Find the best working capital loan to help you finance ongoing business expenses
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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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By Jill A. Chafin | Edited by Abigail Bassett and Janet Schaaf | March 28, 2024
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
| Lender | User ratings | Best for | Max. loan amount | Term length | Min. Interest rate | Min. credit score | Min. time in business | |
|---|---|---|---|---|---|---|---|---|
(692) User Ratings & Reviews Ratings and reviews are from real consumers who have used the lending partner’s services. | Fast funding | $250,000 | Up to 24 months | 35.40%* | 625 | One year | Get business loan offers | |
| User ratings not available | SBA working capital loans | $5,000,000 | 120 months | Prime rate + 3.00% to 6.50%, depending on loan size and term length | 680 recommended | Two to three years recommended | Get business loan offers | |
(27) User Ratings & Reviews Ratings and reviews are from real consumers who have used the lending partner’s services. | Bad credit | $1,500,000 | Up to 15 months | Factor rates from 1.10 to 1.40 | 500 | Six months | Get business loan offers | |
(30) User Ratings & Reviews Ratings and reviews are from real consumers who have used the lending partner’s services. | Startups | $150,000 | 12 or 24 weeks | 4.66% for 12 weeks 8.99% for 24 weeks | 600 | Six months recommended | Get business loan offers | |
| User ratings coming soon | Line of credit | $250,000 | 6 or 12 months | 6.20% simple interest | 625 | Two years | Get business loan offers | |
(0) User Ratings & Reviews Ratings and reviews are from real consumers who have used the lending partner’s services. | Long-term loans | $500,000 | 6 to 84 months | 11.29% | 660 | Two years | Get business loan offers | |
| User ratings coming soon | Minority entrepreneurs | $250,000 | 12, 24, 36 or 60 months | 8.49% | Not disclosed | 12 months | Get business loan offers |
Learn more about how we chose our picks.
OnDeck: Best for fast funding
| Loan amounts | $5,000 to $250,000 |
| Starting interest rate | 35.40%* |
| Term length | Up to 24 months |
| Minimum credit score | 625 |
| Minimum time in business | One year |
| Minimum annual revenue | $100,000 |
| Pros | Cons |
|---|---|
Receive funds as soon as the same day Have the option to avoid prepayment penalties | Not available in North Dakota High interest rates |
*This rate reflects the estimated starting APR offered to at least 5% of OnDeck customers. It doesn’t reflect the minimum APR offered by the company.
If you’re looking for a fast business loan, OnDeck can deliver funds up to $250,000 as soon as the same business day (criteria applies). You can check your eligibility without a hard credit check with a streamlined application that takes only a few minutes to complete.
OnDeck has a fairly low credit score and time in business requirement, but be prepared for high interest rates and additional fees.
Read our OnDeck review.
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SBA CAPLines: Best for SBA working capital loans
| Loan amounts | Up to $5,000,000 |
| Starting interest rate | Prime rate + 3.00% to 6.50%, depending on loan size and term length |
| Term length | 120 months |
| Minimum credit score | 680 or higher recommended |
| Minimum time in business | Two to three years recommended |
| Minimum annual revenue | $100,000 recommended |
| Pros | Cons |
|---|---|
No down payment required Choose between different types of SBA CAPLines | SBA loan applications can be lengthy and time-consuming May come with extra fees |
The SBA CAPLine is a specific type of SBA 7(a) loan, but instead of paying out the loan in a lump sum like a traditional 7(a) term loan, it’s a line of credit you can draw upon to use for working capital expenses.
SBA loans are backed by the Small Business Administration, making them more accessible for newly established businesses, minority business owners or those who can’t qualify for traditional business financing. You must operate a for-profit business within the U.S. and be in good standing with other government business loans to qualify for an SBA small business loan or CAPLine.
Read more about SBA lines of credit.
Get Business Loan Offers
Fora Financial: Best for bad credit
| Loan amounts | $5,000 to $1,500,000 |
| Starting interest rate | Factor rates from 1.10 to 1.40 |
| Term length | Up to 15 months |
| Minimum credit score | 500 |
| Minimum time in business | Six months |
| Minimum annual revenue | $180,000 |
| Pros | Cons |
|---|---|
Opportunity to borrow more after paying 60% of original loan Early payment discounts offered | High origination fees Daily or weekly payments required |
Fora Financial provides between $5,000 and $1,500,000 to be used for any business expense with no restrictions. With a minimum credit score requirement of only 500, it’s a great choice for borrowers looking for a bad credit business loan. However, your business must generate at least $15,000 in monthly revenue to qualify.
You can also enjoy fast funding with Fora Financial, receiving your funds within 24 to 48 hours. And while some lenders charge prepayment penalties, Fora Financial offers a discount for repaying your debt early.
Read our Fora Financial review.
Get Business Loan Offers
Fundbox: Best for startups
| Loan amounts | Up to $150,000 |
| Starting interest rate | 4.66% for 12 weeks 8.99% for 24 weeks |
| Term length | 12 or 24 weeks |
| Minimum credit score | 600 |
| Minimum time in business | Six months recommended |
| Minimum annual revenue | $100,000 |
| Pros | Cons |
|---|---|
Only three to six months in operation needed Receive funds as soon as the next day | Short terms with payments due weekly High annual revenue requirement |
If you’re looking for a working capital loan for startups, Fundbox’s line of credit can provide up to $150,000 on a revolving basis — only charging interest on the funds you withdraw. It’s a great option for new companies with a limited credit profile, although you must generate at least $100,000 in annual revenue to qualify.
If approved, you can access funds as soon as the next business day.
Read our Fundbox review.
Get Business Loan Offers
Bluevine: Best for lines of credit
| Loan amounts | $6,000 to $250,000 |
| Starting interest rate | 6.20% simple interest |
| Term length | 6 or 12 months |
| Minimum credit score | 625 |
| Minimum time in business | Two years |
| Minimum annual revenue | $480,000 |
| Pros | Cons |
|---|---|
Low minimum credit score requirement Line of credit replenishes with each repayment | High monthly revenue requirements Must be in business for at least two years to qualify |
A Bluevine line of credit can fund up to $250,000 of business expenses, allowing you to withdraw, repay, then withdraw again. Your application may be approved in as little as five minutes, with funds hitting your business bank account as soon as 24 hours later.
However, your business must have been in operation for at least two years and generate a minimum of $40,000 in monthly revenue to qualify.
Read our Bluevine review.
Get Business Loan Offers
Funding Circle: Best for long-term loans
| Loan amounts | $25,000 to $500,000 |
| Starting interest rate | 11.29% |
| Term length | 6 to 84 months |
| Minimum credit score | 660 |
| Minimum time in business | Two years |
| Minimum annual revenue | $500,000 for SBA 7(a) loan; amount not disclosed for other financing types |
| Pros | Cons |
|---|---|
Quick funding times Longer repayment terms | Daily or weekly payments required Collateral and a personal guarantee from the main business owner(s) are required |
Funding Circle is one of our top picks for a long-term business loan with funds up to $500,000, set monthly payments and terms as long as 84 months. With that time and money, you could tackle a range of ongoing projects for your business. Plus, you won’t get penalized for repaying your debt early.
Note that none of the business owners can have a history of personal bankruptcy within the past seven years. Furthermore, your business must operate within an approved industry to qualify for any Funding Circle small business loan.
Read our Funding Circle review.
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Accion Opportunity Fund: Best starter loans for minority entrepreneurs
| Loan amounts | $5,000 to $250,000 |
| Starting interest rate | 8.49% |
| Term length | 12, 24, 36 or 60 months |
| Minimum credit score | Not disclosed |
| Minimum time in business | 12 months |
| Minimum annual revenue | $50,000 |
| Pros | Cons |
|---|---|
Lends to a diverse range of small business owners Offers business coaching and mentorship Flexible repayment terms | Not available in all states Funding only available for U.S.-based companies Doesn’t list minimum credit score requirements |
The Accion Opportunity Fund (AOF) is a nonprofit lender focused on helping diverse business owners access the capital they need to start, grow and expand their companies. In addition to prioritizing minority entrepreneurs and women-owned businesses, the AOF provides educational resources, business coaching and access to support networks in English and Spanish.
You must have at least 20% ownership in your company and operate within the U.S. to be eligible for an AOF loan — although not all states are eligible for funding.
Get Business Loan Offers
What is a working capital loan?
A working capital loan is a catch-all term for short-term small business financing. With its flexible nature, working capital funding is an ideal fit for unexpected business expenses or extra cash to expand and grow your business.
The repayment plan and timeline will vary depending on your loan type. Some lenders may require daily or weekly payments from your credit card sales or direct payments from your business checking account.
On this page
- Types of working capital loans
- Pros and cons of working capital loans
- How to get a working capital loan
- How to compare working capital loans
- Alternatives to working capital loans
- How we chose the best working capital loans
- Frequently asked questions
Types of working capital loans
Working capital loans for small businesses can cover operating expenses like payroll, daily costs, inventory and more. Here are the most common types of business financing to consider for your working capital needs.
Short-term business loans: Term loans provide a lump sum of cash upfront for working capital purposes. Maximum amounts typically range from $250,000 to $1.5 million or higher, with repayment terms typically lasting three to 24 months.
Business lines of credit: If you need frequent cash infusions, a working capital line of credit lets you borrow as little or as much as you need, up to your credit limit. You only pay interest on the amount you withdraw.
Merchant cash advances: Though technically not a loan, a merchant cash advance (MCA) is an alternative form of business financing that offers a lump sum in exchange for a percentage of your business’s future earnings (commonly, your credit card sales). You can repay with a portion of daily or weekly credit card sales. However, the factor rate can make this a more expensive option.
SBA loans: The Small Business Administration offers working capital loans through its CAPLines program — an umbrella term for a type of 7(a) loan that functions as a line of credit. They can offer good terms and loan amounts to help you fund your various business needs.
Get Business Loan Offers
Pros and cons of working capital loans
| Pros | Cons |
|---|---|
| Flexible funding for a wide range of business purposes Quick funding from some online lenders Accessible to a wide range of businesses with varied minimum requirements | Interest rates can be high due to factor rates Some lenders require daily or weekly payments Collateral may be required |
How to get a working capital loan
The process for applying for working capital financing varies by loan type and lender. However, here are the steps you will likely need to take to get a small business loan:
1. Decide how much you need. Write a list of your company’s most urgent needs and estimated operating costs. Consider whether you need the funds upfront or prefer ongoing access to cash on an as-needed basis. Use our business loan calculator to estimate your borrowing power, making sure the weekly or monthly payments are within your budget.
2. Determine your eligibility. Lenders will typically list their business loan requirements on their website. Factors that determine your creditworthiness usually include your credit profile (your personal FICO Score and business credit score), time in business and annual revenue. Some working capital loans also require a personal guarantee or collateral, such as with secured business loans.
3. Compare small business lenders. You can apply for a working capital loan with a traditional bank, credit union or an online business lender. Compare interest rates, repayment terms and additional fees to find the best loan option for your business needs.
4. Gather required documents. Having essential documents ready can help speed up the application process. You will likely need a business plan, personal and business bank statements, personal and business tax returns and any applicable business licenses.
5. Submit your application. The application process is typically quick and automated, often done online. Your lender may reach out to you for additional information and next steps.
How to compare working capital loans
If you receive multiple working capital loan offers, consider the following factors when picking the loan that best fits your needs:
Interest rate: Working capital loan rates can vary depending on the loan type and lender. Factor rates are also frequently involved, which can make your interest payments higher.
Additional fees: Some working capital lenders add origination and late fees, as well as prepayment penalties. These additional fees can significantly increase the loan’s overall cost.
Repayment term: Your repayments may start immediately and have very short terms. To reduce the risk of default, make sure you can afford to repay the debt by the scheduled date(s).
Loan amounts: While you want the approved amount to cover your necessary expenses, it’s important to avoid borrowing more than you need, as that can be unnecessarily expensive.
Time to fund: How soon you need funds can determine which working capital business loan is best for you. For urgent needs, consider fast working capital loans or same-day business loans. If you can wait, you’ll likely get better rates and terms with an SBA or traditional bank loan.
Lender support: Some lenders offer free business support and coaching as part of the loan process.
Our in-depth catalog of small business lender reviews is a great way to compare business loan options before signing on the dotted line.
Alternatives to working capital loans
While working capital loans can be a great way to cover a range of everyday business expenses, they might not be the best fit for every company. Here are some other ways to get the capital you need to keep your business afloat.
Business credit cards
Business credit cards can cover low-cost expenses while helping you rack up some generous rewards. Qualifications are usually more lenient than traditional small business financing, but watch out — credit card interest rates can go quite high. Because of this, it’s best to use business cards sparingly, making sure to pay off the balance each month.
Business grants
Typically offered by the federal, state and local governments, small business grants can help you access free money for your company. Some private corporations also offer grants or business sponsorships. While these opportunities can be competitive, it can still be worth the time and effort to apply.
Crowdsourcing
Crowdfunding platforms, like GoFundMe for business, can help you raise donations via friends, family and the general public. It’s free to launch a campaign, although the crowdfunding platform typically takes a small cut for their service. Businesses with a strong online presence that can provide a discounted product or service tend to have better success rates with crowdfunding campaigns.
How we chose the best working capital loans
We reviewed more than 15 lenders to determine the overall best seven working capital loans. To make our list, lenders must meet the following criteria:
- Minimum time in business: Options available for businesses that have been operating for six to 24 months.
- Minimum credit score: Personal credit score requirements of 680 or below.
- Loan amounts: Funding amounts ranging from $5,000 to $5 million, with minimal restrictions on loan uses or purposes.
- Rates and terms: We prioritize lenders with competitive fixed rates, fewer fees and flexible repayment terms of at least three months.
- Repayment experience: We consider each lender’s overall reputation and business practices when making our list. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide unique perks to customers, like free business coaching, early payoff discounts and loyalty rewards.
Frequently asked questions
Ultimately, deciding whether a working capital loan makes sense for your business is a matter of personal choice. However, if you need short-term funding to cover unexpected expenses or to help your operations expand, this type of loan may be a smart option.
The rates on working capital loans can vary widely from lender. However, it’s possible to get a decent rate, especially if you have a strong financial profile. For example, Fundbox’s rates start at just 4.66% for its 12-week term.
Generally, when people talk about working capital loans, they’re referring to a short-term business loan. However, in some cases, it’s also possible to take out a line of credit to cover your working capital expenses.
