Working capital that keeps the lights on between revenue cycles.
Fund payroll, inventory, marketing pushes, or any operating expense — without committing to a long-term loan.
What "working capital" actually means in financing
Working capital is the cash a business needs to run day-to-day operations — pay employees, suppliers, rent, utilities, and overhead while waiting for revenue to come in. A working capital loan is short-to-mid-term financing intended for these operational needs rather than long-term investments.
It's different from a term loan in intent more than mechanics. The use of funds is typically operating expenses, the term is shorter (often under 5 years), and approval emphasizes recent cash flow over long credit history.
Common situations: bridging a slow season, covering payroll while a big invoice clears, funding a marketing campaign before its returns hit the books, or stocking inventory for a peak period.
How a working capital loan works
You apply with 3–6 months of business bank statements. The lender reviews your average monthly deposits, your existing debt service, and your credit profile to determine an offer amount and term.
Once approved, funds typically deposit to your business account within 1–3 business days. Repayment is on a fixed schedule (daily, weekly, or monthly depending on the product) for the agreed term.
Because working capital loans are shorter-term, the monthly payment is higher than a 10-year loan of the same size — but you exit the debt faster, which often suits the short-term purpose better.
What to weigh before you apply.
Pros
- Faster approval than long-term traditional loans
- Flexible use of funds — no restrictions on operating purpose
- Approval emphasizes recent cash flow over long credit history
- Builds your business credit profile when paid on schedule
Cons
- Shorter term means higher monthly payment per dollar borrowed
- Daily or weekly repayment schedules can pinch tight cash flow
- Higher cost of capital than a long-term term loan or SBA
- Personal guarantee almost always required
How it stacks up against other funding products.
Questions before you apply.
How much working capital can I qualify for?
A common rule of thumb is 10–20% of annual revenue, though some businesses qualify for more if their cash flow supports it. We confirm a specific number against your actual statements before presenting offers.
What can I use the funds for?
Anything operational: payroll, inventory, rent, utilities, marketing, supplier payments, equipment repairs. Lenders don't restrict use beyond the prohibition on personal expenses.
How is this different from a regular term loan?
Mechanically, very similar. The difference is the term and the intent. Working capital loans are typically shorter (under 5 years) and approved based on recent cash flow rather than long credit history.