Understanding working capital loans helps you choose the right financing to manage cash flow and support growth.
A working capital loan is financing designed to cover day-to-day business operations—payroll, inventory, rent, and other short-term expenses. Unlike equipment or real estate loans tied to specific assets, working capital loans provide flexible cash you can use for any business purpose. They're typically short-term (6-24 months) and help bridge cash flow gaps between when you pay expenses and when customers pay you.
Working capital loans provide cash to cover operational expenses when your business needs it most. Here's how they typically work:
Submit your application with financial documents. Most lenders approve within 24-72 hours if you meet requirements (600+ credit, $10k+/month revenue, 6+ months in business).
Once approved, funds are deposited into your business account, usually within 1-3 business days. You can use the money immediately for any business purpose.
Repay the loan through fixed monthly payments over 6-24 months. Payments include principal and interest, typically deducted automatically from your business account.
Revolving credit that lets you draw funds as needed, up to your credit limit. You only pay interest on what you use. Best for ongoing cash flow needs and seasonal businesses. Learn more about business lines of credit.
Lump sum with fixed monthly payments over 6-24 months. Best for one-time cash needs or specific projects. Faster approval than traditional bank loans.
Advance cash based on unpaid invoices. You get paid immediately instead of waiting 30-90 days for customers to pay. Learn more about invoice financing.
Working capital loans are ideal for these situations:
Requirements vary by lender, but generally you'll need:
Learn more about how to qualify for a business loan and credit score requirements.
A working capital loan is a lump sum you repay over time. A line of credit is revolving—you draw funds as needed and only pay interest on what you use. Lines of credit offer more flexibility for ongoing cash flow needs. Compare term loans vs lines of credit.
Amounts typically range from $25,000 to $500,000, depending on your revenue, credit, and time in business. Lenders usually cap loans at 10-30% of annual revenue.
Most working capital loans are approved within 24-72 hours, with funding occurring 1-3 business days after approval. This is much faster than traditional bank loans, which can take weeks or months.
Smaller loans ($25k-$100k) are often unsecured, meaning no collateral required. Larger amounts may require a personal guarantee or business assets as collateral. Learn about personal guarantees.
Learn the fundamentals of working capital and how to calculate it.
Flexible revolving credit for ongoing working capital needs.
Calculate your working capital and see if you need financing.
Compare all financing options to find the best fit.
Get fast approval and flexible terms to cover your cash flow needs.
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