What is Bitty Advance?

Dena Standley | May 12, 2023

Dena Standley
Legal Expert, Paralegal
Dena Standley, BA

Dena Standley is a seasoned paralegal with more than 20 years of experience in legal research and writing, having received a certification as a Legal Assistant/Paralegal from Southern Technical College.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Bitty Advance provides emergency funding to small and medium-sized businesses. Business owners can receive up to $25,000 on the same day of application. These are not traditional loans but Merchant Cash Advances (MCA). Bitty Advance "buys" your future revenue. So businesses pay back a percentage of their proceeds from the following months.

Small businesses that do not want hard credit checks or do not have excellent scores may prefer merchant cash advances. These lenders offer expensive funding but are fast and have a straightforward application process.

Bitty Advance has successfully set itself up as a cash advance provider since 2018. While many business owners are still new to this type of lending, some are already in trouble. They face unprecedentedly high fees, UCC liens, and bank account freezes.

This article discusses what you need to know about Bitty Advance, qualifications for funding, and possible repercussions if you default. We will also briefly discuss how to get out of debt.

Who is Bitty Advance?

Bitty Advance is a legitimate lender serving small and mid-size businesses across all 50 states. Its headquarters is in Florida. The company's alternate name is Bitty Advance 2, LLC, and its physical address is 1855 Griffin Road, A-474, Dania, FL 33004.

Rather than offer traditional personal loans, Bitty Advance provides advances targeting LLCs and corporations needing quick cash. This type of funding is known as Merchant Cash Advances (MCA).

MCAs are unique in that the lender buys the borrower's future revenue. Simply put, Bitty Advance gives you (the business owner) money now, and you agree to pay it directly from future income. Repayments can be fixed amounts or a percentage of how much the business makes.

You can borrow between $2,000 and $25,000 from Bitty Advance. But the limit can go up to $35,000 under certain circumstances.

Bitty Advance started operating in 2018. The Better Business Bureau BBB opened a file for it on 11/9/2021, but it is yet to be accredited. Since then, consumers have been submitting complaints on Bitty Advance's profile. So far, it has closed only four complaints in the past 12 months.

The BBB gives it an F rating, the worst possible.

What are the qualifications for Bitty Advance's funding?

Businesses in most industries are welcome to apply for funding through Bitty Advance, but they must meet the following qualifications:

  • Have a business checking account
  • Must have been in business for over six months
  • Must be making at least $5,000 a month in the past three months
  • Have a FICO score of at least 450

Some advantages of Bitty Advance "loans" are:

  • The company does not conduct hard inquiries on your credit
  • No collaterals are necessary
  • There are no interest rates
  • It is a reliable way to access same-day funding
  • Early repayment can earn you discounts

Businesses also need to consider the following cons of working with Bitty Advance.

  • High rates. MCAs are some of the most expensive business funding options. Borrowers typically pay back double figures in interest. These can go up to triple digits, depending on the rates and how much your business makes during the repayment period.
  • Bitty Advance does not report timely payments to your credit, denying you precious positive history. However, if you default, the account goes straight to your file.
  • Merchant cash advances are not loans. So you cannot just back out and pay it off. By signing the contract, you agree to give away your business's earnings.

Defaulting can result in other serious consequences. Let’s explore them.

The repercussions of defaulting a Bitty Advance Loan

Aside from reporting to the credit bureaus and dropping your score, defaulting can lead to Bitty Advance invoking the judgment by confession agreement. A confession judgment clause allows Bitty Advance to obtain a default judgment without notice or court hearings.

If Bitty Advance gets the judgment, it can freeze your bank accounts or place UCC liens on a property or the business's receivables.

MCA providers can also enforce your personal guarantee. If that happens, you could lose money in your personal bank accounts.

Defaulting can also lead to Bitty Advance outsourcing the debt to a third-party debt collector.

Handling debt collectors while fighting to keep your business afloat is not the outcome business owners anticipate. But if it happens, use SoloSuit to relieve some of that stress.

For example, our Answer document can help you win your debt collection lawsuit. Check out the following video to learn how to respond to a debt lawsuit against Bitty Advance:

What can you do if you default?

A few options exist for businesses that default on Bitty Advance's loan.

  • Find a way to vacate the default judgment. You may need to hire a lawyer, but it is worth trying.
  • Settle the debt for less using SoloSettle.
  • File for bankruptcy and include the Bitty Advance debt so that it gets discharged.

If you are new to Merchant Cash Advances, you may need time to understand how they work before you get yourself and your business into a financial crisis. Although quick funding may be tempting, the high costs may not be worth it eventually.

If you are already in collections, use SoloSuit to communicate with the debt collector and prevent a lawsuit or respond to the suit before going to court—and win.

What is Solo?

Solo makes it easy to resolve debt with debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt. SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

SoloSettle can help you contact your debt collector or creditor and negotiate the debt to settle for less, all online. It simplifies and streamlines the process to settling your debt.

No matter where you find yourself in the debt collection process, Solo is here to help you resolve your debt.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

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