Best Working Capital Loans in March 2024

Find the best working capital loan to help you finance ongoing business expenses

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.
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By Jill A. Chafin | Edited by Abigail Bassett and Janet Schaaf | February 27, 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.
LenderUser ratingsBest forMax. loan amountTerm lengthMin. Interest rateMin. credit scoreMin. time in business
(692)
User Ratings & Reviews rating-reviews-tooltip-icon

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%*

625One year

Get business loan offers
User ratings not availableSBA working capital loans$5,000,000120 months
Prime rate + 3.00% to 6.50%, depending on loan size and term length

680 recommended
Two to three years recommendedGet business loan offers
(27)
User Ratings & Reviews rating-reviews-tooltip-icon

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

500Six months

Get business loan offers
Fundbox logo
(30)
User Ratings & Reviews rating-reviews-tooltip-icon

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
600Six months recommended

Get business loan offers
User ratings coming soonLine of credit$250,0006 or 12 months

6.20% simple interest

625Two years

Get business loan offers
(0)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Long-term loans$500,0006 to 84 months11.29%
660
Two years

Get business loan offers
User ratings coming soon

Minority entrepreneurs$250,00012, 24, 36 or 60 months

8.49%
Not disclosed

12 monthsGet 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 rate35.40%*
Term lengthUp to 24 months
Minimum credit score625
Minimum time in businessOne year
Minimum annual revenue$100,000
ProsCons

 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.

SBA CAPLines: Best for SBA working capital loans

Loan amountsUp to $5,000,000
Starting interest ratePrime rate + 3.00% to 6.50%, depending on loan size and term length
Term length120 months
Minimum credit score680 or higher recommended
Minimum time in businessTwo to three years recommended
Minimum annual revenue$100,000 recommended
ProsCons

 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

Fora Financial: Best for bad credit

Loan amounts$5,000 to $1,500,000
Starting interest rateFactor rates from 1.10 to 1.40
Term lengthUp to 15 months
Minimum credit score500
Minimum time in businessSix months
Minimum annual revenue$180,000
ProsCons

 Opportunity to borrow more after paying 60% of original loan

 Early payment discounts offered

 High origination fees

 Daily or weekly payments required

Fundbox logo

Fundbox: Best for startups

Loan amountsUp to $150,000
Starting interest rate4.66% for 12 weeks
8.99% for 24 weeks
Term length12 or 24 weeks
Minimum credit score600
Minimum time in businessSix months recommended
Minimum annual revenue$100,000
ProsCons

 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

Bluevine: Best for lines of credit

Loan amounts$6,000 to $250,000
Starting interest rate6.20% simple interest
Term length6 or 12 months
Minimum credit score625
Minimum time in businessTwo years
Minimum annual revenue $480,000
ProsCons

 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

Funding Circle: Best for long-term loans

Loan amounts$25,000 to $500,000
Starting interest rate11.29%
Term length6 to 84 months
Minimum credit score660
Minimum time in businessTwo years
Minimum annual revenue$500,000 for SBA 7(a) loan; amount not disclosed for other financing types
ProsCons

 Quick funding times

 Longer repayment terms

 Daily or weekly payments required

 Collateral and a personal guarantee from the main business owner(s) are required

Accion Opportunity Fund: Best starter loans for minority entrepreneurs

Loan amounts$5,000 to $250,000
Starting interest rate8.49%
Term length12, 24, 36 or 60 months
Minimum credit scoreNot disclosed
Minimum time in business12 months
Minimum annual revenue$50,000
ProsCons

 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

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.

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.

Pros and cons of working capital loans

ProsCons
 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.

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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.