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Best Working Capital Loans

Working capital loans help you access the cash you need in order to fund everyday expenses. These business loans can help cover payroll, pay for day-to-day operations, or help keep your cash flow stable. Best of all, you may not need to put up collateral.

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Brian T. O'Connor
Copywriter & Content Marketer for Financial Services and Small Businesses

Reviewed by: Sarah Brooks, Personal Finance Writer and Editor

Fact Checked by: Dr. JeFreda R. Brown, DBA, CFEI, and a highly respected financial expert

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A working capital loan is the ideal choice if you need to borrow quickly to increase cash flow and can’t wait on a traditional bank loan. The best working capital loans offer a quick approval timeline, which puts cash in your hand within 24 hours of loan approval. In contrast, some bank loans can takes months from application to approval. 

If you’re looking for the business loans that can help you tap into the funding you need, look no further. Our team of financial experts reviewed and ranked the top online lenders to help you get funded.

Our Top Picks for Best Working Capital Loans

Fundbox review
  • No monthly fees or prepayment penalties
  • Same-day or next-day funding
  • Best for business lines of credit
Credit Score
Min. Credit Score 600+
Loan Amount
Loan Amount $5K - $150K
repayment
Loan Repayment 6-12 months
bluevine
  • Quick and simple application
  • Funding up to $250K
  • Interest rates as low as 4.8%
Credit Score
Min. Credit Score 625+
Loan Amount
Loan Amount $5K-$250K
loan repayment
Loan Repayment 6-12 months
credibly
  • Simple application process
  • As soon as same day funding
  • Open to high-risk industries
Credit Score
Min. Credit Score 500+
Loan Amount
Loan Amount $5K-$400K
Loan Repayment
Loan Repayment 6-18 months

How to Choose the Best Working Capital Loans

Working capital loans may vary as far as terms, repayment period, and totals are concerned. Working capital loans can take the form of short-term business loans or a business line of credit, depending on your needs.

When ranking working capital loans, our experts looked at the following factors:

  • Loan features: This includes working capital loan terms, repayment options, and loan amounts. Most are short-term business loans, meaning they require repayment over 12 months. You may also be able to get a business line of credit, which offers you a sum of money to borrow against during a set period.
  • Application process: How much information lenders require in your application. This also includes whether or not the lender needs to run a hard-pull or soft-pull of your credit score, and how long it will take to receive your funds.
  • Interest rates and fees: Interest rates vary between lenders, as do fees associated with taking out a loan. 
  • Qualification process: The credentials lenders require from applicants, including minimum credit score, annual revenue, and business history.
  • Customer support: Whether or not a lender offers access to live support representatives, as well as the availability of support across different channels. This also includes the amount and usefulness of supplemental information and tools. 
  • Online user reviews: What others have to say about their borrowing experience with a lender based on feedback from independent review sites.
  • Perks and bonuses: Other benefits associated with borrowing from a certain lender, such as payment flexibility, advertising transparency, and advanced technology.

Best Working Capital Loans for 2022 - Full Overview

There are several leading lenders for business loans. Each of the following lenders offers different benefits for business owners, as well as different applicant requirements. 

1. National Funding - Best For Repayment Discounts

National Funding working capital loans come with an early repayment discount. You can lock in a 7% discount on your remaining balance if you pay off your business loan in full within the first 100 days. This can make it more affordable to boost cash flow and fund the cost of everyday expenses like rent, payroll, and utilities or get you through slow seasons. 

Pros
Credit score not impacted with application
Positive reviews on sites like Trustpilot and Better Business Bureau (BBB)
No collateral needed
Cons
Daily or weekly repayments
Personal guarantee required
No mobile app

National Funding’s working capital business loans range from $5,000 to $500,000 with repayment terms between four months and two years. The pay rate starts at 1.10. To pursue a working capital loan, you’ll need a minimum credit score of 600, a business track record of at least six months, and $250,000 or more in annual revenue. 

The Bottom Line

If your business is financially stable and you could use some cash to pay for everyday expenses, a working capital loan from National Funding might be a solid choice. This is particularly true if you know you’ll be able to repay it in full within the first 100 days and qualify for the early repayment discount.

Try National Funding

2. Fundbox - Best for Credit-Conscious Borrowers

Fundbox

Fundbox offers two business loans that can help provide you with working capital: A term loan and a line of credit. For either loan, the application only requires a soft credit pull, which does not impact your credit score. Plus, Fundbox is also more flexible with credit scores than traditional lenders. 

Part of this flexibility is due to how the company deposits your loan proceeds and how it collects on your debts. They push money directly into your checking account and withdraw from your account automatically for repayment. This underlying tech streamlines the payment process, which is part of why Fundbox is more lenient with lower credit scores. 

Pros
Fast application process and payment
Soft credit pull doesn’t lower credit score
Two flexible repayment period options
No additional loan fees
Cons
High interest rates
Small credit limit (typically $150,000)
Auto-debit loan repayments

Fundbox offers up to $150,000 for both their term loan and line of credit. For term loans, Fundbox offers a 24 or 52 week repayment plan. For the line of credit, you choose a 12 or 24 week repayment plan each time you draw on your loan. Interest rates begin at 4.66%, but your rate could be higher depending on your credit score, among other factors. Businesses only need to have been in business for six months before applying for a loan. 

Features

Loan Terms

24 or 52 week schedule for term loans

12 or 24 week repayment plan for lines of credit

Loan AmountsUp to $150,000
Interest Rates4.66% minimum rate
Minimum Credit Score600
Minimal Annual Revenue$100,000
Time in Business Requirements6 months

 

The Bottom Line

Fundbox makes it easy to get a loan to boost your cash flow—even if your credit is a sensitive subject. Plus, Fundbox gets cash in your hand quickly. Decisions are made in as little as three minutes from application submission, and funds can be in your account as soon as the next business day. This is helpful if getting working capital is a time-sensitive matter, which is true in many cases.

Try Fundbox

3. Bluevine - Best for Line of Credit

BlueVine

Bluevine offers a business line of credit up to $250,000 that can help you get the working capital you need. This option is ideal for business owners who may want to dip into capital repeatedly without having to apply for a loan each time. Bluevine also deposits and withdraws funds directly from a linked checking account, which can provide speed and convenience. Bluevine runs a soft credit pull when you apply to help avoid negative changes to your credit. 

Bluevine also stands out in terms of customer service. The lender offers person-to-person customer support in addition to its online platform, which can go a long way when you have an issue getting paid or with repaying your loan.

Pros
Quick and easy application
Funds available in hours or days of loan approval
Accessible customer service
Also offers a competitive checking account
Cons
High late fees
High repayments due to 6-12 month terms
High interest rates for lower credit scores

Bluevine’s line of credit comes with a simple online application process and a decision within five minutes. Loan amounts range from $5,000 to $250,000 with rates starting at just 4.8%. As you pay off your line of credit, your available credit automatically replenishes up to your maximum loan amount for you to use again.

Features

Loan Terms6 to 12 week schedule
Loan Amounts$5,000 to $250,000
Interest Rates4.8% minimum rate
Minimum Credit Score625
Minimal Annual Revenue$120,000
Time in Business Requirements6 months

The Bottom Line

Bluevine is an alluring option for businesses that can afford the faster repayment period, and for those who want a line of credit versus a term loan. Their customer service and loan totals can help you get the funds you need with minimal hassle.

Try BlueVine

4. Credibly - Best for Flexible Qualifications

Credibly

Credibly is an established online lender that is more flexible with qualifications than other, newer lenders. Credibly offers small business loans for working capital up to $400,000. They have multiple loan types to choose from, including term loans, lines of credit, merchant cash advances, SBA loans, and more.

If you operate in a high-risk industry, such as law or real estate firms, Credibly could be a good pick. They’re one of the few lenders willing to work with these industries. There may be downsides, however, like high interest rates and origination fees.

Pros
Simple application
Flexible credit requirements (500 or higher)
Multiple loan types
High borrowing limits (up to $400,000)
Cons
High interest rates
Origination fees for most loans
Daily and weekly repayment likely required

Credibly offers small business loans that come with a lump-sum charge that’s a total percentage of the loan, rather than an interest rate. This is known as a factor rate, and is determined by the payback amount divided by the funding amount. Max loan sizes can be as high as $400,000, and terms last from 6-18 months.

Features

Loan Terms

6 to 18 month schedule

Loan Amounts

Up to $400,000

Interest Rates

Factor rates starting at 1.15

Minimum Credit Score

500

Minimal Annual Revenue

$180,000

Time in Business Requirements

6 months

The Bottom Line

If you need a larger loan amount and have less-than-ideal credit, Credibly may be your best option to increase cash flow. Credibly offers flexible criteria for business owners, and also lets you choose from a variety of loan types.

Try Credibly

5. Fora Financial - Best for High Loan Limits

Fora Financial
Pros
Fast funding in as little as 72 hours from loan approval
Broad range of credit for qualification
Covers broad variety of industries
High borrowing limits (up to $750,000)
Cons
Interest rates tend to be high
Comes with added fees

Fora Financial small business loans are quick to apply for, and funds typically hit your account within 72 hours of approval. You can get a free online quote and an application review directly thereafter. If you’re approved, you’ll get a short-term loan with 15-month terms and no collateral requirements. 

Features

Loan Terms

15 months

Loan Amounts

Up to $750,000

Interest Rates

Factor rates ranging from 1.1 to 1.3

Minimum Credit Score

500

Minimal Annual Revenue

$12,000 per month

Time in Business Requirements

6 months

The Bottom Line

Fora Financial makes it easy for business ownerss to access working capital loans quickly. They’re praised for their customer service, turnaround time on loans, and a straightforward lending process.

6. Biz2Credit - Best for Fast Approval

Biz2Credit

Biz2Credit is known for offering a fast turnaround time between application to funding. In most cases, Biz2Credit can get funds deposited within 72 hours after loan approval. This makes the lender an ideal source of funding if your small business needs fast access to capital.

Biz2Credit loans also come with significantly higher maximum loan amounts—up to $2 million. Interest rates are competitive, but qualifying for a loan can be harder here than with other lenders.

Pros
Funds hit your account in three business days
High maximum loan totals provide flexibility
Decent interest rates
Cons
Application requirements can be hard to meet
Loans may come with additional fees
Higher minimum annual revenue required

Biz2Credit’s working capital loans are its most flexible in terms of minimum credit score. You will need $250,000 in annual revenue and six months of operating time to qualify, though. 

Features

Loan Terms

12 to 36 months

Loan Amounts

$25,000 to $2 million

Interest Rates

Variable APR depending on the applicant

Minimum Credit Score

575

Minimal Annual Revenue

$250,000

Time in Business Requirements

6 months

The Bottom Line

Biz2Credit offers high maximum loan amounts, but also requires substantial annual revenue from your business. Their application process is more stringent, but rates will be more competitive and funding times are fast once approved.

Try Biz2Credit

7. Torro - Best for New Businesses

Torro

Torro provides two different kinds of loans: One for startups and one for those already operating. The startup loan helps new businesses borrow the funds they need in the early stages of their company’s life, often when money is needed the most.

Torro’sloans are designed for companies with at least six months of activity. Their startup capital loans are similar to a business line of credit and are limited to businesses with less than six months of activity. Existing businesses can borrow up to $575,000; whereas startups are capped at $125,000.

Pros
Helpful for companies less than six months old
Designed to provide start-up working capital
Easy qualification
High maximum loan amount ($575,000)
Cons
Interest rates can be high
Limited online customer chat
Higher credit score requirement than other lenders

Torro makes the lending process simple for new and existing businesses. Companies with half a year of operating history can apply for working capital loans with a 12- to 48-month term period, a variable repayment period, and a high maximum loan amount. A credit score of 680 will usually get your application approved, but a low credit score may come with higher interest. 

Features

Loan Terms

12 to 48 months

Loan Amounts

Up to $575,000

Interest Rates

APR of up to 36%

Minimum Credit Score

680

Minimal Annual Revenue

$120,000

Time in Business Requirements

6 months

The Bottom Line

Torro simplifies the borrowing process for small businesses and is willing to accept less-than-stellar credit. Torro is a good option for loans for new businesses, which often get shut out from borrowing.

Try Torro

8. Kabbage - Best for Low Annual Revenue

Backed by American Express, it takes just a few minutes to apply for a line of credit from Kabbage. Kabbage prides itself on empowering small businesses and helping them get the funding they need to succeed. 

Most lenders require high annual revenues to qualify for a working capital loan. Kabbage requires just $3,000 per month in revenue. This gives businesses a chance to increase their revenue by providing them with the money they need to do so.

Pros
Low annual revenue requirements
Accepts low credit scores
No prepayment penalties
Cons
Personal guarantee required
Monthly fee structure can be confusing

Kabbage extends working capital lines of credit to small businesses ranging from $2,000 to $250,000. Kabbage does not charge originations fees or prepayment penalties, but rather a monthly fee on your balance. For 6-month loans, fees range from 2-9%. For 12-month loans, they range from 4.5-18%, and for 18-month loans, fees range from 6.75-27%. 

To qualify for a line of credit from Kabbage, you’ll need a business checking account or online payment platform, be in business for at least one year, and be able to show at least $3,000 per month in revenue.

Features

Loan Terms6, 12, or 18 months
Loan Amounts$2,000 - $250,000
Interest Rates

6-month loan: 2-9%

12-month loan: 4.5-18%

18-month loan: 6.75-27%

Minimum Credit Score640
Minimal Monthly Revenue$36,000
Time in Business Requirements12 months

The Bottom Line

Kabbage line of credit is ideal for businesses looking to increase their profits but perhaps need a loan to do so. With low annual revenue requirements and flexible funding, Kabbage is an excellent choice for working capital loans.

Try Kabbage

Best Working Capital Loans - Features Comparisons

CompanyMin. Credit ScoreMin. Time in BusinessMin.RevenueLoan AmountInterest Rate
Fundbox6006 months$100,000Up to $150,0004.66% minimum rate
Bluevine6256 months$120,000$5,000-$250,0004.8% minimum rate
Credibly5006 months$180,000Up to $250,000Factor rates starting at 1.15
Fora Financial5006 months$144,000Up to $750,000Factor rates range from 1.1 to 1.3
Torro6806 months$120,000Up to $575,000APR up to 36%
Biz2Credit5756 months$250,000$25,000-$2,000,000Variable, depends on applicant
National Funding6006 months$250,000$5,000-$500,000Factor rates starting at 1.1
Kabbage64012 months$3,000 monthly revenue requirement$2,000-$250,000

6-month loan: 2-9%

12-month loan: 4.5-18%

18-month loan: 6.75-27%


























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 expenses. Unlike some loans 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. 

Why Should a Business Get a Working Capital Loan?

Research from Babson College shows that businesses that don’t receive the funding they need are forced to make cuts in technology and equipment investments (29%) and owner’s compensation (29%). Further, 48% said that they had trouble expanding into new markets, while 42% said that they had to take on more work themselves instead of hiring employees or contractors.   

Working capital loans are a good option when you need to keep your business operations running, purchase equipment, or cover other costs like payroll. Qualifications for working capital loans are usually less stringent than other term loans, which makes them an attractive option for small 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. Most loan decisions are made within minutes, and funds are dispersed within 72 hours from loan approval.

Types of Working Capital Loans

There are a few types of small business loans that can be used to fund capital: 

  • Short-term working capital loans provide small businesses with a lump sum of money with a set repayment schedule. 
  • Business lines of credit offer a set amount of money that you can pull from repeatedly during the life of the loan. Similar to a credit card, you only pay interest on the money you use.
  • SBA loans provide up to $5.5 million to be used as working capital or to buy fixed assets like real estate and equipment. These term loans are guaranteed by the Small Business Administration.
  • Merchant cash advances allow you to pay back your loan through debit and credit card sales. These loans may be a good option for businesses with relatively low credit scores but solid annual revenue. 

How to Qualify for a Working Capital Loan

Each lender has its own requirements for getting a working capital loan. Prerequisites may also vary depending on which loan type you decide to pursue. For example, an SBA loan may offer lower fees and longer repayment terms but will require more paperwork and processing time, while a business line of credit may be a better choice for a smaller, short-term loan. 

In general, expect the following requirements from lenders:

  • Minimum credit score: 500-640
  • Time in business: 6+ months
  • Annual revenue: $100,000+

Depending on the loan type and lender, you may also have to provide collateral and/or a personal guarantee.

How to Get a Working Capital Loan

Most online lenders make it easy to apply for a working capital loan through their website. Some offer apps or online dashboards that simplify the process of tracking your application and managing your account if approved. 

A typical application process looks like this:

  1. Gather your documentation including your tax ID number, financial statements, and banking information. Depending on the loan type, you may also need to prepare a business plan and provide a personal guarantee stating that you are responsible for paying off the loan.
  2. Apply online by following the lender’s instructions. Often, you will be assigned a representative who will guide you through the process. 
  3. Receive your loan offer. Review the fine print, paying close attention to the loan terms, interest and payments due, and any other requirements. 
  4. Sign your offer and receive your payments. Many lenders will link directly to your business bank account, speeding the funding process. 

Best SBA lenders for small businesses >>

Working Capital vs. Term Loan

Working capital and term loans are very similar business financing, with working capital loans often taking the form of a term loan. The main difference is working capital loans do not come with rules around how you spend the money and what you spend it on. With other term loans, such as equipment financing, your lender may require you to demonstrate what you’re spending the money on. A working capital loan, however, can be used for a variety of purposes.

Both options don’t normally require collateral, which is an asset that backs the loan. However, if you have collateral you can use, it’s worth mentioning to the lender as that may score you a lower interest rate.

15 Types of collateral you can use >>

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. 

 

Frequently Asked Questions(FAQ)

Are working capital loans a good idea?

These business loans can help small business owners cover short-term business expenses like payroll, inventory, or rent. This type of business financing is a good option for companies experiencing a temporary shortfall. However, if the business doesn’t improve, borrowers can find themselves saddled with debt. 

What are the dangers of working capital loans?

Many types of working capital loans come with high interest rates, which can add up if borrowers are not able to make timely payments on business financing. 

Can you get a working capital loan with bad credit?

Business owners can get a working capital loan with a credit score of 500+. Lenders consider factors like time in business and annual revenue in their approval process. 

What is the interest rate range on working capital loans?

Interest rates on these loans vary widely by lender and working capital loan type. You may find APRs as low as 4.6% and as high as 36%. 

Brian T. O'Connor

Written by: Brian T. O'Connor

Copywriter & Content Marketer for Financial Services and Small Businesses

Brian is a small business writer, focusing on the best ways for entrepreneurs to get their business off the ground. Brian is the co-owner of Brunch Money, a digital strategy agency based in Connecticut.

More about me
Sarah Brooks

Reviewed by: Sarah Brooks

Personal Finance Writer and Editor

Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.

More about me
Dr. JeFreda R. Brown

Fact checked by: Dr. JeFreda R. Brown

DBA, CFEI and a highly respected expert in personal and business finance

Dr. JeFreda R. Brown is more than a financial consultant: she’s an avid teacher and subject matter expert who helps people—individuals and groups in a business setting—master the skills they need to achieve lasting financial wellbeing. As Founder and CEO of Xaris Financial Enterprises, it is her passion and life goal to help others develop and maintain financial wellness.

More about me

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