking multiple payments on the same day?
We don’t debit multiple payments on the same day, but there could be a few reasons you see multiple payments posted to your account on the same day.
Bank transfers typically take 1-2 business days to appear in your account, so you may see a debit from your bank account today that is matched to a prior day’s sales amount.
Additionally, every bank works differently. Your bank may process individual payments in a single “batch”, so some payments may post to your bank account together on the same day, even though they were initiated on different days.
To view payment details:
- Visit your Lavu Control Panel
- Under Recent Activity, you can review your transactions
- Click a transaction to expand and view full payment details
Can I cancel my cash advance?
Yes—but only if the funds haven’t been sent yet. Contact support as soon as possible to find out if your advance is cancellable.
If the funds have already been set to your account, or if they are already in your account, your cash advance cannot be canceled.
Who can I reach out to if I have additional questions?
For questions or concerns, please reach out to support@lavu.com.
