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.
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You can get a working capital loan by following these steps — though the order can vary depending on the type of business financing.
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.
Compare lenders that offer working capital loans, paying attention to the amount of funding available, rates, terms, fees and requirements.
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.
Fill out the application with your top choice after comparing prequalification offers.
Submit any required documents, like recent bank statements, your business balance sheet, accounts receivable and accounts payable.
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 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.
Loan amount
$5,000 – $500,000
APR
Undisclosed
Min. Credit Score
600
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.
Pros
Low minimum credit score
Funding as soon as next-day
Relatively low rates
Cons
Daily payments
Potentially higher rates from partners
Doesn't disclose costs on website
Loan amount
$5,000 – $500,000
APR
Undisclosed
Min. Credit Score
600
Loan term
24 to 60 months
Requirements
In business 6+ months and make at least $250,000 in annual sales. Other loan types have additional requirements.
OnDeck's short-term business loans are designed for working capital. With minimal paperwork you can borrow as much as $400,000 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.
Loan amount
$5,000 – $400,000
APR
Average is 56.4% to 56.6%.
Min. Credit Score
625
OnDeck's short-term business loans are designed for working capital. With minimal paperwork you can borrow as much as $400,000 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.
Pros
Same-day funding available
Reduced fees for repeat borrowers
Reports to business credit bureaus
Cons
High starting APR
Not all industries can qualify
Daily or weekly repayments
Loan amount
$5,000 – $400,000
APR
Average is 56.4% to 56.6%.
Min. Credit Score
625
Loan term
3 to 24 months
Requirements
Companies in business at least 1 year, $100,000+ in gross annual revenue, majority owner with a 625+ personal credit score, active business checking account
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 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.
Loan amount
$1,000 – $250,000
APR
Starts at 4.66%
Min. Credit Score
600
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.
Pros
No paperwork
No draw fees
Qualify with just six months in business
Cons
Lower-than-average credit limits
Higher fees for longer terms
Weekly payments
Loan amount
$1,000 – $250,000
APR
Starts at 4.66%
Min. Credit Score
600
Loan term
12 or 24 weeks
Requirements
$30,000+ in annual revenue, 3+ months in business, 600+ FICO credit score, business checking account
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 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.
Loan amount
$1,000 – $5,000,000
APR
Varies by lender
Min. Credit Score
580
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.
Pros
SBA 7(a) and Express loans available
Simplified online application
Staff can help with application
Cons
Takes up to two months to fund after approval
Not a direct lender
Mixed reviews of customer service
Loan amount
$1,000 – $5,000,000
APR
Varies by lender
Min. Credit Score
580
Loan term
3 months to 25 years
Requirements
Operate business in US for 6 months or more, have a business bank account, minimum 580 personal credit score, at least $8,000 in monthly revenue.
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.
Loan amount
$50,000 – $350,000
APR
Prime Rate, plus 3% to 5.75%
Min. Credit Score
660
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.
Pros
Offers packaging services
SBA and non-SBA loans
Faster SBA loan turnaround
Cons
Packaging and referral fees
Can still take up to 30 days
Loan amount
$50,000 – $350,000
APR
Prime Rate, plus 3% to 5.75%
Min. Credit Score
660
Loan term
10 years
Requirements
660+ credit score, 2+ years in business, $50,000+ in annual revenue, no bankruptcies or foreclosures in past 3 years
Loan amount
$50,000 – $350,000
APR
Prime Rate, plus 3% to 5.75%
Min. Credit Score
660
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 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.
Loan amount
$5,000 – $1,500,000
APR
Undisclosed
Min. Credit Score
570
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.
Pros
Low cost for a merchant cash advance
Only six months in business required
Discount for early payments
Cons
More expensive than most working capital loans
Potential 72-hour turnaround
Loan amount
$5,000 – $1,500,000
APR
Undisclosed
Min. Credit Score
570
Loan term
4 to 18 months
Requirements
6+ months in business, $25,000+ gross monthly sales, no open bankruptcies
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 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.
Loan amount
$1,000 – $5,000,000
APR
Varies by lender
Min. Credit Score
580
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.
Pros
Compare multiple offers from factoring companies
Get funded in as soon as 24 hours
Long term of up to 12 months
Cons
Not a direct lender
Doesn't disclose requirements for factoring
Loan amount
$1,000 – $5,000,000
APR
Varies by lender
Min. Credit Score
580
Loan term
3 months to 25 years
Requirements
Operate business in US for 6 months or more, have a business bank account, minimum 580 personal credit score, at least $8,000 in monthly revenue.
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 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.
Loan amount
$1,000 – $15,000
APR
0%
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.
Pros
No interest or fees
Loans as small as $1,000
Cons
Can take up to 45 days
Relies on social network
No customer service line
Loan amount
$1,000 – $15,000
APR
0%
Loan term
6 months to 3 years
Requirements
Have at least ten friends and family members willing to contribute to your loan, live in the US, ages 18+, not in bankruptcy or foreclosure, not under any liens, not engaged in: multi-level marketing, direct sales, pure financial investing or illegal activities
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 2026.
Anna Serio was a lead editor at Finder, specializing in consumer and business financing. A trusted lending expert and former certified commercial loan officer, Anna's written and edited more than 1,000 articles on Finder to help Americans strengthen their financial literacy. Her expertise and analysis on personal, student, business and car loans has been featured in publications like Business Insider, CNBC and Nasdaq, and has appeared on NBC and KADN. Anna holds an MA in Middle Eastern studies from the American University of Beirut and a BA in Creative Writing from Macaulay Honors College at Hunter College, CUNY.
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