American Express offers three business lending products that could be affordable for certain business owners. To qualify for one of these loans, you must have at least one American Express business card and, for some American Express business loans, you must also accept American Express cards at your place of business.
American Express offers business loans, working capital loans and merchant financing. Amex offers smaller loan minimums than its competition, making it ideal for business owners who need to finance relatively small expenses or consolidate smaller amounts of debt.
The lender’s working capital term loan and merchant financing loans are best for business owners experiencing unexpected expenses or going through a seasonal or temporary revenue shortage. If you qualify for the lowest rates, these American Express small business loans can be cheaper than putting your expenses on a credit card.
|American Express Business Loans: At a Glance|
|Working Capital||$500–$150,000 (may be eligible for higher sums)||30-, 60- and 90-day terms||0.60%-1.75%, 1.20%-3.50% or 1.80%-5.25% (dependent on term, see below)||One payment at the end of your loan term.|
|Business Loans||$3,500–$75,000||6-, 12-, 24- and 36-month terms||6.98%–19.79% APR||Monthly payments|
|Merchant Financing||$5,000–$2,000,000||6-, 12- and 24-month terms||1.75%-7.00%, 3.50-14.00% or 7.00-28.00% (dependent on term, see below)||Daily payments. Repaying early may qualify you for a 10%-25% fee rate reduction.|
American Express working capital is used for vendor payments only. You request that a vendor be paid a specific amount on your behalf, and promise to repay via auto debit from your bank account at the end of your loan term.
It can take anywhere between one to five business days for your vendor request to be verified, and you can only make payments to domestic vendors who are not your affiliates. From there, it typically takes about two business days for your vendor to receive payment. There are no origination fees, but there is a late fee of 1.99% of your unpaid balance.
Here’s a closer look at the cost of taking out an American Express working capital loan. The rate you qualify for is listed in your online dashboard.
|Working Capital Rates|
|Term||30 days||60 days||90 days|
American Express business loans are fixed-rate term loans with no prepayment penalties. There are no application or origination fees, but there is a $39 fee for a late payment or if you have insufficient funds.
The loan minimum is typically $3,500. However, if you’re using your loan to consolidate business credit card debt, it’s required that you request a $1,000 minimum for each card. As an example, you would need to borrow at least $4,000 if you’re paying off four separate credit cards (four is the maximum number of cards this loan can pay off). However, you cannot use an American Express business loan to pay off American Express credit cards.
If you’ve been in business for at least two years and your business accepts American Express cards, you may qualify for merchant financing. When you’re approved, funds will be deposited into the business bank account you use for credit and debit card transactions.
Most loans for less than $35,000 are funded within two days. Loan amounts between $35,000 and $250,000 usually take three days, while loan amounts between $250,000 and $750,000 typically take five days. Loans larger than $750,000 may take up to 10 days to fund.
There are two choices for repayment: You can have fixed payments pulled daily from your business bank account, or varying daily payment amounts based on a set percentage of your American Express receivables. There are no application or origination fees, but you will have to pay a late fee of 2.99% of your past due amount or $39 — whichever is greater.
|Merchant Financing Rates|
|Term||6 months||12 months||24 months|
If you have a good credit history and can reasonably project cash flow, you’ll likely be in a position to take advantage of all the positive aspects of American Express small business loans. If you have a tumultuous credit history, or if you don’t have the revenue required to pay off the loan, this might not be the best funding option for you.
| If you qualify for the lowest interest rate, APRs on term loans are competitive.
Rate reduction available for those who pay off merchant financing loans early.
No application or origination fees.
| You must be an American Express business card customer to qualify.
If you don’t qualify for the best rates, APR on term loans could be expensive.
Working capital loan can only be used for vendor payments.
Qualifications and required collateral vary from loan to loan at American Express.
To qualify for an American Express working capital loan, you have to be an American Express business card customer for at least six months. The six-month requirement is waived for members, but those with Corporate Centurion, Business Centurion or Centurion cards are not eligible even if they have six months of history.
There is no collateral required for this loan.
In order to qualify for a business loan, you must have an American Express business card. Your account must be at least one year old at the time of application, and all accounts must be in good standing. You must also be a U.S. citizen at least 18 years of age. Residents of the U.S. or one of its territories also qualify.
These loans are unsecured, which means you won’t have to put up any collateral.
In order to qualify for American Express merchant financing, you must have at least $12,000 per year in credit and debit receivables. You must also accept American Express cards, and if you’re seeking a 24-month term, you must have accepted them for at least 24 months.
Merchant financing is a secured form of borrowing, which means you must put business assets up as collateral. However, for merchant financing purposes, American Express does not consider motor vehicles and real property as allowable collateral.
The application process varies depending on the type of American Express business loan you need.
To apply for working capital, log in to your American Express account. From there, you’ll be prompted to enroll in the working capital program, confirming the business data American Express already has on file for you.
Once you’re approved, your dashboard will tell you how much you’re eligible to borrow and the fee you currently qualify for — note that this fee is subject to change.
You can request up to your maximum approved borrowing amount at any given moment. The amount of individual funding requests for vendor payment is not limited as long as you don’t go over that predetermined, cumulative limit.
You can apply for an American Express business loan online or over the phone. You’ll need to provide:
If you’re applying to consolidate business credit card debt, you’ll also need to provide the credit card account numbers, along with the amount you’d like American Express to pay on each account.
If you’re applying for other reasons, your funding will be deposited directly into your business bank account. You must provide your bank account information to American Express within three days of loan approval in order to secure funding.
Because of the pandemic, American Express is not currently accepting new applications for merchant financing. Normally, you’re able to apply online or over the phone.
According to American Express, you’d be asked for the following information when you apply:
Some applicants may be asked for additional documentation, depending on the financing amount and terms.
You cannot have more than one merchant financing loan at a time. You can apply for additional funds when you’ve paid off at least 50% of the loan, though Amex won’t fund the second loan until you pay off the first one.
In most circumstances, a business loan will be dramatically less expensive than using a credit card. However, if you put an expense on a credit card and pay it off as soon as your statement is due, you can avoid any fees or interest charges.
|Amex Working Capital Loan vs. Business Credit Card|
|Loan Amount||Payoff Schedule||Rate*||Total paid in interest/lending fees|
|American Express working capital loan||$50,000||60 days||1.20%||$600|
|$50,000||60 days||APR||$892 if you make two monthly payments of $25,446 each.|
|Card with 0% introductory APR||$50,000||Up to 12 months||0.00% APR||$0|
*Assuming borrower qualifies for the lowest possible rate.
The APR offered on the is , which may or may not be more expensive than an American Express working capital term loan, depending on your fee rate.
Some credit cards have introductory periods where you can secure 0% APR as long as you make required minimum payments every month. If you think you can pay off the debt before the introductory APR expires, you may be able to avoid interest payments altogether.
Competitors like Chase Bank and Capital One don’t have comparable products to the American Express working capital and merchant financing loans — instead, they offer lines of credit. However, they do have products similar to Amex’s business loan.
The only comparable product offered by both American Express and Chase are term business loans. You can secure a smaller loan from American Express with a minimum loan amount of $3,500 compared to Chase’s minimum of $5,000. You can get longer terms with Chase, though, stretching your payments out over 84 months versus Amex’s 36-month maximum.
Capital One’s business loans start at $10,000, while American Express loans start at $3,500. However, term lengths can be up to five years, which is longer than the maximum term of 36 months with Amex. Still, interest rates across both loans are somewhat similar, with Capital One offering APRs of 6.90% to 16.90%.