Short answer
Kapitus is one of the largest and longest running merchant cash advance funders in the United States, operating since 2006, and it carries an F rating from the Better Business Bureau. That is the lowest grade the BBB issues, and the reasons it publishes are specific: failure to respond to 5 complaints, out of 9 filed. It is not BBB accredited. The company also operates under at least three names, Kapitus, Strategic Funding Source Inc. and Kapitus Servicing Inc., the last of which is the entity that typically appears as plaintiff when merchants are sued.
This page summarizes what the public record shows as of August 13, 2026: the BBB business profile and rating rationale, state licensing records, corporate registration details and publicly reported litigation. Where a claim comes from a third party analysis rather than a primary record, we say so.
The F rating, and why the reason matters more than the grade
Plenty of funders in this directory have complaints. What separates Kapitus is what the BBB says drove the grade.
Rating: F.
The lowest grade the BBB issues.
Not accredited.
Kapitus has not sought or holds no BBB accreditation.
Stated reason one.
Failure to respond to 5 complaints filed against the business.
Stated reason two.
9 complaints filed against the business.
File opened.
August 5, 2010. Business incorporated January 24, 2006.
The practical takeaway is that five unanswered complaints out of nine is a response rate, not an accident. A company that does not reply to the BBB when a customer escalates is telling you something useful about what happens when you have a problem mid program, which is exactly the moment a merchant cash advance customer most needs a response. Compare that against the funders on this site that answered every complaint within days.
One important limitation: a BBB grade reflects complaint handling and transparency, not the legality or fairness of any particular agreement. Nine complaints is a small number relative to the volume a funder this size writes. We report the F because it is verifiable and because the stated reason is behavioral, not because it settles the question on its own.
Three names, one company, and why that matters to you
Kapitus operates under multiple corporate identities, and business owners routinely fail to connect them.
Kapitus.
The consumer facing brand. New York office at 120 West 45th Street; headquarters in Arlington, Virginia.
Strategic Funding Source, Inc.
Listed by the BBB as an alternate name. This is the older identity many merchants signed with.
Kapitus Servicing, Inc.
The entity that commonly appears as plaintiff in collection actions.
Licensing.
California lender license number 603G807.
Management.
Andrew Reiser, CEO. Stephen Lerch, CFO. Benjamin Johnston, Head of Strategy and Corporate Development.
What the record does not give you is a single name to search. If you check UCC filings, judgments or dockets under Kapitus alone, you will miss anything recorded under Strategic Funding Source or Kapitus Servicing. Search all three. This also matters legally: where one entity funds an advance and a different entity enforces it, the enforcing party's standing to sue can become a live question, and courts have taken that question seriously.
The litigation posture
Kapitus Servicing, Inc. appears regularly as a plaintiff in merchant cash advance collection litigation, and it is named on the funder lists published by several merchant cash advance defense firms as one of the parties they most often oppose.
What the defense bar reports
Published analyses by merchant cash advance defense firms describe Kapitus Servicing as having generated an unusually high volume of reported New York appellate decisions in recent years, including decisions from the Appellate Division, First Department. Those characterizations come from firms that market defense services against this funder, so read them as interested analysis rather than neutral data.
The outcome that matters more than the volume is that these cases are being contested and are producing appellate law, which is not what happens when merchants simply pay. It means defenses are being raised and, in at least some instances, are succeeding on appeal.
Default judgments are not always final
Reported New York practice includes a case in which a court vacated a default judgment against an out of state merchant on a cash advance agreement, finding the merchant had both a reasonable excuse for the default and a potentially meritorious defense, including a question over the plaintiff's standing to sue.
The outcome for business owners generally is that a judgment entered because nobody appeared is the category of judgment most often reopened. If a judgment already exists against your business, that is a reason to get it reviewed quickly, not a reason to conclude the matter is closed.
A word on sourcing: we have not independently audited every docket involving these entities, and we do not publish case counts we have not verified ourselves. Search Kapitus Servicing, Inc. and Strategic Funding Source, Inc. on a public docket service and read the filings in your own jurisdiction before drawing conclusions about your situation.
Confessions of judgment and what changed in 2019
A confession of judgment is a clause that lets a funder obtain a court judgment without filing suit, serving you, or giving you any opportunity to be heard. The signed document goes to a court clerk and a judgment can be entered within days, after which accounts can be frozen before the merchant knows a case exists.
In 2019 New York amended its law to bar the filing of confessions of judgment against defendants located outside New York, which removed the most aggressive version of this tool from the industry. Older agreements can still contain the clause, and other enforcement routes remain. If you signed before 2019, or signed anything you did not read closely, find out whether a confession of judgment is in your file.
What to check in your own paperwork
Which entity signed.
Kapitus, Strategic Funding Source Inc. or Kapitus Servicing Inc.
Product structure.
A purchase of future receivables is an advance. A stated interest rate with a maturity date is a loan.
Factor rate and total payback.
In dollars, not percentages.
Remittance.
Daily or weekly, fixed amount or percentage of deposits.
Reconciliation.
Whether you can request an adjustment when revenue drops, what documentation triggers it, and the response deadline. Document every request in writing.
Confession of judgment.
Whether one exists, and in which state and court.
Personal guarantee.
Whether one was signed and whether it survives the business closing.
Frequently asked questions
What is Kapitus's BBB rating?
Kapitus holds an F rating with the Better Business Bureau, the lowest grade the BBB issues, and it is not BBB accredited. The BBB states its reasons on the profile: failure to respond to 5 complaints filed against the business, and 9 complaints filed in total. A rating is not a verdict on any individual funding agreement, but an F driven specifically by non-response is a documented pattern of not answering customers who escalate, and it is the single most checkable fact about this company.
Is Kapitus the same company as Strategic Funding Source?
Yes. The BBB profile lists Strategic Funding Source, Inc. as an alternate name for Kapitus. There is also a related entity, Kapitus Servicing, Inc., which appears as the plaintiff in collection litigation. Kapitus was incorporated on January 24, 2006 and has been operating for about 20 years. Its New York office is at 120 West 45th Street and its headquarters is in Arlington, Virginia. If you are searching UCC filings or court dockets for the company that funded you, search all three names.
Does Kapitus sue merchants?
Kapitus Servicing, Inc. appears regularly as a plaintiff in merchant cash advance collection actions, and merchant cash advance defense firms list it among the funders they most frequently litigate against. Analyses published by those firms describe Kapitus Servicing as having generated an unusually high volume of reported New York appellate decisions in recent years, including First Department rulings. We have not independently audited every docket, so treat volume characterizations as the analysis of the firms publishing them, and verify any specific case yourself.
Is Kapitus a merchant cash advance company?
Kapitus describes itself as providing short and long term financing to small businesses, and it operates across several products. It is best known in this industry as a merchant cash advance funder, and it holds a California Finance Lender license, number 603G807, issued by what is now the Department of Financial Protection and Innovation. What matters for you is not the category label but your own agreement: if it is structured as a purchase of future receivables with daily or weekly remittance, it functions as an advance regardless of what it is called.
What should I do if Kapitus has filed against me?
Do not ignore it, and do not assume a judgment is final. New York courts have vacated default judgments in merchant cash advance cases where the merchant showed a reasonable excuse for the default and a potentially meritorious defense, including challenges to the plaintiff's standing to sue. Standing questions arise particularly where an advance was funded by one entity and is being enforced by another. Get the agreement, the assignment history and the filing reviewed before you respond or pay.
Can a Kapitus balance be settled?
Frequently, yes. Merchant cash advance balances are among the most commonly negotiated business debts, and a funder with an active litigation posture is often more willing to resolve than merchants expect, because a settlement is faster and cheaper than enforcement. Outcomes depend on your agreement terms, how far behind you are, whether a personal guarantee was signed, what other advances you carry, and whether a case has already been filed. Send us the paperwork and we will tell you what is realistic in writing.
If the payments are the problem
If Kapitus is debiting faster than your business can carry, or a filing has already landed, the sequence matters. Establish which entity holds the paper, whether a personal guarantee or confession of judgment is in the file, and what else is stacked alongside it. Send us the agreement and your recent statements and we will tell you what is realistic in writing, before you commit to anything. If there is already a case filed against you, speak to a lawyer about the filing itself; we work on the debt, not the litigation.
