Fill in the table with the required features, address features related to working capital loans only
Company
|
Min. Credit Score
|
Min. Time in Business
|
Min. Annual Revenue
|
Loan Amount
|
Interest Rate
|
Fundbox
|
500
|
6 months
|
$180,000
|
Up to $150,000
|
4.66% minimum rate
|
BlueVine
|
600
|
6 months
|
$120,000
|
$5,000-$250,000
|
4.8% minimum rate
|
Credibly
|
600
|
6 months
|
$120,000
|
Up to $250,000
|
Factor rates starting at 1.15
|
Fora Financial
|
500
|
6 months
|
$12,000
|
Up to $500,000
|
Factor rates range from 1.1 to 1.3
|
Torro
|
680
|
6 months
|
$120,000
|
Up to $575,000
|
APR up to 36%
|
Biz2Credit
|
575
|
6 months
|
$250,000
|
$25,000-$2,000,000
|
Variable, depends on applicant
|
Best Working Capital Loans - Features Comparisons
Fill in the table with the required features, address features related to working capital loans only
What is a Working Capital Loan?
A working capital loan provides you with the funds you need in order to pay for a variety of business requirements. Unlike other term loans and equipment financing that require you to use funds for a specific purpose, working capital loans are more flexible and can be used for a broader array of purposes.
When You Should Consider a Working Capital Loan
Working capital loans are a good option whenever you need to tap into funds to keep your regular business operations running, to buy equipment or material, or to cover other costs like payroll if money is tight. Qualifications for working capital loans are usually less stringent than other term loans, which makes them an attractive option for business owners with less than excellent credit, or for whom a traditional bank loan isn’t likely.
A working capital loan can also be a better fit if time is of the essence and waiting for a term loan from a bank isn’t feasible. Working capital loans can come with higher interest rates and fees, however, so they might not be right for everyone.
How to Get a Working Capital Loan
You can get a working capital loan from a variety of sources. Online lenders tend to provide application review and funding more quickly than conventional banks. These lenders also offer different features and technology to make it easier to apply for and manage your loans. You can request a quote quickly through online providers and get approval within hours in many cases.
The Small Business Administration (SBA) also offers working capital loans through its partner banks. SBA working capital loans can be a great option because they tend to come with lower interest rates than traditional term loans. The SBA does tend to favor applicants with a long track record, good credit history, and other attributes that speak to the success of the company.
The SBA usually requires more information than online lenders, so you may need to factor in a longer lead time if you opt to go with SBA financing.
Types of Working Capital Loans
There are two types of working capital loans: short-term loans and business lines of credit.
Short-term working capital loans: provide small businesses with a lump sum of money with a set repayment schedule.
Business line of credit: provides you with a set amount of money that you can pull from repeatedly during the life of the loan. This means you can withdraw money from your line of credit repeatedly so long as you don’t exceed the total amount of money the lender spells out in your contract.
What is the Difference Between a Working Capital and Term Loan?
Working capital and term loans aren’t always the same, although a working capital loan can often take the form of a term loan. Working capital loans do not come with rules around how you spend the money and what you spend it on. With other term loans, your lender may require you to demonstrate what you’re spending the money on and restrict you from using the funds for other purposes. A working capital loan can be used for a variety of purposes, however.
Conclusion
Working capital loans can be a great option for small business owners who need quick access to capital with a fast approval process. There are a variety of lenders who can help you get the cash you need while working with your credit score and business history. Some may charge you higher interest rates based on your creditworthiness, while others may include loan fees that others don’t. The best thing you can do is understand what each lender is looking for in their ideal candidate, how much they charge in fees, and how quickly you need to repay your debt.