Finder makes money from featured partners, but editorial opinions are our own. Advertiser Disclosure

Compare working capital loans

Get the cash you need to cover everyday expenses or chase new opportunities.

While there are several types of working capital financing, they generally come with short terms and don’t require any specific collateral. For this reason, business financing companies tend to have strict eligibility requirements.

Find out what options are available for your business by selecting information about your credit score, time in business and funding needs.

1 – 3 of 3
Name Product Filter Values Min. Amount Max. Amount APR Requirements
Lendio business loans
Finder Rating: 4.75 / 5: ★★★★★
Lendio business loans
$500
$5,000,000
Starting at 6%
Operate business in US or Canada, have a business bank account, 560+ personal credit score
Submit one simple application to potentially get offers from a network of over 300 legit business lenders.
OnDeck business lines of credit
Finder Rating: 4.7 / 5: ★★★★★
OnDeck business lines of credit
$6,000
$100,000
29.9% to 99.9%
Companies in business at least 1 year, $100,000+ in gross annual revenue, majority owner with a 600+ personal credit score, active business checking account
A leading online business lender offering flexible financing at competitive fixed rates.
Fundbox lines of credit
Finder Rating: 4.2 / 5: ★★★★★
Fundbox lines of credit
$1,000
$150,000
Not stated
6 + months in business, $100,000+ in annual revenue, 600+ credit score
Get flat rate, short-term financing based on the financial health of your business, not your credit score.
loading

Compare up to 4 providers

How to get working capital financing

You can get a working capital loan by following these steps — though the order can vary depending on the type of business financing.

  1. Calculate how much working capital you need by using the working capital formula or estimating how much you need to borrow for a new project.
  2. Compare lenders that offer working capital loans, paying attention to the amount of funding available, rates, terms, fees and requirements.
  3. Prequalify with your top choices, usually by filling out a form online. If you’re applying with a bank or factoring company, you might have to call to ask for a quote.
  4. Fill out the application with your top choice after comparing prequalification offers.
  5. Submit any required documents, like recent bank statements, your business balance sheet, accounts receivable and accounts payable.
  6. Review and sign your loan offer, taking note of the rates, terms and due date.

Types of working capital loans and how they work

These are the main types of working capital business loans available through banks, online lenders and any other financial institution.

Short-term loans

Short-term loans are one of the most common type of working capital financing. While long-term loans are designed to finance large projects, short-term loans are designed to cover operating costs.

These give you all of the funds at once, which you repay plus interest and fees in monthly or weekly payments. Usually you can borrow from $1,000 to $500,000, with loan terms between six and 36 months. Rates can start at around 4% APR — but can top 90% APR in some cases.

These are best for businesses that only occasionally need working capital. While many lenders offer discounts to repeat customers, it’s not as convenient as a line of credit.

National Funding business loans

Finder rating 4.65 / 5 ★★★★★

National Funding is an online lender that offers working capital loans to most small businesses. Its rates are relatively low for an online lender. And its working capital loans come with terms of 12 months or less. But it requires daily payments, which can be difficult for some businesses to manage. And the rates and terms from its partners could be higher than expected.

OnDeck short-term loans

Finder rating 4.6 / 5 ★★★★★

OnDeck's short-term business loans are designed for working capital. With minimal paperwork you can borrow as much as $250,000 with a turnaround as soon as the day you're approved in some cases. OnDeck accepts fair credit and has relatively flexible requirements compared to a bank loan — plus it only requires a lien on business assets. But while it offers reduced fees for repeat borrowers, OnDeck's APRs are some of the highest out there. You can likely find a lower rate with another lender, if you can qualify.

Lines of credit

A working capital line of credit gives your company access a credit limit, which your company can draw from as needed to cover short-term business expenses. Usually working capital credit limits stop at around $250,000.

This type of financing comes with slightly higher rates and fees than a term loan. Often, each withdrawal turns into a short-term loan, which you repay in installments over a term of six to 12 months.

These are best for small businesses that frequently need access to cash. But it can also be useful to have on hand to cover emergency expenses.

Fundbox lines of credit

Finder rating 4.2 / 5 ★★★★★

Fundbox is one of the few lenders that truly requires no paperwork on its lines of credit. Instead, it connects with your business's accounting software when you apply. There's no fee to make a withdrawal, and startups as new as six months can qualify for this working capital loan. But it charges weekly repayments and has a lower-than-average credit limit. Longer terms also come with higher rates.

SBA loans

A Small Business Administration (SBA) loan is financing backed by the federal government. You can use most SBA loans for working capital, including the popular SBA 7(a) and Express loan programs. The SBA’s Working Capital CAPLine also offers small businesses financing specifically designed to cover everyday business operations.

SBA loans can run as high as $5 million in many cases. But how big of a loan your business can get depends on your business’s financial health. The application process can also take over a month, and lenders require a minimum personal credit score of 620.

Lendio business loans

Finder rating 4.75 / 5 ★★★★★

Lendio is an online business loan marketplace that can help your small business connect with an SBA lender. Its partners offer SBA 7(a) and Express loans, which your business can use for working capital expenses. Its online platform makes it easier to complete the application and keep track of documents. Plus it has personal funding managers on staff to help you out if you're stuck.

SmartBiz business loans

Finder rating 4.5 / 5 ★★★★★

SmartBiz is an online connection service that specializes in SBA 7(a) lenders and banks. It also offers packaging services to cut down the turnaround time from months to weeks — for a fee. But it's best for more-established businesses and owners who have good credit. And if you need less than $30,000, another lender is a better choice.

Merchant cash advances

Merchant cash advances offer an advance on future credit and debit card sales for consumer-facing businesses. How much you can borrow usually depends on the past three to six months of revenue. And instead of having a loan term, you repay the advance plus a fee with a percentage of your daily sales.

Merchant cash advances are available to businesses in the startup phase and small business owners with bad credit. But it’s one of the most expensive financing options out there, with rates topping 300% APR in some cases.

Fora Financial business loans

Finder rating 4.1 / 5 ★★★★★

Fora Financial offers some of the lowest-cost merchant cash advance out there, with factor rates starting as low as 1.1. It also offers an early payoff discount and doesn't charge a monthly maintenance fee. Businesses that have been around for as little as six months can qualify as long as they have $5,000 in monthly credit card sales and no open bankruptcies. But it doesn't display rates online, and it can take as long as 72 hours to receive your funds.

Invoice financing and factoring

Invoice financing and factoring offer an advance on unpaid invoices for business-facing businesses (B2B). Invoice financing allows you to retain control of your accounts receivable as your customers pay them off, and is usually available for smaller amounts — say under $30,000 or $50,000. Invoice factoring involves selling unpaid invoices to a third party at a discount.

This type of business funding doesn’t rely on your credit score or time in business. But, like a merchant cash advance, it’s one of the most expensive financing options available and should be saved as a last resort.

Lendio business loans

Finder rating 4.75 / 5 ★★★★★

Lendio is an online marketplace that can help your business prequalify with multiple factoring companies, including TBS Construction Funding and Raistone Capital. You can receive up to 90% of your accounts receivable in as little as 24 hours. Factor rates start at 2%, and you have as long as a year to pay back the advance. But because it's not a direct lender, it's worth reading up on the companies you're connected with before you go through with the application.

Microloans

Microloans are are short-term loans from nonprofit lenders. Unlike most financial institutions, microlenders often offer financing to entrepreneurs who need working capital to start a new business. These often don’t require collateral or come with strict credit score minimums.

Usually you can borrow up to $50,000 with terms from six to 12 months. But these can take weeks to fund and rates often start a little higher than an online or bank loan.

Kiva business loans

Finder rating 3.7 / 5 ★★★★★

Kiva is a nonprofit that offers crowdfunded microloans of up to $15,000 with a 0% APR. There are no credit or time in business requirements. But to qualify, your business must raise funds from at least five members of your social network over 15 days. After that, most small businesses can receive your funds within 30 days. The long turnaround may be worth the 0% APR in some cases.

How to use the funds

You can use the funds from a working capital loan for almost any operational costs. Small businesses often use this type of business financing to pay bills, pay employees or refinance debt.

Many also use a working capital loan to take advantage of a new business opportunity or prepare for a seasonal increase in sales. For example, businesses often need extra working capital to pay for hiring expenses, inventory and advertising.

How to qualify

Your small business generally needs to meet the following requirements to qualify for a working capital loan.

  • At least 12 months in business
  • Annual revenue of $100,000 or higher
  • Good credit score of at least 670
  • Business bank account

You don’t necessarily need to meet all of these requirements to qualify. In fact, there are business financing options for every type of business — including startups and small business owners with bad credit. But you’ll have more of a selection to choose from if you meet these requirements.

Bottom line

A working capital loan can give your business funding to cover operating expenses or grow when your current assets aren’t enough. And there are a variety of business funding options for startups, established firms and all credit types.

But consider another type of business loan if you want to invest in a long-term project or make a large purchase. Compare more options with our guide to the best business loans of 2022.

More guides on Finder

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and finder.com Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site