3 Little-Known Facts About Working Capital Loans

3 Little-Known Facts About Working Capital Loans

Working capital loans are an essential financing option for growing businesses. Small businesses around the world need these loans to fund their running expenses. A working capital loan, also called a cash flow or operating line of credit, allows companies to borrow money for their short-term needs, such as payroll and inventory. However, because these loans are unsecured and typically don’t require collateral like long-term loans, they carry relatively higher interest rates. Small business funding companies like Fundwise can provide you with working capital loans on reasonable terms.

Many small business owners are unaware of the functions of working loan capital; this prevents them from fully understanding a deal before they sign the dotted line. In this blog post, we’ll mention some little-known facts about working capital so that you can make an informed decision before signing up for one.

1) You Don’t Need Perfect Credit to Get Approved for Working Capital Loan

Your credit score is a significant deciding factor in the decision for approval of a working capital loan. However, several alternate lending channels have become available in recent years that offer loans to small businesses even if they have less than perfect credit scores.

Today, it is possible to get approval based on having average FICO scores as low as 550 (anything below 640 is considered subprime).

2) Daily Amounts

Businesses may pay back working capital loans in small fixed daily payments. The amount of money you receive does not have to be based on your business’s net profits. It could be something as simple as a percentage of the total goods or services that your company sells during that day.

This is excellent news for business owners who don’t know how well they will do financially from week to week, month to month, etc. This is also different from long-term loans, where you have to repay loans on a lump-sum basis.

3) A Straightforward Application Process 

The application process for getting a working capital loan is straightforward. The approval process generally takes just a week; since the lenders are paid daily, they don’t have to do extensive research into your company’s financial history or future growth potential.

So, if you’re a business owner and you need some extra funds fast, then this could be right up your alley! In most cases, you can also apply for a second working capital loan even if your first is still active.

If you need more insight on working capital loans, then Fundwise is here to help you. We help San Antonio businesses get their business operations up and running with affordable working capital loans. We offer a range of business and real-estate loans to deserving candidates, helping them fuel their American dream. Apply for funding now; it won’t take you more than 30 seconds.