Skip to content

Cash Flow Loans: What They Are and Best Options

By Randa Kriss, Olivia Chen
Last updated on August 13, 2024
Edited by Sally Lauckner
Fact checked and reviewed
Cash flow loans can be fast and easy to qualify for, but they tend to have higher interest rates than other business loans.

with Fundera by NerdWallet

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

A cash flow loan allows a business to borrow against its future revenue to pay for operational expenses. In other words, lenders primarily evaluate the historical and projected performance of the business to determine whether to approve an application — instead of relying more heavily on the business owner’s credit history or available collateral.
This underwriting process makes cash flow loans available to a wide variety of small businesses, including startups and those facing credit challenges. Interest rates on these products are often higher than on traditional small-business loans, however.

How much do you need?

with Fundera by NerdWallet

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 5 cash flow loans

LenderNerdWallet RatingMax loan amountMin. credit scoreNext steps

American Express® Business Line of Credit*

Read Review
5.0/5

Best for Cash flow lines of credit

$250,000660
Read Review

OnDeck - Online term loan

with Fundera by NerdWallet

4.8/5

Best for Short-term cash flow loans

$250,000625

with Fundera by NerdWallet

Fundbox - Line of credit

Read Review
5.0/5

Best for Cash flow loans for startups

$150,000600
Read Review

Fora Financial - Online term loan

with Fundera by NerdWallet

4.7/5

Best for Cash flow loans for bad credit

$1,500,000570

with Fundera by NerdWallet

Bluevine - Line of credit

with Fundera by NerdWallet

5.0/5

Best for Fast cash flow loans

$250,000625

with Fundera by NerdWallet

Here are 5 cash flow loans

Best for Cash flow lines of credit

American Express Business Blueprint™

Max Amount

$250,000

Min. Credit Score

660

Best for Short-term cash flow loans

OnDeck

Max Amount

$250,000

Min. Credit Score

625

Best for Cash flow loans for startups

Fundbox

Max Amount

$150,000

Min. Credit Score

600

Best for Cash flow loans for bad credit

Fora Financial

Max Amount

$1,500,000

Min. Credit Score

570

Best for Fast cash flow loans

Bluevine

Max Amount

$250,000

Min. Credit Score

625

I'M INTERESTED IN:

Our pick for

Cash flow lines of credit

American Express offers business lines of credit from $2,000 to $250,000 that can be used for working capital needs.

American Express® Business Line of Credit*

Read Review
Max loan amount
$250,000
Min. credit score
660

Pros

  • Streamlined application process with minimal paperwork.
  • Financing from $2,000 to $250,000 available.
  • Accepts borrowers with a minimum FICO score of at least 660 at the time of application.
  • Monthly repayment schedule (as opposed to daily or weekly).
  • No prepayment penalties, account maintenance fees or draw fees.

Cons

  • Must have online checking or PayPal account to verify cash flow.
  • Complex monthly fee structure makes it difficult to compare costs to other lenders.

American Express® Business Line of Credit*

NerdWallet rating 
5.0/5
Max loan amount
$250,000
Min. credit score
660

Our pick for

Short-term cash flow loans

OnDeck’s term loan is available in amounts up to $250,000 with repayment terms up to 24 months. It can be a good option for specific investments in your business.

OnDeck - Online term loan

Read Review

with Fundera by NerdWallet

Max loan amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%

Pros

  • Cash can be available within the same business day (does not apply in California or Vermont).
  • Accepts borrowers with a minimum credit score of 625.
  • Streamlined application process with minimal documentation required.
  • Can be used to build business credit.

Cons

  • Cannot fund North Dakota-based businesses.
  • Requires frequent (daily or weekly) repayments.
  • Interest rates can be high compared with traditional lenders.
  • Charges origination fee.
May fund quickly

OnDeck - Online term loan

NerdWallet rating 
4.8/5
Max loan amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%
May fund quickly

Our pick for

Cash flow loans for startups

Fundbox offers lines of credit up to $150,000. You may be able to qualify with just three months in business.

Fundbox - Line of credit

Read Review
Max loan amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%

Pros

  • Financing available within one business day after approval.
  • Simple application with minimal documentation required.
  • Low minimum credit score, time in business and annual revenue requirements.
  • No prepayment penalties, account maintenance fees or inactivity fees.

Cons

  • Rates are high compared with traditional banks.
  • Weekly repayments required over a short term (maximum of 24 weeks).
May fund quickly

Fundbox - Line of credit

NerdWallet rating 
5.0/5
Max loan amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
May fund quickly

Our pick for

Cash flow loans for bad credit

Fora Financial’s term loan can be used for a wide variety of purposes. You may be able to qualify with a minimum personal credit score of 570.

Fora Financial - Online term loan

Read Review

with Fundera by NerdWallet

Max loan amount
$1,500,000
Min. credit score
570

Pros

  • Cash can be available quickly.
  • Get a discount for prepaying.
  • No collateral required.
  • Low minimum credit score requirement.

Cons

  • Charges a factor rate that makes it more difficult to compare costs with other lenders.
  • Can’t build business credit.
  • Longest loan term is 18 months.
  • Charges an origination fee.

Fora Financial - Online term loan

NerdWallet rating 
4.7/5
Max loan amount
$1,500,000
Min. credit score
570

Our pick for

Fast cash flow loans

Bluevine’s revolving line of credit is available up to $250,000 with repayment terms of 26 weeks. You can receive approval and get funding in as fast as 24 hours.

Bluevine - Line of credit

Read Review

with Fundera by NerdWallet

Max loan amount
$250,000
Min. credit score
625
Est. APR
20.00-50.00%

Pros

  • Cash can be available within 12 to 24 hours.
  • Can be used to build business credit.
  • Low minimum credit score requirement.

Cons

  • Requires weekly payments.
  • Not available in North Dakota, South Dakota or Nevada.
  • Rates can be high compared with traditional lenders.
May fund quickly

Bluevine - Line of credit

NerdWallet rating 
5.0/5
Max loan amount
$250,000
Min. credit score
625
Est. APR
20.00-50.00%
May fund quickly

How Much Do You Need?

with Fundera by NerdWallet

What is a cash flow loan?

Technically, any type of small-business loan that is used to meet cash flow needs could be considered a cash flow loan; however, the term “cash flow loan” may more specifically refer to an unsecured loan that is issued based on the projected revenue of your business.
Cash flow loans can finance a variety of purposes, such as:
  • Purchasing inventory.
  • Hiring staff.
  • Making payroll.
  • Covering day-to-day expenses (e.g., rent, insurance).
  • Managing a seasonal slowdown or cash flow gap.

How do cash flow loans work?

Cash flow loans are usually available from online or other alternative lenders. Instead of relying on your credit score or available collateral, these lenders prioritize your business revenue when underwriting your loan application.
Cash flow lenders may ask to see your bank statements, financial statements and merchant accounts, among other documentation to evaluate your business’s historical and projected performance. Although the lender may check your credit history and ask how long you’ve been in business, these factors tend to weigh less heavily on the decision-making process.
If you’re approved, the lender will also use its evaluation of your finances to set your interest rate and repayment terms.
Some cash flow loans will be structured like a standard term loan or line of credit, while others will work like a merchant cash advance. With the latter, you receive an upfront sum of capital and repay it using a percentage of your debit and credit card sales, plus a fee.
In general, cash flow loans have shorter terms and higher interest rates than more conventional small-business loans, like bank or SBA loans.

Cash flow loan vs. traditional small-business loan

Cash flow loan
Traditional small-business loan
Qualifications
Based on historical and projected performance, or cash flow, of your business.
Based on time in business, business and personal credit histories, revenue, collateral and debt service coverage ratio (DSCR).
Collateral
Personal guarantee or UCC lien.
May also require physical collateral like cash deposits, vehicles or property.
Terms
Typically short term loans – between one year and 18 months.
Between two to 10 years, or up to 25 years for certain SBA loans or commercial real estate loans.
Interest rates
Between 20% to 99%.
Depending on lender and collateral, between 4% and 99%.

Pros and cons of cash flow loans

Pros

Cons

Types of cash flow loans

Term loan

Term loans are the most common type of small business loan, and online lenders like OnDeck and Fora Financial may offer term loans based on future cash flow instead of more traditional loan requirements. Term loans — even those from online lenders — may have lower rates and fees than other types of alternative financing like invoice financing or merchant cash advances (MCAs).

Business line of credit

Lines of credit are revolving business loans, where you can borrow in cash draws up to a certain amount, continue borrowing as you repay the money and only pay interest on the amount you have drawn. Business lines of credit can be expensive, but work well for businesses that have frequent gaps in cash flow due to customer payments or seasonality.

Invoice financing

Invoice financing is a type of business loan that functions similar to a cash advance — where you use unpaid customer invoices as collateral for a lump sum from a third-party invoice financing company. These cash flow loans work best for B2B businesses, especially those that operate seasonally.

Merchant cash advance

Not technically a business loan, a merchant cash advance (MCA) is an alternative form of business financing that involves a company providing a cash advance by essentially purchasing your future sales. MCAs are one of the most expensive forms of business financing, and are generally best as a last resort.

How to get a cash flow loan

To get a cash flow loan, you can follow these basic steps.

Understand your financing needs

Determine what you’re going to use your loan for, how much capital you need and how quickly you need it. Also, think about which type of cash flow loan is the best fit for your needs. For example, if you think a revolving source of funding would be beneficial, maybe a business line of credit is the best option.

Evaluate your business credentials

You’ll want to look closely at your historical revenue, projected revenue, cash flow and other financial data. Although your credit score may not be a top priority for cash flow lenders, you should also check your credit history to help you get a sense of what type of loans you can qualify for, and what loan amount and rate you might expect.

Research and compare lenders

Explore several online lenders to find the right option for your business. When comparing different options, consider factors such as interest rates, repayment terms, funding speed, application process, customer service and lender reputation.

Submit your application

Cash flow lenders typically offer simple, online applications that can be completed in a matter of minutes. You shouldn’t need extensive documentation, but you may be asked to provide:
  • Personal and business tax returns.
  • Personal and business bank statements.
  • Business financial statements (e.g., profit and loss statement or a balance sheet).
You’ll also likely be required to sign a personal guarantee.

Review your loan agreement

Thoroughly review your loan agreement before signing and make sure the interest rates and repayment terms are laid out clearly. Instead of using an APR, some cash flow lenders may give simple interest rates or factor rates, so you’ll want to try and calculate these rates into an APR to get a better understanding of how much your loan costs.
If you have any questions or concerns about your business loan agreement, reach out to your lender for clarification. If a lender won’t provide rates and terms upfront or seems hesitant to provide straightforward answers to your questions, these could be red flags of a predatory company. In this case, you might consider looking for a loan elsewhere.
» Estimate rates and payments with our business loan calculator
Former NerdWallet writer Jackie Zimmermann contributed to this article.
Last updated on August 13, 2024

Methodology

NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including: - Transparency of rates and terms. - Flexible payment options. - Fast funding times. - Accessible customer service. - Reporting of payments to business credit bureaus. - Responsible lending practices.
We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.

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.

See Your Loan Options

Frequently Asked Questions