8 Best Business Cash Flow Loans In The United States [2023]

Starting and running a business requires an infusion of cash from time to time. A vast majority of entrepreneurs seek debt (loans) to operate and grow their businesses. Based on the nature, age, growth trajectory, the amount required, and urgency of cash for the business, traditional business loans may not make sense to business owners.

Business Cash Flow Loans can be a great choice for many business owners who have a decent cash flow and require a loan. These loans get processed fairly quickly too.

Best Business Cash Flow Loans

We have compiled a list of some of the best business cash flow loan providers in the United States. Most of these businesses offer multiple services to cater to businesses. Please understand the product fully and read all offer details carefully before signing any contract or financial documents. The terms and conditions, offers, and interest rates change all the time, so make sure you read the most current details on the respective websites.

• 1. Fundbox (up to $150,000)
• 2. Bluevine (up to $250,000)
• 3. National Funding (up to $500,000)
• 4. Kabbage (by American Express)
• 5. Ondeck
• 6. Fora Financial (up to $750,000)
• 7. Credibly (up to $400,000)
• 8. FundThrough

1. Fundbox (up to $150,000)

If your business is based in the United States and is making $100,000 or more in annual revenue, you may qualify for a Business Line of Credit of up to $150,000 at Fundbox.

The business needs to be in existence for at least six months, associated with a valid business checking account.

The application process is quick, and you can get a decision in as less as 3 minutes. Once approved, the funds can be disbursed to you as quickly as the next business day.

The repayment frequency is weekly and the fees will vary based on the business profile. They also have a no prepayment penalty clause – that can help you save money on interest and fees.

2. Bluevine (up to $250,000)

Bluevine provides a business line of credit of up to $250,000 (yes, a quarter million dollars). The business needs to be generating at least $10,000 in monthly revenue and needs to be running for at least 6 months before applying for a business line of credit at Bluevine.

The business needs to be in the United States (incorporated or operational in an eligible state in US) except in the following states:

• Nevada
• North Dakota
• South Dakota

The application process is quick, with the decisions coming in as fast as 5 minutes. Once approved, the funds can be disbursed to you in a few hours – depending on the method of payment chosen.

Wire transfers cost a fee, but are quicker. ACH transfers are slightly slower, but still, in most cases, you can get the funds on the next business day.

The repayment happens automatically from your account, on a weekly basis.

3. National Funding (up to $500,000)

National Funding is an alternative lender that can help businesses with business loans of up to $500,000. The application approval process takes about 24 hours in general.

National Funding connects you with a funding specialist to help determine the best-suited financing option for your business – be it a business term loan or a working capital loan or something else.

4. Kabbage (by American Express)

Kabbage is a great option for business cash flow loans if the business is doing $3,000 or more in monthly revenue. However, the business needs to be in existence for a year, at least for applying at Kabbage.

The application process is quick and approval can be granted for a business line of credit in a matter of minutes at Kabbage.

Upon approval, it may 1-3 business days for the funds to be available to you, depending on your bank account.

5. Ondeck

Ondeck provides a business line of credit starting from $6,000 all the way up to $100,000.

For availing a business line of credit at Ondeck, the business needs to be in existence for at least 12 months, and be generating an annual revenue of $100,000.

You can apply for a business line of credit at Ondeck online. Upon completing the application, you will be matched with an advisor who will discuss your business cash flow loan options with you.

Once approved, the money can be disbursed to your account as soon as 24 hours.

6. Fora Financial (up to $750,000)

Merchant Cash Advance is a funding option available at Fora Financial. A business can get approved for an amount of up to $750,000.

The application process is simple with same-day approvals possible for qualifying businesses.

7. Credibly (up to $400,000)

Businesses can apply for a business line of credit at Credibly ranging from $5,000 to $400,000. The business must be based in the United States, and in existence for more than 6 months. Credibly requires the revenue of the business to be more than $50,000 per year.

Credibly allows you to get prequalified online, with just a soft pull on your credit report. The application can be filled out online, and Credibly will connect you with a consultant to discuss your options further.

You can get approved on the same day. Once you agree to the terms of the credit, the funds can be disbursed to your bank account as soon as on the same day.

8. FundThrough

Invoice Financing is available at FundThrough. There are two options for Invoice Factoring – Velocity and Express.

The charges for Velocity start at 2.5% per month for the first 30 days and increase as the number of days increases.

The charges for Express are 0.5% per week.

The process is quick, and in the case of the Express plan, you can get paid the full invoice amount within 24 hours.

What Are Business Cash Flow Loans Or Working Capital Loans?

Business cash flow loans, also known as Working Capital loans, are a method of funding a business based on its future cash flow potential. Business cash flow loans can help business owners and entrepreneurs with some cash at hand to continue funding their business operations, and even growing their business.

Unlike other loans where the bank or lender evaluates the risk of loan repayment via credit scores and credit history, business cash flow loans are more dependent on the business’s previous cash flows (how much money they made after expenses, each month) and potential cash flows in the future.

Advantages of Business Cash Flow Loans

• Business cash flow loans are unsecured, what that means is that you do not require to provide a business asset as collateral to get this loan.
• These loans are processed fairly quickly too, so if the speed of cash infusion is important to you, this might be the right choice for you.
• Easy application process – mostly completed online.
• It may also work for businesses that don’t have a great credit history.

Disadvantages and Potential Risks Of Business Cash Flow Loans

• Since the risk measurement is primarily done on the basis of cash flows, and as all business cash flow projections carry an inherent risk, business cash flow loans carry higher interest rates. You might be able to secure loans at a lower interest rate at a bank or a credit union (that also has downsides – the process might be slow, you might not even get approved, you might get approved for a very small amount, etc.)
• Business cash flow loans do not require business assets as collateral for loan approval. However, the lenders may require a personal guarantee from you and may put a lien on your business in case you default on the loan.
• The frequency of repayment tends to be short – even daily repayment is required in some cases.

What Is The Approval Process For Business Cash Flow Loans?

Banks or lenders who issue business cash flow loans use a scoring model to determine how much loan can be approved for which business. They may use multiple data points such as previous monthly cash flows, variation in monthly cash flows, growth trend of cash flows, future projections of monthly cash flows, industry in which the business operates, the location where the business is located, operating margins, etc. to determine the maximum loan amount they can approve.

Even though it might seem easier to procure a business cash flow loan, the downside is that the interest rates are higher, typically. For relatively new business owners it might be the only option to secure some cash to run and grow their business. For growing businesses, the interest rate might not be a deterrent either.

Types of Business Cash Flow Loans For Small Businesses

• 1. Short-Term Cash Flow Loans
• 2. Business Line of Credit
• 3. Merchant Cash Advance
• 4. Invoice Financing Or Account Receivable Financing
• 5. Business Term Loans
• 6. Business Credit Cards

1. Short-Term Cash Flow Loans

Short-term cash flow loans are easy to procure but come with very high interest rates.

They are useful for newer businesses with short business histories. Since the lender has limited information on the business, they charge a higher interest rate to get compensated for the risk they are taking by lending out money.

Short-term cash flow loans can be a good option if you can cope with the interest rates, and pay them off quickly to avoid overpaying high interest. Carefully review the terms of the loan to see if there are fees or penalties associated with paying off the loan earlier than the payoff date on the contract.

2. Business Line of Credit

A business line of credit works like a credit card – you get approved for a certain amount, you borrow some money, you pay it back, the credit limit resets and you can borrow again.

It offers the entrepreneur revolving credit, hence is very useful. Entrepreneurs don’t have to apply for loans every single time they need some cash, they can just tap into the business line of credit, and pay it off once they can.

The business line of credit can be used to operate and grow the business by purchasing inventory, running marketing campaigns, hiring new employees, etc. Entrepreneurs can also withdraw cash from a business line of credit for cash-based expenses.

Typically it is more difficult to get approved for a business line of credit, but it comes with lower interest rates than business credit cards.

3. Merchant Cash Advance

Merchant cash advance uses a business’s future cash flow to approve the loan. A lump sum amount is disbursed, and then a daily repayment is required based on the sales transactions the business does. A repayment rate is computed on the monthly revenue made by the business.

A merchant cash advance is probably the costliest option out there.

Merchant cash advance lenders use “factor rate” instead of using general lending terminologies such as Annual Percentage Rate or Interest Rate. This can be confusing for some business owners.

Merchant Cash Advance Example

For example, if a business requires a $10,000 merchant cash advance, the lender can charge a ‘factor rate’ of 1.5, for a period of 180 days, at a repayment rate of 10% of revenues.

Total repayment: At a ‘factor rate’ of $10,000, the total money that the business needs to pay back is 1.5 * $10,000 = $15,000 in the next 180 days.

Daily Repayment Amount: For computing the repayment amount, we need to take into account the monthly sales the business is making. The repayment rate is 10% of revenue.

Case 1: If the business is selling $25,000 worth of products every month, the business will have to pay 10% * $25,000 = $2,500 per month, or $2,500/30 = $83.33 per day.

By paying $83.33 per day, the business will be able to return $15,000 back to the lender in 180 days.

Case 2: If the business is selling $30,000 worth of products every month, the business will have to pay 10% * $30,000 = $3,000 per month or $3,000/30 = $100 per day.

By paying $100 per day, the business can return $15,000 back to the lender in 150 days.

The interest/fees remain the same in both cases, in fact, you end up paying a higher APR when you pay off early (same interest amount paid in shorter time -> higher APR)

4. Invoice Financing Or Account Receivable Financing

Depending on the nature of the business and the payment terms with customers, a business may wait days or even months before their invoices are paid by the customers.

You’ve incurred costs, created and delivered the product or service to the customer, but haven’t yet received the payment from the customer? What can you do now to continue operating your business? Accounts receivable financing can be a great option in such a scenario.

You can get the money, against the invoices (accounts receivables), by paying a small percentage of the total receivable amount as fees to the lender. So, effectively you will get a lower amount than your invoices.

5. Business Term Loans

In a business term loan, an entrepreneur borrows a fixed sum of money upfront, and based on the predetermined fixed interest rate, repays the loan every week or every month (as decided in the contract).

Business term loans may provide you with better interest rates than short-term cash flow loans, but be sure to check all the details before signing the contract – like additional fees or prepayment penalties, etc.

Lenders can use more data about your business to make a decision on your loan, and if they deem your business less risky, you can get a loan at a favorable interest rate.

6. Business Credit Cards

Business credit cards are a convenient option to secure a revolving line of credit for your business. The online application process is easy, and the entrepreneur can get started with a smaller credit limit initially, and get it increased over time.

Read also: Business Credit Cards For Construction Businesses

Having access to a business credit card helps the entrepreneur in case he or she needs to tap into the credit limit (for short periods of time, usually less than a month), without having to apply for a loan every time. If the entrepreneur can pay off the credit card charges by the statement due date, then the interest paid is 0%!

When Should You Consider A Business Cash Flow Loan?

There are many situations in which a business cash flow loan may be of immense value to an entrepreneur. We have listed three such cases below:

1. To overcome small hiccups in the business journey

There can be situations where for a month or two the sales are expected to be down due to seasonality, or other reasons. Also consider cases where something breaks down in the business – such as a machine, electrical device, or plumbing. Businesses don’t always run like clockwork, a business cash flow loan can help the entrepreneur overcome such hiccups.

2. To expand business with new projects or product lines

Growing a business needs capital. If an entrepreneur wants to add new products to the offering, there might be some equipment required to produce and sell it, which requires capital. Business cash flow loans can help with the upfront costs of such expansion plans, and once the earning potential increases, the costs can easily be recouped.

3. To take advantage of a deal to reduce input costs

There are times when you can get a great price if you buy in bulk. If your business requires some input materials and you can use them in the future (before their shelf life expires) to generate more revenues, it makes sense to take advantage of the deal. This can reduce your overall input costs and increase your profit margins. Business cash flow loans can help an entrepreneur take advantage of such bulk pricing deals.

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