Best Working Capital Loans in 2019

William Anderson

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If you’re starting a new business, or you already own one, having enough working capital is vital to the success of your company. If you don’t have the working capital you need to satisfy your debts and pay for operational costs, your business will cease to exist. But sometimes it’s hard to get the working capital you need to keep things going — this is when loans can be most useful.

We’ve created this guide to provide you with some suggestions on the best working capital loans to obtain in 2018. We overview some of the top lenders on the market to make sure that you understand which lenders are best for particular funding requirements. Make sure to have a read of the whole article before coming to any financing decisions!

What Exactly is Working Capital?

Working capital is the liquid capital that you have access to in order to help fund your business. For example, cash you have in your business checking account is considered to be working capital. In addition, limits on lines of credit or credit cards are also considered to be working capital. Businesses use working capital to invest and pay expenses – it’s the best way to make sure that transactions can occur smoothly.

Assets such as property and equipment are not liquid, hence why they are not considered working capital.

Working Capital for Ordinary Expenses

It’s important to have a certain amount of working capital set aside for ordinary operating expenses. Whether it be paying bills, or purchasing goods and services. Below are some recommended lenders for working capital for ordinary expenses.

Low Credit Score: If you have a low credit score, we recommend that you work with Kabbage. They’re the best lender that accepts extremely low scores, they’ll provide you with up to $100,000 in capital, but generally much less.

Pros

  • Low Credit Score
  • Fast Cash
  • Instant Funding

Cons

  • High Interest Rates
  • No Large Lending Amounts

High Credit Score: If your credit score is above 600, we suggest that you work with either Lending Club or Street Shares. They have high credit requirements, but they can provide working capital quickly. Best of all, they have the lowest interest rates on the market!

Pros

  • Low Interest Rates
  • Fast Cash

Cons

  • High Credit Requirements
  • Long Established Business Requirements

Business Credit Cards

You can also use a business credit card if you want to make purchases for your business. Credit card offerings change throughout the year, so stay on top of which are offering the best sign up bonuses and interest rates.

Pros

  • Flexible
  • Bonus offers
  • Easy-to-use

Cons

  • High interest rates
  • Cash advance fees

COMPANY

  • Transparent terms
  • Loan calculators
  • Lending resources

IDEAL FOR

  • No credit
  • Poor credit
  • Fast funding
  • Emergencies

HOW TO QUALIFY

  • NO credit needed
  • In business for a year
  • Over $50,000 revenue per year

AMOUNT AND APR

  • Maximum of $100,000
  • Min: 24%
  • Max:99%

COMPANY

  • Pre-credit check quotes
  • Other financing options (both personal and business)
  • Good reputation

IDEAL FOR

  • Businesses with history
  • Businesses with good credit
  • Large lending amounts
  • Good interest rates

HOW TO QUALIFY

  • High Credit – 600
  • Over two years in business
  • Over $75,000 in revenue

AMOUNT AND APR

  • Maximum of $300,000
  • Min: 8%
  • Max: 35%

COMPANY

  • Special deals for veterans
  • Other financing options
  • Good reputation
  • Blog with resourceful lending information

IDEAL FOR

  • Established personal credit scores
  • New businesses
  • Low income businesses
  • Decent interest rates

HOW TO QUALIFY

  • High Credit – 600
  • Over a year of being in business
  • Over $25,000 in annual revenue

AMOUNT AND APR

  • Maximum of $100,000
  • Min: 9%
  • Max: 40%

Working Capital for Large Investments or Purchases

If you need to make a large investment or purchase, it’s important that you have enough working capital to pay for it. You’ll need to find lenders that are able to provide you with large amounts of capital at a decent rate. Below we will outline some of the top lenders for large investments or purchases.

Good Rates and Payments Periods: If you’re looking for a large loan with a good rate, you’ll want to work with Lending Club. They can get you up to $300,000 with an interest rate of between 8-35 percent.

Pros

  • High Amounts
  • Low Interest
  • Good Reputation

Cons

  • High Credit Score Needed
  • Long Established Business Period Needed

If you’re looking for large amounts quickly, OnDeck can get you $100,000 in instant cash. They’re great if you want instant cash for a decent rate.

Pros

  • Quick Cash
  • Low Interest

Cons

  • $100,000 Max
  • Decent Credit Needed

COMPANY

  • Pre-credit check quotes
  • Other financing options (both personal and business)
  • Good reputation

IDEAL FOR

  • Businesses with history
  • Businesses with good credit
  • Large lending amounts
  • Good interest rates

HOW TO QUALIFY

  • High Credit – 600
  • Over two years in business
  • Over $75,000 in revenue

AMOUNT AND APR

  • Maximum of $300,000
  • Min: 8%
  • Max: 35%

COMPANY

  • Online chat support
  • Fast application
  • Informative blog

IDEAL FOR

  • Quick access to cash
  • High earning businesses
  • Good interest rates

HOW TO QUALIFY

  • High Credit – 600
  • Over a year of operation
  • Over $100,000 in annual revenue

AMOUNT AND APR

  • Maximum of $100,000
  • Min: 14%
  • Max: 40%

Working Capital Because of Delayed or Missing Invoices

Check out our suggested solution below:

Factoring

If you are worried about your clients paying their invoices, you can use a factoring service to help ensure that you receive some of the invoice. Factoring companies will purchase your invoice off your business for a small fee, they then collect the invoice directly from your client. You’ll want to make sure that you notify your client that you’re selling their invoice.

For factoring, we recommend you work with BlueVine – they can factor invoices up to $5m. They also provide other types of lending.

Pros

  • Large Invoicing Amounts
  • Other Financing
  • Good for New Businesses

Cons

  • Still Make You Pay if Invoice is Declined

COMPANY

  • Fast Cash
  • Offers factoring services
  • Quick Application

GOOD FOR

  • Smaller loans
  • New Business Owners
  • Low-Revenue Businesses

REQUIREMENTS

  • Over 600 PERSONAL credit score
  • Over $120,000 in business related revenue
  • Over 6 months in business

AMOUNT AND APR

  • Maximum loan of $200,000
  • Min: 15%
  • Max: 78%

Do Your Research

No matter what option you choose, it’s important to do some additional research on lenders. You don’t want to end up working with a lender that has a bad reputation. You should always head to Consumer Affairs to research the lenders you’re thinking of working with.

Verdict

We provide non-biased assessments of the top lenders in the market. Make sure to consider the lenders we’ve mentioned in this article.

If you have any other questions about financing your business, make sure to check out some of the other resources on our site! We have a wealth of great resources for new business owners.

William Anderson
Senior Business Consultant

William Anderson has been working with small business owners for the past 10 years. He got his start at an investment bank, but felt that he was too detached from where real people were making decisions that affected local economies. As a result, he took his experience and his MBA degree to work helping local small businesses.