Best working capital business loans in April 2024

Written by
Sarah George
Edited by
Robert Thorpe
Apr 26, 2024
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Working capital loans are designed to provide a small amount of funding to cover operational costs, particularly when there’s a shortage in cash flow. Many lenders keep lending criteria loose for this purpose, offering loans with low credit score and revenue requirements. While it’s possible to find working capital loans specifically, businesses can cover this need with many types of business loans, including term loans or business lines of credit. 

Check our best picks for working capital loans. These top lenders offer relaxed requirements, fast funding and a wide range of loan amounts you’d need to cover most operational expenses.

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Best for startups

4.5

Bankrate Review
Loan amount
$5k- $1.4M
Term: 6 - 16 months
Interest rate
Starting at 1.10 factor rate
Fastest funding
1 business day

Best for fast funding

4.6

Bankrate Review
Loan amount
$5k- $250K
Term: 18 - 24 months
Interest rate
Starting at 29.90% APR
Fastest funding
1 business day

Best for bridge loan

4.4

Bankrate Review
Loan amount
$25k- $5M
Term: 6 - 300 months
Interest rate
Starting at 7.99%
Fastest funding
1 business day
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on Bankrate

4.3

Bankrate Review
Loan amount
$2k- $250K
Interest rate
N/A
Fastest funding
Not disclosed

Best for unsecured working capital loans

4.4

Bankrate Review
Loan amount
$10k- $500K
Term: 4 - 18 months
Interest rate
Starting at 1.11 factor rate
Fastest funding
1 business day

Best for low interest

4.2

Bankrate Review
Loan amount
$5k- $250K
Term: 12 - 60 months
Interest rate
8.49- 24.99%
Fastest funding
Not disclosed

Best for business line of credit

4.2

Bankrate Review
Loan amount
$10k- $150K
Interest rate
Starting at 10.00%
Fastest funding
Not disclosed

Best for merchant cash advance

4.1

Bankrate Review
Loan amount
$5k- $5M
Term: 3 - 15 months
Interest rate
1.1 - 1.5 factor rate
Fastest funding
1 business day
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Compare the best working capital loans in April 2024

Before you sign on the dotted line for a working capital loan, take a deeper look at our top selections. You’ll want to compare potential lenders by looking at eligibility requirements, like loan amounts, minimum credit score requirements and minimum annual revenue.

LENDER BEST FOR LOAN AMOUNT MIN. FICO CREDIT SCORE MIN. ANNUAL REVENUE
Unsecured working capital loan $5,000 to $500,000 660 $250,000
Merchant cash advance $5,000 to $5 million 550 $100,000
Startups $5,000 to $1.4 million 500 $144,000
Fast funding $5,000 to $250,000 625 $100,000
Bridge loan $25,000 to $5 million 650 Not stated
Business line of credit $5,000 to $150,000 680 Not stated
Low interest $5,000 to $250,000 Not disclosed $50,000
Fair credit $2,000 to $250,000 Minimum FICO score of at least 660* at the time of application Average monthly revenue of at least $3,000

A closer look at our top working capital business loans

If one of the lenders in our table above seems like a good fit, you can learn more here. We’re taking a closer look at each option and highlighting the most important features of each lender. Our insights include each lender's loan offerings and what we like about them. 

National Funding: Best for unsecured working capital loans

Overview: Since 1999, National Funding has provided funding to over 75,000 small businesses with a focus on term and equipment loans. It’s known for its quick online applications, with approvals in as little as 24 hours. National Funding offers high loan amounts up to $500,000 with the flexibility to use the funds for any business expense. 

Who it’s for: National Funding works well for businesses with at least 6 months time in business and established businesses that don’t want to put up business assets as collateral. Borrowers with a personal credit score of 660 are eligible, and you’ll need an annual business revenue of at least $250,000.

Lendzi: Best for merchant cash advance

Overview: Lendzi is not a direct lender, instead partnering with lending institutions to connect businesses with an organization that can fund their financial needs. The company works with over 60 partners and has serviced over 500 million loans to date. Because Lendzi works with so many partners, a single application represents many chances for funding approval. 

Who it’s for: Business owners with a personal credit score above 550 and companies with at least two years in business are more likely to be approved. Lendzi merchant cash advances are a good fit for companies who can’t get approved for a traditional loan due to credit or annual revenue requirements. It’s best for companies who have built a reliable income stream, as Lendzi takes a percentage of future sales until the debt is repaid. 

Fora Financial: Best for startups

Overview: Founded in 2008, Fora Financial has helped thousands of small businesses secure short-term funding. It works with businesses that have less-than-perfect credit, providing access to term loans or revenue advances. Businesses can secure working capital loans for as little as $5,000 or up to $1.4 million. 

Who it’s for: Startups with at least three months in business and whose owners have a credit score of 500 can apply for a term loan. The revenue requirement for term loans is low too: $12,000 monthly average, $144,000 annually, for the past three months, according to a spokesperson. That said, the website states a $15,000 monthly average for the past six months, $180,000 annually. 

OnDeck: Best for fast funding

Overview: OnDeck is an online lender providing fast, short-term loans and business lines of credit to fair credit businesses. It has helped businesses secure over $15 billion in funding over the last 18 years, giving it a leg up on experience over new fintech lenders. With OnDeck, you get your loan decision within minutes of applying online. Many approved loans get funded within the same business day or within two to three business days. Loan amounts are from $5,000 to $250,000.

Who it’s for: OnDeck is a good fit for businesses with fair credit that need a low amount of funds quickly. Businesses need at least $100,000 in annual revenue. It’s not available in North Dakota, but residents of all other 49 states are eligible to apply. On the downside, it doesn’t have great interest rates, so it may be best for businesses who plan to pay off their loan quickly to build credit. 

SMB Compass: Best for bridge loan

Overview: SMB Compass is an online lender that’s funded millions of dollars in small business loans over the last 25 years. It provides an impressive selection of nine business loans with low starting rates to boot. SMB Compass offers bridge loans that go up to $5 million, a high loan amount compared to other lenders. It’s also transparent about interest rates. Interest rates vary, starting at 12.00 percent APR, which is competitive for a short-term loan.

Who it’s for: The SMB Compass bridge loan works best for business owners with a personal credit score of 650 and a debt-to-income ratio of less than 36 percent who need fast funding within 24 to 48 hours. The lender also offers other loans that can be used as working capital, including business lines of credit, which only require a minimum personal credit score of 600.

Wells Fargo: Best for business line of credit

Overview: Wells Fargo is a bank with a brick-and-mortar presence providing flexible business loan options for both small and established businesses. It offers low starting rates on three different business lines of credit and SBA loans. Wells Fargo offers flexible business lines of credit options, with varying credit limits and features to serve different purposes. 

Who it’s for: Both established businesses and startups may be interested in Wells Fargo as long as they have a top-notch personal credit score of 680. Its BusinessLine® line of credit is a general line for most small businesses offering up to $150,000, while the Small Business Advantage is SBA-backed and good for those with less than two years in business. The Prime line grants the lowest rates to businesses with at least $2 million in annual revenue.

Accion Opportunity Fund: Best for low interest

Overview: Accion Opportunity Fund is a nonprofit offering alternative lending for small businesses that can’t gain funding in the traditional market. The majority of its clients come from underserved communities, such as businesses in low-income areas. This alternative lender focuses on microloans with low interest rates starting at 8.49 percent. As a nonprofit, Accion Opportunity Fund can keep rates low since it doesn’t aim to turn a profit from its loans.

Who it’s for: Accion Opportunity Fund is a good option for small businesses needing funding for working capital at lower loan amounts with flexible terms. If your business has struggled to get financing elsewhere and wants support in other areas of your business, Accion is a great choice. 

American Express Business Blueprint™: Best for fair credit

Overview: American Express Business Blueprint™ provides a business line of credit that’s accessible to many small business owners because of its eligibility requirements. It offers a credit limit ranging from $2,000 to $250,000 if your business qualifies. The company considers businesses with a lower credit score than many competitors, who often require a FICO score of at least 680. 

Who it’s for: American Express Business Blueprint™ works well for businesses that are still building revenue and credit history. The business line of credit is available to businesses whose owners have a minimum FICO credit score of at least 660 at the time of application. In some cases, you may need a higher FICO score based on your relationship with American Express, credit history and other factors. You must have started your business at least a year ago and have an average monthly revenue of at least $3,000.

What are working capital loans and how do they work?

A working capital loan is designed to infuse cash into the business for everyday operations, such as marketing, inventory or payroll. These loans boost your business’s working capital, which is your current assets minus liabilities. The positive amount left over is the amount you can use for day-to-day purchases. 

Some lenders like Credibly and Triton Capital offer loans, specifically called working capital loans. But you can use other loans to boost your business’s working capital, including short-term loans and business lines of credit. 

How does a working capital business loan work?

Working capital loans tend to offer short repayment terms like six to 36 months. They may also offer fast loan approvals and funding within one to three days due to the nature of the loan. 

Depending on the type of loan, working capital loans may be easier to qualify for than standard term loans. They may require only a year in business and a personal FICO score of 500 to 600. 

Most working capital loans will have a set repayment schedule with fixed payments. If you open a business line of credit, your credit limit will reset as you pay off the loan, allowing you to borrow more funds as needed. 

Requirements for a working capital business loan

Every lender sets its own standards for granting working capital loans. In general, these loans have loose eligibility criteria since they’re meant for small, everyday purchases.

Requirements you can expect:

  • Annual revenue: Lenders require your business to make a specific amount monthly or annually to show steady cash flow. For working capital loans, these can range from $100,000 to $350,000. 
  • Time in business: Most lenders prefer businesses to show they have several years in the market. But working capital loans can range from three months to two years in business. 
  • Credit score: The minimum credit score is based on how much risk individual lenders are willing to take on. It’s typically set between 625 and 680 FICO, but some lenders go as low as 500. 
  • Industry: Lenders evaluate your business’s financial statements and risks for your industry. In some cases, the lender posts a list of industries it won’t work with, such as consulting or financial services. 
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Lenders often use your personal credit score to determine creditworthiness, though a business credit score may be weighed for more established businesses.

Types of working capital business loans

Your business can use various types of business loans to boost working capital. Depending on the specific use and your business qualifications, consider these options:

Pros and cons of working capital loans

Working capital loans work well if your business needs quick cash to cover everyday expenses and gaps in cash flow. But you might pay for the convenience. Make sure to consider the pros and cons of working capital loans before you apply for one.
 

Pros:

  • Get cash quickly. Many lenders will fund working capital loans within a few days, though it depends on the type of loan and how much you need. 
  • Typically use as needed. Unless you go with a term loan, your business can typically use the funds for any expenses. You may have to state the reason you need the funds for a term loan. 
  • Relaxed eligibility requirements. Businesses with bad credit can find loans to increase working capital, including alternative loan options tied to accounts receivable.

Cons:

  • Short, aggressive repayment terms. Most working capital loans require repayment within a few months, such as six or 18 months. 
  • Potentially high interest or fees. Some loans come with high interest rates, upwards of 75.00 percent, while others charge factor rates and additional fees like processing fees. Factor rates are known for converting to a high interest rate since they’re often used with risky types of loans. 
  • Low loan amounts. The loan amount that you qualify for may be lower than a standard business loan. This may be due to aggressive repayments or a risky credit profile.

Who should get a working capital loan? 

Businesses with a temporary shortage of cash may need a working capital loan. For example, a seasonal or economic downturn or unpaid invoices could lead to gaps in cash flow. Businesses may also need extra capital after an unexpected expense, such as repairing or replacing equipment. 

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As you’re exploring working capital business loans, watch out for these red flags:

  • Upfront fees. Avoid paying application or other fees before your loan is approved. 
  • Early repayment penalties. Some lenders charge early repayment fees, which can cut into your savings if you try to pay your loan off early. If there’s a chance you want to pay your loan off early and save on interest costs, make sure to avoid loans that penalize you for good financial habits.
  • Lack of clarity. Don't sign for a loan if you don't understand the terms of the agreement.
  • Pressure tactics. Some lenders may try to pressure you to make a decision quickly. Make sure you take the time you need to compare multiple offers and make the best decision for you. 

Alternatives to working capital business loans 

Getting a loan for operational expenses may not be the best choice for every business. Other ways to cover your costs include:

How to get a working capital loan

No matter which lender you choose, there are some guidelines for applying for a working capital loan. 

  1. Get to know your credit score and report. Understanding your creditworthiness will help you narrow down which lenders and financial products are accessible to you. Business lenders often look at your business and personal credit scores.
  2. Decide which type of business loan you want. There are short-term loans, traditional term loans, SBA loans and lines of credit available for use as working capital. Each product has different pros and cons. 
  3. Figure out how much loan you can afford. Factors like gross annual revenue and current debt will help inform how much you will get approved for. Don’t borrow more than you can responsibly pay back. 
  4. Compare loans and lenders. Start looking at lenders who offer the type of working capital loan you want. Be sure to compare the same term length and loan amounts. 
  5. Gather documents. Your loan application will require a lot of financial disclosures, and preparing the information in advance will expedite the process. Required documentation may include articles of incorporation, business name registration, business tax forms, profit-and-loss statements and outstanding debt information. 
  6. Apply for the loan. Many lenders have an online application process, making applying relatively easy if you have your documents in hand. Depending on the lender, there may be an underwriting process that requires someone to reach out to you for more information.

Where to get a working capital loan

Nearly every lender offers loans that can boost your working capital, though not every lender provides working capital loans specifically. The best place for your business to get a working capital loan will depend on your business’s creditworthiness. Options to consider:

Banks

Traditional banks offer a variety of business loans that you can use for operational expenses. These may include business lines of credit, term loans or working capital loans. But banks tend to have tight lending requirements, such as requiring two years in business and a personal credit score of 670 or higher. 

Online lenders

Online lenders work well for businesses with fair-to-bad credit or those needing fast funding. The minimum FICO credit score set by these lenders can range from 500 to 650. Most online lenders also fund within 24 to 72 hours, ideal if you need extra working capital right away. 

SBA lenders

Nearly any SBA loan can be used as a working capital loan, such as the 7(a), Express or Microloan. Express loans work well if you need fast SBA funding, but expect other SBA loans to take 30 to 90 days for approval. 

These loans are backed by the U.S. Small Business Administration, and lenders are required to keep interest rates below the SBA’s maximum rate. Your business still must meet the criteria set by the lender, which may be strict. Depending on where you live, you may be able to work with a Community Advantage lender, which offers SBA 7(a) loans to businesses in underserved communities. 

Community Development Financial Institutions (CDFIs)

Underserved businesses that can’t get access to traditional funding can also get a loan from a Community Development Financial Institution (CDFI). CDFIs lend to specific communities and provide education to support the small business’s success. CDFIs can be banks, credit unions, non-profit organizations or loan funds. 

Minority Depository Institutions (MDIs)

Minority Depository Institutions (MDIs) are defined as institutions with either:

  • Mostly owned by minority individuals or 
  • Most of its board is made up of minority individuals; serving minority communities

MDIs typically serve minority communities through lending and additional resources, such as helping non-English speaking individuals. But MDIs aren’t limited to serving those in a minority group, allowing others to support their business model. 

Find an updated list of MDIs that are supervised by the Office of the Comptroller of the Currency (OCC).

Frequently asked questions about working capital loans

How we choose our best working capital loan lenders

Clock Wait
47
years in business
Credit Card Search
30+
lenders reviewed
Loan
22
loan features weighed
Rates
770+
data points collected
To choose the best working capital loans, we researched banks and online lenders that offered term loans, business lines of credit and other loan types. We looked for lenders with relaxed eligibility requirements and programs that are specifically geared toward helping borrowers with lower credit scores. We considered features that make loans affordable and accessible to businesses with different characteristics and needs, including interest rates, whether the loans are secured or unsecured, minimum annual revenue and fees. Additionally, these lenders were evaluated for notable qualities such as funding speed and nontraditional eligibility criteria.
 
When evaluating lenders, we use a 22-point scale to measure quality in five key areas: Accessibility, affordability, transparency, customer service and flexibility. Based on the results, lenders are given a rating between 1 and 5:
 
  • 4.5 or higher: Outstanding
  • 4 to 4.5: Excellent
  • 3.5 to 4: Good
  • 3.5 and under: Average

*The required FICO score may be higher based on your relationship with American Express, credit history, and other factors