A working capital loan is short-term financing designed to keep your day-to-day operations running smoothly. Rather than funding a long-term investment, it covers the everyday costs of doing business — payroll, rent, inventory, marketing, and the gaps that appear when revenue and expenses don't line up.
When a working capital loan makes sense
- Seasonal swings. Bridge slow months and stock up before your busy season.
- Payroll protection. Never miss payroll while you wait on customer payments.
- Inventory & supplies. Buy in bulk, take supplier discounts, fulfill a big order.
- Growth opportunities. Open a location, launch a campaign, or hire ahead of demand.
- Emergencies. Cover an unexpected repair or expense without draining reserves.
Benefits
- Same-day funding available on many programs.
- Usually unsecured — based on your revenue, not specific assets (expect a personal guarantee and often a general business lien).
- Longer terms (up to 10 years) are available through SBA 7(a) working capital loans, which take longer to fund.
- Amounts up to $5 million.
- Revenue-based options can work with lower credit scores, at a higher cost.
Typical working capital loan terms (2026)
| Term | Typical range at online lenders |
|---|---|
| Amount | $5,000 – $500,000 (some to $1.5M+) |
| Cost | Factor rate from about 1.06 – 1.50 (often 40%+ APR when annualized) |
| Repayment term | 3 – 24 months |
| Payments | Daily or weekly automatic debits (some monthly) |
| Funding speed | About 1 business day after approval |
| Credit score | Roughly 550 – 680 depending on the lender |
| Time in business | 6 – 12+ months at most lenders |
| Annual revenue | About $100,000+ at most lenders |
| Documents | Application + 3–6 months of business bank statements |
What a $50,000 working capital loan actually costs
| Example | Amount |
|---|---|
| Amount funded | $50,000 |
| Factor rate | 1.20 |
| Total repaid | $60,000 ($10,000 cost) |
| Weekly payment (52 weeks) | ≈ $1,154 (or ≈ $238 per business day if paid daily) |
| Equivalent APR | ≈ 37% |
Market ranges reviewed September 2026. Sources: Bankrate working capital lender comparison. Ranges are typical, not offers; your terms depend on the funding provider.
Working capital loan vs. line of credit
A working capital loan gives you a lump sum up front with a set repayment schedule — best when you know exactly how much you need. A line of credit gives you a revolving limit you draw from as needed, paying interest only on what you use — best for recurring or unpredictable costs. Many businesses use both. When you apply, your advisor will help you pick the right structure at no cost.
Top industries we fund
Healthcare, restaurants, retail, auto repair, construction and contracting, trucking and logistics, professional services, wholesale and manufacturing — and many more. If your business has steady deposits, there's likely a program for you.
Business loans by state
State-backed SSBCI programs, SBA district offices, bank lending totals and disclosure rules differ by state. Pick yours: