Working Capital Loans for Small Businesses
Working capital loans provide short-term funding to cover the everyday expenses of running a business.
Prequalify Now
Complete our online form or speak with a small business specialist at (888) 991-3954.
What is Working Capital?
Working capital, also known as networking capital (NWC) is the money that businesses use to support day-to-day operations. As the difference between current operating assets and liabilities, working capital is a measure of a company’s liquidity, operational efficiency, financial health, and the ability to pay off its debts within a year.
Without enough working capital, a business cannot continue to operate. Maintaining healthy working capital allows you to seize an opportunity as it arises and also provides a safety net to absorb possible bad debts, stabilize cash flow, or provide emergency relief when needed.
Small business working capital loans are perfect for healthy businesses with steady revenue. Working capital loans are ideal for business owners who need flexible, short-term funding without the hassle. With shorter payment periods and flexible usage, Credibly’s working capital loans provide speed, simplicity, and versatility to meet the funding needs of small businesses. Funds are automatically deposited into your business bank account with repayments already set up, so you can focus on running your company.
Working Capital Formula = Current Assets – Current Liabilities
Working capital is the difference between a firm’s current assets and current liabilities.
Current assets are the tangible and intangible items that your company owns and can be easily turned into cash within one business cycle. Along with your checking and savings account, this includes things like accounts receivable, highly liquid marketable securities, inventory, and other shorter-term prepaid expenses.
Current liabilities include all of the debts and expenses firms expect to pay within one business cycle. This typically includes all of the normal costs associated with running a business: utilities, rent, matierials and supplies, interest and principal payments on debt, accounts payable, and accrued liabilities and income taxes.
What Can a Working Capital Loan Do For My Business?
Working capital loans are a perfect way for business owners who need flexible, short-term funding to grow their business without having to make tough decisions as to how they should allocate. With shorter payment periods and flexible usage, Credibly’s working capital solutions provide speed, simplicity, and versatility to meet the funding needs of small businesses. Funds are automatically deposited into your business bank account with repayments already set up, so you can focus on running your company.
Hiring and Payroll
Looking to increase staff or meet payroll? Working capital loans ensure that you have enough cash to pay employees, maintain operations, and scale your business.
Marketing Campaigns
Ready to launch a new marketing campaign or initiative? Working capital loans can help you go to market faster and help you meet increased demand.
Cash Flow Management
Need to stabilize your cash flow? These business capital loans are ideal for ensuring that you always have enough liquidity to maintain operations.
How to Get a Working Capital Loan
1. Prequalify Online
To get prequalified, follow the “Get Started” button and enter some basic business information.
2. Approval in 24 Hours
After your submission has been processed, a Business Consultant will reach out to discuss the options you qualify for.
3. Receive Same Day Funding
Upon approval and accepting the offer, funds are deposited directly into your bank account so you can use the money immediately.
Anticipated Term Length
6 to 18 months
Factor Rates
As low as 1.15*
Automatic Payments
Daily or weekly**
Loan Details***
Minimum Qualifying Criteria
Working Capital Loans are available to businesses throughout the U.S. which meet certain criteria:
- 500+ credit score
- 6+ months in business
- $15,000+ average monthly bank deposits
Required Documentation
- Signed business loan agreement
- Business mortgage statement if you own; business lease agreement if you rent
- Unexpired government-issued picture ID of all owners
- Bank statements from business banking account—most recent 3 months****
- For loans over $100,000 we require your most recent business tax return
Interest Rates and Fees
- We aim to make both funding and payments intuitive, convenient, and easy to handle.
- We present working capital pricing as a factor rate: Factor Rate = Payback Amount ÷ Funded Amount.
- Origination fee: A one-time 2.5% of total loan amount set up fee is deducted from your proceeds.
Working Capital Loan: Advantages and Disadvantages
Working capital loans are short-term small business loans and designed for companies who need capital quickly. While this type of financing is great for stabilizing cash flow and getting you back on your feet quickly, it may not be the best option for long-term growth initiatives due to the shorter duration.
Pros
- Working capital loans provide immediate assistance for companies that need extra working capital.
- Working capital loans have a variety of ways in which the funds can be used from purchasing inventory, paying employees, and even day-to-day operational needs.
- Traditional bank loans are rigid and difficult to qualify for, with a lengthy time to funding. Our working capital loans are fast, flexible, and intuitive.
Cons
- Working capital loans are short-term business capital loans, so they come with shorter loan terms. Because of which, factor rates tend to be higher than longer-term loans.
- Unsecured loans can have higher rates, due to the associated risk. That said, not pledging collateral is often a positive rather than a negative, depending on your situation.
FAQs About Working Capital
Why is working capital important?
Because working capital is the money you have available to meet your short-term needs, it is critical for sustaining operations. It is also measure of a business’s ability to pay off short-term expenses or debts.
What is the difference between working capital and operating capital?
Operating working capital (OWC) is the measure of a business’s liquidity whereas net working capital (NWC) is the sum of all company assets minus all outstanding liabilities. Operating working capital is all assets, minus cash and securities, minus all short term, non-interest debts.
What are the four main components of working capital?
The four components of working capital are cash management, receivables management, inventory management, and accounts payable management. Investors and analysts assess these aspects of your business to evaluate a company’s cash flow.
Other Financing Options
Merchant Cash Advance
Flexible financing and repayment based on what you can afford
Business Expansion Loan
Long-term loans to help your business grow and expand
Business Line of Credit
Business lines of credit provide the most flexible access to working capital, whenever you need it.
See All Financing Options
Still looking for the right fit? Check out all of Credibly’s business financing options.
Simple Ways to Get Started
When you’re running low on cash and need to support your operations, access to fast, flexible business financing is crucial. To get started, fill out our online prequalification form or call our Customer Success Team at (888) 991-3954.
* Weekly payments for working capital loans have different minimum qualifying criteria than the daily payment option.
** $15K+ avg. deposits for a three-month average and the most recent month.
*** Rates are included in your daily payback quote to simplify repayments and account monitoring. Rates, pricing, requirements and other terms and conditions subject to change without notice.
**** Bank statements must be from the business banking account for the business receiving funds.
Certain products may not be available in all states.
Certain business loan products are made available through Retail Capital LLC, a licensed California Finance Lender.
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