Best Working Capital Loans of 2017

Small Business, Small Business Loans

Managing working capital is key for every successful business. If you do it right, you’ll have the flexibility to invest in your company’s growth and the bandwidth to cover day-to-day expenses.

Working capital loans can help you pay operational costs, such as rent, payroll and debt payments. You shouldn’t use them for long-term investments, such as real estate.

Banks offer the lowest financing rates on these loans, so if you own an established business with strong cash flow, you may want to start with one. But if the bank says no or you need cash fast, you can turn to alternative lenders. Many working capital loans can be used for multiple business needs, so consider how you plan to use the proceeds before you apply.

Our recommendations

Working capital loans for everyday needs

Working capital loans for large purchases

Working capital loans if you have unpaid customer invoices

Working capital loans: summary

Working capital loans for everyday needs

The term “working capital” can encompass virtually every facet of your finances, but ultimately you need it to, well, keep your company working. That could include coping with seasonal dips in revenue, covering maintenance costs, keeping your payroll up to date or managing your inventory.

If your personal credit score is at least 500: If your business makes at least $50,000 in annual revenue, Kabbage offers quick working capital loans to help keep it afloat. That convenience does come with annual percentage rates higher than some other online lenders charge.

If your business makes $100,000 or more per year, a term loan from OnDeck is another option. However, note that bad-credit borrowers will likely receive APRs on the high end of the lender’s scale.

If your personal credit score is more than 600: StreetShares lends to businesses that are at least a year old and have earned at least $25,000, making it a good fit for companies that are still building revenue. However, you can only qualify for up to 20% of your annual revenue, so it might not be a great option if you’re looking for a larger lump sum.

kabbage
ondeck
Street Shares
Good option if you:
• Have bad personal credit.
• Need fast cash.
Have bad personal credit.
• Own a business with strong cash flow.
• Own a retail or food service business.
Have good personal credit.
• Own a business with lower revenue.
Do you qualify?
• No minimum credit score.
• 1+ year in business.
• $50,000+ in annual revenue.
• Must have a business checking, payment platform or accounting software account.

• 500+ personal credit score.
• 1+ year in business.
• $100,000+ in annual revenue.
• 600+ personal credit score.
• 1+ year in business.
• $25,000+ in annual revenue.
Borrow:
$2,000 to $100,000$5,000 to $500,000 $2,000 to $100,000
APR:
24% to 99%9% to 99% 9% to 40%
Learn more at Kabbage
Learn more at OnDeck
Learn more at StreetShares


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Working capital loans for large purchases

If you need a large sum to cover an equipment purchase or minor expansion project, focus your search on lenders that offer the lowest APRs. SmartBiz provides U.S. Small Business Administration loans with APRs from 8% to 8.7%, the cream of the lending crop. To qualify, your business needs to have been in operation for two or more years and make at least $50,000 in annual revenue. You also need a personal credit score of at least 600 or 650, depending on the loan size.

SmartBiz’s application can be lengthy and complicated due to additional SBA requirements. If you need quicker access to cash for large purchases, you can consider Funding Circle. Its APRs start at 7% but range up to 36%. You need at least two years in business and a personal credit score of at least 620 to qualify, but there is no minimum annual revenue requirement.

If your credit is subpar but you still need a lump sum, OnDeck considers your business’s cash flow over your credit. You need a personal credit score of at least 500 and at least $100,000 in annual revenue to qualify for funding from OnDeck, but the lower your credit score, the higher your rate will likely be.

smartbiz
fundingcircle
ondeck
Good option if you:
Have good personal credit.
• Need long-term capital.
• Want low rates.
• Prefer SBA loans.
Have good personal credit.
• Own an established business.
Have bad personal credit.
• Own a business with strong cash flow.
• Own a retail or food service business.
Do you qualify?
• 600+ personal credit score for loans of $30,000 to $150,000.
• 650+ personal credit score for loans of more than $150,000.
• 2+ years in business.
• $50,000+ in annual revenue.

• 620+ personal credit score.
• 2+ years in business.
• No minimum annual revenue required.
• 500+ personal credit score.
• 1+ year in business.
• $100,000+ in annual revenue.
Borrow:
$30,000 to $350,000$25,000 to $500,000
$5,000 to $500,000
APR:
8% to 8.7%7% to 36%9% to 99%
Learn more at SmartBiz
Learn more at Funding Circle
Learn more at OnDeck


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Working capital loans if you have unpaid customer invoices

Any company that works in the business-to-business sector will face gaps in cash flow, namely when clients pay 30, 60 or even 90 days late. To help keep your business running while the check’s in the mail, consider invoice financing, a financing method in which the lender fronts you the money from outstanding invoices. It’s a good option when you’re in a pinch, although high APRs do make these services a pricey pick.

As long as the companies that owe you money have strong credit, BlueVine can front you cash even if your business is new and you have poor credit. The lender requires a minimum personal credit score of only 530, but your business must have at least $120,000 in annual revenue to qualify.

If you need fast financing, Fundbox can get you cash in one to three business days. It doesn’t require a minimum personal credit score or minimum annual revenue. You do, however, need to have compatible accounting software to access Fundbox.

bluevine
fundbox
Good option if you:
Have bad personal credit.
• Own a business with strong-credit customers.
• Own a newer business.
Have bad personal credit.
• Need fast cash.
• Want to finance smaller invoices.
Do you qualify?
• 530+ personal credit score.
• 3+ months in business.
• $120,000+ in annual revenue.
• No minimum credit score.
• Must use online accounting software such as QuickBooks, FreshBooks or Xero.
• No annual revenue requirement.
Borrow:
$20,000 to $2 million$1,000 to $100,000
APR:
17% to 60%16.4% to 76.5%
Learn more at BlueVine
Learn more at Fundbox


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Working capital loans: summary

Funding optionsGood option if you:Do you qualify?Loan Amount & APR
Kabbage loans
Learn more at Kabbage

Have bad personal credit.
• Need fast cash.

• No minimum credit score.
• 1+ year in business.
• $50,000+ in annual revenue.
• Must have a business checking, payment platform or accounting software account.
• $2,000 to $100,000.
• 24% to 99%.
ondeck
Learn more at OnDeck
Have bad personal credit.
• Own a business with strong cash flow.
• Own a retail or food service business.
• 500+ personal credit score.
• 1+ year in business.
• $100,000+ in annual revenue.
• $5,000 to $500,000.
• 9% to 99%.
StreetShares loans

Learn more at StreetShares
Have good personal credit.
• Own a business with lower revenue.
• 600+ personal credit score.
• 1+ year in business.
• $25,000+ in annual revenue.
• $2,000 to $100,000.
• 9% to 40%.
smartbiz

Learn more at Smartbiz


Have good personal credit.
• Need long-term capital.
• Want low rates.
• Prefer SBA loans.
• 600+ personal credit score for loans of $30,000 to $150,000.
• 650+ personal credit score for loans of more than $150,000.
• 2+ years in business.
• $50,000+ in annual revenue.
• $30,000 to $350,000.
• 8% to 8.7%.
FundingCircleLogo

Learn more at Funding Circle
Have good personal credit.
• Own an established business.
• 620+ personal credit score.
• 2+ years in business.
• No minimum annual revenue required.
• $25,000 to $500,000.
• 7% to 36%.
bluevine
Learn more at BlueVine
Have bad personal credit.
• Own a business with unpaid invoices.
• Own a business with strong-credit customers.
• Own a newer business.
• 530+ personal credit score.
• 3+ months in business.
• $120,000+ annual revenue.
• $20,000 to $2 million.
• 17% to 60%.
FundBox Logo
Learn more at Fundbox
Have bad personal credit.
• Own a business with unpaid invoices.
• Need fast cash.
• No minimum credit score.
• Must use online accounting software such as QuickBooks, FreshBooks or Xero.
• No annual revenue requirement.
• $1,000 to $100,000.
• 16.4% to 76.5%.

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Evaluate small-business loans carefully

When looking for a working capital loan, it’s important to compare all of your options based on APR, which represents the true cost of the loan including all fees. To evaluate other loans, you can go to NerdWallet’s small-business loan tool. NerdWallet’s list of lenders is based on factors including market scope, customer experience and lender trustworthiness.


 
Jackie Zimmermann is a staff writer at NerdWallet, a personal finance website. Email: jzimmermann@nerdwallet.com. Twitter: @jackie_zm

Updated Jan. 6, 2017.