Business Loans
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Business Cash Flow Loans: How it Works and Best Options

Updated on:
Content was accurate at the time of publication.

Business cash flow loans can help businesses cover all kinds of expenses, from buying inventory to fulfilling payroll. Whether needed for outstanding invoices or a temporary dip in revenue, this type of short-term funding can help plug the gap when a lack of capital would disrupt regular business operations. We’ll learn more about how this works below.

Below are our picks for the best business cash flow loans:

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.
LenderUser ratingBest forMaximum amountMinimum credit scoreTime to funding
User ratings coming soonLines of credit$250,0006251 to 3 business daysGet business loan offers
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Term loans$250,000625Up to 3 business daysGet business loan offers
User ratings coming soonLow-revenue businesses$250,0006601 to 3 business daysGet business loan offers
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Startups$1,500,00050024 to 72 hoursGet business loan offers
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Bad credit$1,000,00050024 hoursGet business loan offers

Learn more about how we chose our picks.

Bluevine: Best for lines of credit

Term length6 or 12 months
Max. loan amount$250,000
Starting interestSimple interest rates starting at 6.20% for a 26-week repayment term
Min. credit score625
Min. time in business24 months

Read our review

See Your Business Loan Offers

OnDeck: Best for term loans

Term lengthUp to 24 months
Max. loan amount$250,000
Starting interest35.40% APR
Min. credit score625
Min. time in business1 year

Read our review

See Your Business Loan Offers

American Express Business Line of Credit: Best for low-revenue businesses

Term length6, 12 or 24 months
Max. loan amount$250,000
Starting interestLoan fees are as follows:
  • 3% to 9% for 6-month loans
  • 6% to 18% for 12-month loans
  • 9% to 27% for 18-month loans
Min. credit score660
Min. time in business12 months

Read our review

See Your Business Loan Offers

Fora Financial: Best for startups

Term lengthUp to 15 months
Max. loan amount$1,500,000
Starting interestFactor rates from 1.10 to 1.40
Min. credit score500
Min. time in business6 months

Read our review

See Your Business Loan Offers

Uplyft Capital logo

Uplyft Capital: Best for bad credit

Term lengthUp to 12 months
Max. loan amount$1,000,000
Starting interest10.00%
Min. credit score500
Min. time in business6 months

Read our review

See Your Business Loan Offers

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Cash flow loans for business provide access to working capital. They can be a quick source of cash to help businesses cover all kinds of short-term financial needs. That can include expenses such as:

  • Meeting payroll obligations
  • Getting through seasonal lulls in revenue
  • Purchasing discounted inventory
  • Buying essential machinery or equipment
  • Covering everyday operating expenses

These types of small business loans are ideal for businesses that don’t have the cash on hand to pay for upcoming expenses. That may be due to outstanding invoices that have yet to be paid or some other temporary revenue clog. In any case, business cash flow loans are meant to help businesses bridge the gap.

Lenders that provide business cash flow loans typically look at revenue to assess the business’ ability to repay the loan. Every lender’s small business loan requirements are different, so minimum revenue requirements vary. The borrower’s personal credit score will likely come into play as well.

Cash flow loans for business are designed to meet short-term financial needs, especially for businesses that are experiencing temporary interruptions in revenue. That may be the result of seasonal slowdowns, having money tied up in outstanding invoices or anything else that prevents expected revenue from coming in.

If a cash flow loan sounds right for your business, the next step is finding a lender and applying.

1. Determine your funding needs

Begin by evaluating why you need funding in the first place. Is it due to something you expect to pass relatively quickly, like a slow sales season? The idea is to determine if this is a short-term financial hiccup or a larger, long-term cash flow problem. If you do decide to move forward with a cash flow loan, determine how much funding you need.

2. Evaluate your borrowing eligibility

Once you’re clear on how much capital your business needs, look at whether or not you meet the general requirements for a cash flow loan. Eligibility requirements vary from lender to lender, but you’ll likely need to demonstrate steady monthly revenue. Time in business requirements and minimum credit scores also vary. With that said, business owners who have strong credit and have been operating for a while may have an advantage.

3. Compare lenders

The next step is to see which lenders can meet your needs — and then compare their business cash flow loans. Here are some things to consider:

  • Interest rates
  • Loan fees (e.g., origination fees, prepayment penalties, late payment fees)
  • Repayment terms
  • Monthly payments
  • Funding times
  • Credit score requirements
  • Time in business requirements
  • Minimum monthly revenue requirements

4. Apply

You can move forward with whichever lender best suits your needs. You can expect them to take a close look at your business revenue and expected performance. To that end, they may request bank statements, proof of receivables or other documentation.

Business cash flow loans come in all shapes and sizes, such as:

Term loans

Short-term business loans, which are largely provided by online lenders, can help business owners get through all sorts of cash flow issues — from weathering an emergency business expense to managing regular operational costs. Repayment periods typically last anywhere from three to 24 months, with payments made daily or weekly. Once approved, businesses can expect funding within a few days.

Lines of credit

Business lines of credit work a little differently than loans. Instead of receiving a lump sum of cash upfront, a credit line allows the business to withdraw funds on an as-needed basis. Businesses can use those funds for all kinds of expenses, including those related to short-term cash flow issues. The business owner can borrow up to their credit limit, and will only owe interest on the amount owed.

Invoice factoring

If your business has cash-flow issues because of unpaid invoices, invoice factoring could be a good way to access capital. Invoice factoring involves selling a batch of outstanding invoices to a factoring company in exchange for a cash advance. This amount is generally equal to 70% to 90% of the value of the invoices. Just keep in mind that your customers will be notified of the arrangement, which might suggest that your business is having money problems. Similarly, some customers may not be keen on making payments to a third party.

Merchant cash advance

A merchant cash advance enables a business to borrow against its future debit or credit card sales. The lender receives a percentage of those daily or weekly transactions in exchange for a lump sum of cash. They’ll continue taking their cut until the cash advance is repaid. That usually translates to 10% to 20% of daily credit card sales. This fee can be taken directly from sales or withdrawn from the business’s bank account. Additional rates and fees may apply.

Business bridge loans

Commercial bridge loans are a form of short-term funding commonly used to close on commercial real estate transactions, but also can be used to buy inventory or complete a business acquisition. Repayment terms are usually short, and interest rates may be higher when compared to other business loans. This type of cash flow loan typically requires collateral, usually in the form of real estate.

Here’s a quick overview of the pros and cons of cash flow loans:

ProsCons

  Quick funding

  Available to relatively new businesses

  Borrowers with poor credit aren’t excluded

  Typically requires a steady stream of monthly revenue

  Interest rates and fee structures can vary from lender to lender

  If the business doesn’t get to the source of its cash flow problems, these loans could create a repeating debt cycle

Business cash flow loans are a great option for short-term needs, but if you’re looking for more long-term funding to help your business scale or expand, consider these options:

SBA loans

Guaranteed by the U.S. Small Business Administration, SBA loans are known for their low interest rates and generous repayment terms. However, the eligibility requirements and application process are both more rigorous when compared to term loans from online lenders. It isn’t uncommon for it to take two months or longer. As such, SBA loans aren’t ideal for short-term capital needs. Established businesses with long-term needs are generally better suited.

Long-term loans

As the name implies, long-term business loans have long repayment terms; usually to the tune of 10 years or more. They also tend to offer higher loan amounts. That makes them especially appealing to small businesses that are looking to grow and expand. Eligibility requirements are typically more rigorous when compared to short-term cash flow loans.

Equipment loans

These loans are designed to help businesses purchase, replace or upgrade vital equipment. That can include everything from vehicles to technology to commercial-grade office equipment and more. The equipment that’s being financed serves as collateral, though some lenders may require a down payment. Repayment terms are fixed and generally last about five years. Every lender is different, but interest rates can be upwards of 28%. Equipment loans can make sense for businesses that need to purchase essential machinery.

Commercial real estate loans

Businesses that are looking to purchase land or a physical storefront might consider a commercial real estate loan. They can be used to finance new property, which includes new construction, or renovate existing property. It’s a commercial mortgage that’s ideal for creditworthy businesses that want a long repayment term. Traditional commercial real estate loans usually have interest rates that can start at 5% to 7%.

How we chose our picks

In order to appear on our list of best cash flow loans, lenders had to meet the following criteria:

  • Minimum credit score of 640 or below
  • Loan amounts of $150,000 or greater
  • Funding timelines in 3 business days or less
  • Transparent starting interest rates