How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Here are 7 working capital loans
Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
---|---|---|---|---|
SBA 7(a) loan with Fundera by NerdWallet | Best for SBA working capital loans | $5,000,000 | 650 | with Fundera by NerdWallet |
Funding Circle - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Working capital loans for established businesses | $500,000 | 660 | with Fundera by NerdWallet |
OnDeck - Online term loan with Fundera by NerdWallet | 5.0/5 Best for Fast working capital loans | $250,000 | 625 | with Fundera by NerdWallet |
Fora Financial - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Working capital loans for bad credit | $1,500,000 | 570 | with Fundera by NerdWallet |
Fundbox - Line of credit | 5.0/5 Best for Unsecured working capital loans | $150,000 | 600 | |
Accion Opportunity Fund - Small Business Working Capital Loan | 5.0/5 Best for Working capital loans for startups | $250,000 | 570 | |
PayPal Business Loan | Best for PayPal Premier or Business account holders | $250,000 | 580 | |
Here are 7 working capital loans
Best for SBA working capital loans
Best for Working capital loans for established businesses
Best for Fast working capital loans
Best for Working capital loans for bad credit
Best for Unsecured working capital loans
Max Amount
$150,000
Min. Credit Score
600
Best for Working capital loans for startups
Max Amount
$250,000
Min. Credit Score
570
Best for PayPal Premier or Business account holders
Max Amount
$250,000
Min. Credit Score
580
I'M INTERESTED IN:
Our pick for
SBA working capital loans
The SBA 7(a) loan program includes term loans as well as line of credit options that you can use for working capital, seasonal expenses or costs to cover supplies and labor while completing a contracted project.
SBA 7(a) loan
with Fundera by NerdWallet
Max loan
$5,000,000
Min. Credit score
650
Apr range
11.50-15.00%
with Fundera by NerdWallet
Our pick for
Working capital loans for established businesses
Funding Circle’s loans can fund within a matter of days, but you’ll need at least two years in business to qualify.
Funding Circle - Online term loan
with Fundera by NerdWallet
Max loan
$500,000
Min. Credit score
660
Apr range
15.22-45.00%
with Fundera by NerdWallet
Our pick for
Fast working capital loans
OnDeck’s same-day business loans are available to business owners with credit scores of 625 or more.
OnDeck - Online term loan
with Fundera by NerdWallet
Max loan
$250,000
Min. Credit score
625
Apr range
27.20-99.90%
with Fundera by NerdWallet
Our pick for
Working capital loans for bad credit
Fora Financial offers working capital loans to borrowers who have a personal credit score of 570 or higher.
Fora Financial - Online term loan
with Fundera by NerdWallet
Max loan
$1,500,000
Min. Credit score
570
with Fundera by NerdWallet
Our pick for
Unsecured working capital loans
Fundbox offers working capital lines of credit up to $150,000. You do not need to put up physical collateral, but the lender does require a UCC lien, and in some cases, a personal guarantee.
Fundbox - Line of credit
Max loan
$150,000
Min. Credit score
600
Apr range
36.00-99.00%
Our pick for
Working capital loans for startups
You may be able to qualify for a working capital loan from Accion with three months or more in business.
Accion Opportunity Fund - Small Business Working Capital Loan
Max loan
$250,000
Min. Credit score
570
Apr range
8.49-29.67%
Our pick for
PayPal Premier or Business account holders
PayPal Working Capital loans are available to PayPal Premier or Business account holders. Loan amounts range from $1,000 to $250,000.
PayPal Business Loan
Max loan
$250,000
Min. Credit score
580
- 250+ small-business products reviewed and rated by our team of experts.
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What is working capital?
Types of business working capital loans
Business lines of credit
SBA loans
Term loans
Invoice financing
🤓 Nerdy Tip
By industry standards, a bad credit score is considered any score between 300 and 629. Many things impact credit scores, including delinquencies or bankruptcies, and also mix of credit account types and length of credit history. If your credit score is preventing you from getting a loan, here are tips for building your credit.Pros and cons of working capital loans
Pros
- Suitable for cash flow gaps and seasonal slows. Working capital loans can easily provide your business with the funds needed to address slower periods, whether your business operates seasonally or is experiencing a one-off sales dip.
- Flexible funds. You can use a business working capital loan for a variety of purposes, such as purchasing inventory or supplies, making payroll and covering utilities.
- Accessible to a wide variety of businesses. Although some working capital loans require that you meet strong eligibility criteria, others — like online business loans or loans from other alternative lenders — can be more flexible.
- Can fund quickly. Some online lenders can provide same-day financing, whereas others may take a few business days. More traditional lenders, however, will have a longer funding timeline.
Cons
- Frequent payments. Working capital loans typically have short repayment terms — and some lenders may require daily or weekly payments.
- May be expensive. Some types of business working capital loans can carry high annual percentage rates (APRs) and other fees.
- Different ways of charging interest. Certain lenders may charge interest as a factor rate — which can make it difficult to understand the cost of your financing — as well as compare it to other lenders. You should always try to translate the interest a lender charges into an APR to get a better sense of loan costs.
Where to get a working capital loan
- Banks and credit unions are good options for established businesses with collateral and strong credit, and tend to offer the lowest interest rates.
- Online lenders may make more sense if you have a spotty credit history, though they will typically charge higher APRs than banks and credit unions. Invoice financing loans also typically come from online or fintech lenders.
- Community development financial institutions (CDFIs), which can include credit unions and nonbank lenders, may also offer working capital loans. CDFIs are usually missioned to lend to underserved or marginalized communities, so they may be able to offer lower rates with more relaxed criteria than traditional lenders. For example, Accion is a nonprofit CDFI that offers rates as low as8.49% for businesses that have been operating for at least a year and have a minimum570credit score.
How to get a working capital loan
- Understand your financing needs. Working capital loans are typically for short-term business needs. Start by assessing if your business really needs capital now, or if you can qualify for a longer-term, more affordable loan. You’ll also want to determine how much capital your business needs.
- Research lenders. Do some research to find lenders that suit your specific business needs, and make sure you understand their business loan requirements.
- Gather business documents. You’ll need to provide financial statements like profit and loss statements, bank statements or tax returns, as well as business and legal documents, like your operating agreement and business plan.
- Apply with lenders. Online lenders can review applications in as little as a few hours, while banks tend to take longer. SBA loans can have the longest application timelines. If you’re approved for financing from an online lender, you could have access to your working capital within a few days. Again, bank and SBA lenders will likely take longer.
Alternatives to working capital loans
- Invoice factoring lets you turn unpaid invoices into fast working capital. The factoring company buys your invoices for an upfront payment minus a fee, and collects payment directly from your customer. Invoice factoring is best for B2B companies that are struggling to qualify for other types of financing. Since this isn’t technically a business loan — you’re selling an asset, not borrowing money — factoring companies don’t give as much weight to your credit score or business history as banks and online lenders do.
- Merchant cash advances are a type of financing that you repay with a percentage of your future debit and credit card sales. Because MCA lenders can make these withdrawals automatically, they usually give less weight to other qualification factors like your credit score. However, merchant cash advances usually to have very high fees, making them a funding option of last resort. While invoice factoring is an option if you bill other businesses, MCAs may be available if you work directly with consumers.
- Business credit cards offer a revolving line of credit that you can spend up to a certain limit, and only pay interest on what you’ve spent, similar to business lines of credit. Business credit cards typically require good personal credit, but not a lot of time in business. They can be a good option to cover short-term gaps in cash flow as long as you are diligent about paying down the balance each cycle.
Find the right business loan
Methodology
Wondering if you qualify?
It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.