Wells Fargo-supported Fund Aims to Refinance MCAs

Sixty-one percent of all deals funded by Founders First Capital Partners went toward refinancing merchant cash advances. That’s intentional, according to the company, which just announced a capital raise of $19 million for one of its small business financing funds. Investors in the fund include Wells Fargo Foundation, Deutsche Bank Americas Foundation, Sunrise Banks, Community Reinvestment Fund USA, and others.

Founders First offers revenue-based financing, term loans, and hybrid loans that combine both. The company says borrowers that refinance their MCAs with Founders First experience an average effective APR decrease of 15 percentage points.

“To help meet that demand [of refinancing MCAs], Wells Fargo contributed $500,000 to Founders First, fiscally sponsored by Realize Impact,” a press release said.

Founders First does not advertise its own APRs, but according to a hybrid loan contract it originated in 2023 that deBanked obtained, it said that amounts collected from the revenue-based financing component of the loan should be excluded from interest and interest rate calculations and should not be considered when determining whether the loan exceeds a state’s maximum allowable interest rate.

Many of the company’s case studies tout the benefits of revenue-based financing. In one case, a borrower received $500,000 and grew revenue by 90% over 12 months. Founders First said that “revenue-based financing was ideal as the payments were increased during stronger revenue months.”

The company has deployed more than $20 million in capital, and 70% of its customers have increased their revenue. Its financing has also contributed to the hiring of more than 2,700 new full-time employees. Businesses can obtain funding of up to $2 million. In Founders First’s 2025 Impact Report, the company says its financing is better than SBA loans because borrowers do not need strong credit or assets. It also touts how more than half of its portfolio consists of refinanced MCAs.