Best Working Capital Loans

What are the best-working capital loans to apply for? In this article, we will outline some of the best-working capital loans to consider for your business. In the meantime, working capital loans are loans taken by business owners to finance their day-to-day operations. These loans are suitable for seasonal businesses and those that need an occasional cash infusion to run their business. However, most lenders keep lending criteria loose for this purpose, and they offer loans with low credit scores and revenue requirements.

Best Working Capital Loans

Working capital loans for small businesses are offered by both online lenders and banks. Also, term loans, business lines of credit, and government-backed SBA 7(a) loans can be used for a working capital loan. The best part is that this loan is available to a wide variety of businesses, and the loans are usually funded quickly.

What is a Working Capital Loan?

A working capital loan is a short-term financing loan that is used to cover day-to-day business expenses. The loan can be used to cover expenses like utilities, payroll, inventory purchases, or rent. These loans can come in different forms, for instance, lines of credit, SBA loans, and term loans. This loan is suitable for short-term needs like cash flow gaps. They cannot be used for investments like large equipment or real estate.

How Does It Work?

It’s simple. A working capital business loan offers short repayment terms, like six to 36 months. Not only do they offer short repayment terms, but they also offer fast loan approvals. The funding will be within one to three days due to the nature of the loan. To qualify for this loan, you may be required to have a year of business experience and a personal FICO score of 500 to 600.

Who Should Get a Working Capital Loan?

A working capital loan is suitable for businesses with a temporary shortage of funds. For instance, a seasonal or economic downturn or unpaid invoices could lead to gaps in cash flow. Also, business owners might need extra capital after an unexpected expense like replacing equipment or repairing it.

Types of Working Capital Business Loans

There are various types of business loans your business can adopt to increase its working capital, and they include:

Invoice Factoring

Your business sells its outstanding invoices to a factoring company through invoice factoring. This is how it works: the factoring company will pay 70% to 90% of the total invoice amount. It will then collect the outstanding invoices. The factoring company will take out the fees and pay your business the remaining fees.

Terms Loans

Term loans provide an upfront lump-sum payment. Then your business repays the loans in equal installments over a fixed period. The interest rates are either variable or fixed, and they are applied to the principal amount borrowed before each repayment.

Invoice Financing

For invoice financing, the lender advances a percentage of the unpaid invoices to the business. Then the business collects payments from its clients and pays back the loan. This improves working capital by giving businesses access to their accounts receivable funds before clients make payments. However, the lender should be more concerned with the invoiced client’s payment history and creditworthiness.

Lines of Credit

A line of credit lets business owners borrow funds as needs arise. However, the funds can be borrowed for up to a set limit, and the credit limit can range from $1,000 to $250,000. Once you withdraw the funds, your business repays the loan over a fixed period, like 6, 12, or 18 months. But the amount of money available to be used renews as you repay the borrowed amount.

Where To Get a Working Capital Loan

Working loans can be gotten from nearly every lender, and they offer loans that can boost your working capital. Not all lenders provide working capital loans, but the best places to get this type of loan include.

SBA Lenders

SBA loans can also be used as working capital loans, and they are backed up by the U.S. Small Business Administration. This loan can be used as a 7(a), Express, or Microloan. Also, lenders are mandated to keep interest rates below the SBA’s maximum rate.

Online Lenders

Another place you can get working capital loans is from online lenders. Online lenders are preferable for businesses with fair-to-bad credit and for those who need fast funding. They have the minimum FICO credit score that they require from borrowers, and it ranges from 500 to 650. It might interest you to know that most of these online lenders fund within 24 to 72 hours.

Community Development Financial Institutions (CDFIs)

Businesses that don’t have access to traditional funding can opt for a loan from a Community Development Financial Institution. However, CDFIs can be non-profit organizations, credit unions, or banks. The essence of CDFIs is to provide education and lend to specific communities to support their small businesses.


Banks are another place where you can get working business loans. They offer different business loans that will help you settle operational expenses. Note that banks tend to have tight lending requirements. For instance, they usually require two years in business and a personal credit score of 670 or higher.

Best Working Capital Loans

Working capital business loan providers have a combination of low rates, fast funding speeds, and easy documentation requirements. The lists of the best capital loan providers below have varying qualification requirements and loan types like credit lines, invoice financing, and term loans.

National Funding

National Funding is suitable for customer service and custom financing options. Their goal is to deliver a high level of personalized customer service and to ensure that their customers get the best service. However, the majority of national funding loans are retained in-house, and applications are reviewed on a case-by-case basis to maximize approval odds.

National funding is suitable for you if your business has strong finances and credit. It also focuses more on short-term loans, as its longest repayment term is 16 months. National funding works with striving businesses with low credit scores. However, its minimum requirements are in the range of a 600 credit score and six months’ time in business.


Blue is categorized as one of the best-working capital loans because it has fast funding speeds and fast application speeds. It also offers a line of credit products with one of the lowest rates. With its small business line of credit, you can get rates as low as 6.2%. To qualify for a Bluevine working loan, you must have a business bank account. If you are approved for a loan, you must make payments on a weekly or monthly basis. You will need to meet certain criteria to qualify for a monthly repayment plan.

SBG Funding

You should consider SBG funding if you are looking for customized loan terms tailored to your specific business needs and situation. SBG has a high approval rate of 85%, and its minimum qualification requirements include six months in business, annual revenue of $250,000, and a credit score of 500. SBG funding includes invoice financing, term loans, and a line of credit. However, to apply for this loan, you have to complete a loan application online. Applying online will not affect your credit score negatively, so you do not need to be afraid.

Clarify Capital

Coming fourth on our list is Clarify Capital. It is another business loan broker that has a large network of over 75 lenders with different loan types. Clarify Capital will pair you with a loan specialist, who will in turn match you with a loan suited to your needs. Their website is always available if you need to submit an application or learn more about the loan. Clarify Capital provides a high level of service to customers, and it also issues fast funding.


With Creditfy, borrowers can get a line of credit for as much as $2.5 million, which is the highest loan amount for a credit line. Also, Creditfy has competitive rates and easy qualification requirements, along with fast funding speeds. Just like the other mentioned brokers, Creditfy will ensure the work of its loan specialists, who will help you find the best lender. Their rate starts at as low as 6.49%, and it requires a minimum credit score of 600, annual revenue of $100,000, and six months in business.

American Express

American Express has the lowest revenue requirement of $36,000, unlike other loan brokers. If you are a new company or are unable to meet the higher revenue requirements of other providers, then you should opt for American Express.

However, the minimum credit score for this broker is 660. It can go higher, but it depends on the relationship you have with the lender. With your credit history and other application requirements, you can complete the online application in a few minutes.