Working capital loans that keep your business moving
A lump sum of financing to cover the everyday costs of running your business — payroll, inventory, rent, and the gaps in between. Funded in as little as 24 hours, so you can act the moment timing gets tight.
A decision in minutes — no hard credit pull to see your options.
- Term
- 12 months
- Common uses
- Payroll · Inventory · Rent
- Funded
- Today
What is a working capital loan?
See how a working capital loan fills the gap between the money leaving your business and the money coming in.
When income dips below expenses, a working capital loan covers the difference — so operations never pause.
A working capital loan is short-term financing that gives your business a lump sum of cash to cover its everyday operating costs — the payroll, rent, inventory, and other bills that keep things running day to day. Rather than funding a major long-term investment, it's designed to smooth out the timing gap between money going out and money coming in.
"Working capital" is simply the cash your business has on hand to cover its short-term bills. When money comes in unevenly — a slow season, a big order to fund, a customer who takes 60 days to pay — that cushion can run thin. A working capital loan tops it back up so operations never skip a beat.
Unlike a revolving line of credit, a working capital loan is delivered as a single lump sum and repaid over a fixed, short term — often a few months to two years — through regular scheduled payments. Approval leans on your business's revenue and cash flow rather than heavy collateral, which is why many working capital loans are unsecured and fund far faster than a traditional bank loan.
In plain terms: a working capital loan covers the cost of running your business, not the cost of building its foundation. Reach for it when you have an operating expense you'll repay soon from incoming revenue — bridging a slow month, stocking up before a busy season, or making payroll while invoices clear. For long-term investments like real estate or major equipment, a longer-term loan is usually the better fit.
How does a working capital loan work?
From application to final payment, a working capital loan follows a short, predictable path — you qualify on your revenue, receive a lump sum, and repay it on a fixed schedule.
Qualifying on cash flow, not collateral
Approval rests mostly on your business's revenue and recent bank-statement history rather than hard assets. Many working capital loans are unsecured, though a lender may still ask for a personal guarantee or a general lien on business assets. Because there's less to appraise than a traditional bank loan, decisions often come in hours and funding within a day.
One lump sum, deposited fast
Once you accept an offer, the full amount is deposited straight into your business checking account — commonly the same or next business day. From there it's yours to put toward any operating cost, from payroll to inventory to rent.
A fixed repayment schedule
You repay over a set term — commonly 3 to 24 months — in regular, equal installments. Depending on the lender and the product, payments are drafted automatically on a daily, weekly, or monthly cycle, and the total amount you'll repay is set at the outset. That makes your payments predictable from day one. Exactly how that total is calculated — and why the length of your term matters so much — is covered in Rates & fees below.
What does a working capital loan really cost?
The number a lender quotes and the number you actually pay aren't always the same. Many working capital loans — though not all — are priced with a "factor rate" instead of an interest rate, and that one difference changes everything. Start with the picture below, then we'll unpack it.
Same total repaid · same cost · very different approximate APR
APRs are approximate and use a standard estimate; with daily or weekly automatic payments, the real figure can run higher.
How factor-rate pricing works
A factor rate isn't an interest rate. It's a multiplier applied to the amount you borrow. A 1.30 factor means you repay $1.30 for every $1 you borrow — so a $50,000 loan becomes $65,000. That cost is set at the start and doesn't grow or shrink as you pay it down. That's the key difference from a traditional interest-based loan, where interest is charged on your shrinking balance — so paying the loan down, or paying it off early, actually reduces what you owe. Not every working capital loan uses a factor rate, so the first question to ask any lender is simply: is this an interest rate or a factor rate?
The lesson: term length is the hidden price
Most owners assume that paying a loan off early always saves money. With many factor-rate working capital loans, the borrowing cost is largely determined when you sign — not as you repay. That flips the usual math: a shorter term doesn't lower your cost, it raises your approximate APR, because you're paying the same fixed amount over less time. It's why a factor that "sounds small" can be one of the more expensive ways to borrow.
Other costs to check
Beyond the rate or factor, watch for a one-time origination fee (commonly 1%–5% of the amount), and read the prepayment terms closely — on an interest-based loan, paying early should save you money; on a factor-rate loan it often won't, unless the lender offers an early-payoff discount. Always ask before you sign.
Compare every offer the same way
Whoever you borrow from, insist on two numbers in writing — the total dollars you'll repay and the APR — and compare every offer on those, never on the factor rate alone. That single habit is the best protection a borrower has. It's also how Fundur presents every offer: total repayment cost and APR, side by side, so the comparison is honest from the start.
Rates, factor rates, and fees vary by lender and business; figures shown are illustrative, and your actual terms are disclosed in full before you accept.
What can you use a working capital loan for?
A working capital loan can cover almost any short-term operating cost — the everyday expenses that keep your business running while revenue catches up.
Unlike financing tied to a single purchase, a working capital loan funds your operating expenses — the ongoing costs of running the business — rather than one specific asset. Because the funds arrive as one lump sum, owners most often use it to:
- Cover payroll — keep every pay run on time even when customer payments run late.
- Purchase inventory — stock up before peak season or lock in a bulk discount, then repay as it sells.
- Bridge slow-paying invoices — access cash now while clients take 30–90 days to settle.
- Fund a large order or new contract — cover upfront materials and labor to deliver before you're paid.
- Handle unexpected expenses — cover a surprise bill or emergency repair without draining reserves.
- Smooth seasonal cash flow — carry a seasonal business through quiet months, then repay when sales rebound.
- Invest in growth and overhead — fund a marketing push or stay current on rent, utilities, and software, and repay from the revenue it supports.
…and almost any other short-term operating expense.
How does a working capital loan compare?
A working capital loan is one of several ways to fund a business. Here's how it stacks up against the main alternatives — and when another option is the better fit.
There's no single "best" option — each solves a different problem, and many businesses use more than one. A working capital loan shines when you need money quickly for short-term operating costs you'll repay soon from revenue. A line of credit is better for ongoing, unpredictable needs; a term loan or SBA loan for large, long-term investments; and equipment financing when the purchase is the collateral. The right choice depends on what you're trying to accomplish with the money — not simply the type of business you own; the same bakery might reach for a working capital loan one month and equipment financing the next.
One caution when you compare: a working capital loan and a merchant cash advance are often both priced with a factor rate, so the same rule from above applies — ask for the total dollars you'll repay and the APR, and compare offers on those numbers, not on the factor rate alone.
When does a working capital loan make sense?
The same loan can be a smart move or an expensive mistake, depending on why you're borrowing. Here's how to tell the difference.
The goal isn't simply to qualify for financing — plenty of businesses can. It's to choose financing that leaves the business stronger, rather than trading a short-term fix for a longer-term problem.
🟢 A working capital loan makes sense when…
- The need is short-term, and you'll repay it soon from incoming revenue.
- The expense will generate or protect revenue — fulfilling a big order, stocking for a busy season.
- You have a clear, timed reason — bridging a slow month, or covering payroll while invoices clear.
- Speed matters, and waiting weeks for a bank isn't an option.
- Your cash flow can comfortably absorb the payments, including any daily or weekly drafts.
🔴 Look at other options when…
- You're funding a long-term asset like property or major equipment — a longer-term loan costs far less.
- You're facing a problem that isn't temporary — a shortfall that keeps returning — which a loan can delay rather than fix.
- Your cash flow can't reliably handle frequent payments — a tight schedule can strain you further.
- You'd be stacking — taking one loan to help repay another — a common path into a cycle that's hard to escape.
- You don't yet know the total cost and APR — never borrow on a number you can't compare.
The theme across the red-light list is the same: a working capital loan is a bridge, not a foundation. It works when it carries you across a short, temporary gap you can already see the other side of. It becomes dangerous when it's used to cover a shortfall that keeps returning — because the fast, frequent payments that make the product convenient can tighten cash flow further, sometimes tempting a business into a second loan to manage the first. That stacking pattern is how manageable borrowing turns into a debt cycle.
A responsible lender helps you avoid that — sizing the loan to an amount your revenue can comfortably repay, and telling you honestly when a working capital loan isn't the right tool at all. That's the standard worth holding any lender or financing marketplace — including Fundur — to.
Do you qualify for a working capital loan?
Every lender sets its own underwriting standards, so there's no single cutoff that decides who qualifies. But most look at the same five core factors when they review a business. Here's what they're weighing — and roughly where your business fits.
See how lenders may view your profile
Adjust the five factors below. This is an educational guide, not a lending decision, and checking never affects your credit.
No single factor decides the outcome; lenders weigh them together. A newer business with strong, steady revenue may qualify where the numbers alone wouldn't suggest it, and a temporary dip in one area can be offset by strength in another. In general, the longer your track record, the steadier your revenue and cash flow, and the clearer your reason for borrowing, the more options — and better terms — you're likely to see.
What you'll typically need to apply
Most applications ask for basic business details and three to six months of recent business bank statements to verify revenue. Larger requests may call for tax returns or a simple profit-and-loss statement. A government-issued ID and a voided business check are usually needed at funding.
Can you qualify with fair or building credit?
Often, yes. Because many working capital lenders weigh revenue and cash flow heavily, businesses with fair or rebuilding credit can still qualify — especially with consistent deposits. A lower score may mean a higher rate or smaller amount, and steady on-time payments strengthen your profile for better terms later. Because lenders weigh these factors differently, a decline from one lender doesn't mean another will reach the same decision — one may focus on revenue where another leans on credit.
How to get a working capital loan
Applying through an online marketplace like Fundur is fast and straightforward — most of the process happens in minutes, and many businesses are funded the same or next business day. Here's what to expect.
1Apply in minutes
Share basic details about your business — time in operation, monthly revenue, and industry — and connect or upload a few months of recent bank statements. Checking your options uses a soft credit pull, so it won't affect your credit score.
2Review and compare your offers
If you qualify, you'll see your options side by side — amount, term, total repayment cost, and APR laid out clearly. A dedicated advisor answers your questions and walks you through the differences — comparing the total repayment cost and APR of each option — so you can make the right decision before you commit. No fine print, no obligation.
3Get funded
After you choose the offer that's right for your business, the funds are deposited straight into your business bank account — often as soon as the same or next business day. From there, you put the capital to work and repay on the fixed schedule you agreed to.
Working capital loan FAQs
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