Disclaimer: PeerSense is not a lender, bank, or financial institution. We are a capital advisory firm that connects borrowers with potential lending partners. All rates, terms, market data, and estimates shown on this page are approximate and subject to change based on market conditions, borrower qualifications, property specifics, and lender discretion. Nothing on this website constitutes financial, legal, or investment advice. Individual results vary. All information should be independently verified. Past performance and market data do not guarantee future results. Consult with qualified legal and financial professionals before making any financing decisions.
Every business hits moments where cash flow timing does not align with opportunity. A major client pays net-60 but payroll is due Friday. A bulk inventory discount expires next week. Seasonal demand is surging and you need to staff up now, not next quarter.
Working capital loans bridge that gap. PeerSense connects you directly with lenders offering programs from $7,500 to over $1M, with funding timelines ranging from 24 hours to 5 business days depending on your credit profile and business needs. No marketplace bidding. No stacking. One conversation, one direct lender introduction.
Working capital loans and lines of credit provide $50K to $5M+ for operating expenses, inventory, payroll, and growth. SBA 7(a) offers the lowest rates for qualified businesses. Revenue-based and asset-based options available for businesses that need faster access with less documentation.
Written by Ed Freeman, Capital Advisory — PeerSense. Updated March 2026.
A working capital loan is any form of business financing used to fund day-to-day operations rather than long-term investments like real estate or major equipment. The core idea is simple: your business needs cash to operate between the time you spend money (on inventory, payroll, marketing, supplies) and the time you collect revenue from customers. Working capital financing fills that gap.
Unlike SBA loans or commercial real estate loans that fund long-term assets, working capital loans are typically short-term (3 to 18 months) and designed to be repaid quickly as revenue comes in. The application process reflects this: lenders focus more on your recent cash flow, bank statements, and revenue trends than on long-term projections or extensive business plans. Most working capital lenders want to see 3 to 6 months of bank statements, proof of revenue, and a minimum credit score.
The repayment structure varies by product type. Term loans have fixed daily or weekly payments. Lines of credit let you draw and repay as needed, only paying interest on what you use. Merchant cash advances take a percentage of daily credit card or bank deposit volume, so payments flex with your revenue. Invoice factoring advances you cash against outstanding invoices and collects directly from your customers.
At PeerSense, we do not operate as a marketplace where dozens of lenders bid on your deal. Instead, we evaluate your situation during a single conversation, identify the one or two programs that genuinely fit, and make a direct introduction to the lender. This means less noise, faster decisions, and no stacking of multiple high-cost products that can crush a business.
15-minute call covering your revenue, credit, timeline, and funding need
We identify the best-fit product based on your profile and urgency
One introduction to the right lender. No bidding, no spam.
Complete underwriting and receive funds, often within 24 hours to 5 days
Multiple programs designed for different credit profiles, funding speeds, and business needs
There is no single "best" working capital product. The right choice depends on your credit profile, how fast you need funding, and how you want to repay. Here is how the four main options compare.
| Product | Amounts | Terms | Cost | Speed | Min Credit | Best For |
|---|---|---|---|---|---|---|
| Business Line of Credit | $10K - $500K | 12 - 24 months (revolving) | 8% - 25% APR | 3 - 7 days | 680+ FICO | Ongoing cash flow management, repeat access to capital |
| Short-Term Loan | $7,500 - $1M+ | 3 - 18 months | 15% - 40% APR | 1 - 5 days | 680+ FICO | One-time cash infusion for a specific need |
| Merchant Cash Advance | $5K - $500K | 3 - 12 months | 1.1x - 1.5x factor rate | 1 - 3 days | 550+ FICO | Businesses with strong daily revenue and lower credit |
| Invoice Factoring | $10K - $5M+ | Ongoing (as invoices are generated) | 1% - 5% per invoice | 2 - 7 days (initial setup) | Based on customer credit | B2B businesses with outstanding invoices and net-30/60/90 terms |
Pros: Only pay interest on what you draw. Reusable.
Cons: Requires stronger credit. May have annual fees.
Pros: Fast funding. Predictable fixed payments.
Cons: Higher rates than SBA. Short repayment window.
Pros: Easiest to qualify. Payments flex with revenue.
Cons: Most expensive option. Can create cash flow strain.
Pros: Based on customer credit, not yours. Scales with revenue.
Cons: Customers may be notified. Requires B2B invoices.
Not sure which product fits? We will walk you through it in a 15-minute call.
Get a Free ConsultationRequirements vary by program type, but here are the general minimums lenders look for when underwriting working capital loans. Meeting these does not guarantee approval, but falling short on more than one usually means exploring alternative products.
Working capital costs more than SBA or conventional bank loans because the risk is higher and the timeline is shorter. That said, there is a wide range depending on your credit, revenue, and the product type. Here is what to expect.
Best rates go to businesses with 720+ FICO, 2+ years in business, and $50K+ monthly revenue. Some lines have annual fees of $100-$500.
Faster funding = higher cost. A 24-hour funded loan will carry a higher rate than a 5-day funded loan. Always calculate the total cost of capital, not just the rate.
MCAs use factor rates rather than APR. A 1.3x factor on $100K means you repay $130K total. The effective APR depends on how quickly you repay. We generally recommend MCAs only when other options are unavailable or for very short-term needs.
Factoring cost depends on your customer's creditworthiness and how quickly they pay. A 2% fee on a net-30 invoice is roughly 24% annualized, but many businesses find the cash flow benefit outweighs the cost. Learn more about invoice factoring.
Working capital is not one-size-fits-all. Here are six common scenarios where different working capital products solve different problems. If your situation resembles any of these, we can help.
A boutique retailer needs to place a $120K holiday inventory order in August but will not see the revenue until November and December. A 6-month working capital loan covers the purchase, and repayment aligns with the sales season.
A general contractor completed a $400K project but the client pays net-90. Payroll for the next project starts in two weeks. Invoice factoring advances 85% of the receivable immediately, and the factor collects from the client directly.
A restaurant's walk-in cooler fails mid-week. Replacement cost is $18K and the restaurant cannot operate without it. A 24-hour working capital loan covers the emergency, repaid over 6 months from daily revenue.
A delivery company wins a contract requiring 3 additional vehicles. The contract revenue will cover the payments within 4 months. A working capital loan funds the down payments while the vehicles are financed through an equipment lender.
An HVAC company wants to invest $40K in spring marketing to lock in summer installation contracts. Revenue will not catch up for 60-90 days. A line of credit lets them draw funds as ad spend ramps up and repay as jobs close.
A staffing agency added 15 new placements but client payments are net-45. Weekly payroll obligations for the new staff create a $60K gap. Invoice factoring or a short-term loan bridges the gap until client payments arrive.
Have a situation that does not fit neatly into these examples? That is normal. Most deals are unique.
Describe Your SituationHonest comparison: SBA offers better terms, working capital offers speed. Match the product to the urgency.
| Factor | Working Capital | SBA Loans |
|---|---|---|
| Funding Speed | 24 hours to 5 days | 45–90 days |
| Interest Rate | Higher (15%–40%+) | Lower (Prime + 2.75%–6.5%) |
| Documentation | Minimal | Extensive |
| Credit Requirements | 680+ FICO (some programs) | 680+ FICO (stricter underwriting) |
| Loan Amount | $7,500–$1M+ | Up to $5M (MARC, 7(a)) |
| Repayment Terms | 3–18 months (typical) | Up to 10–25 years |
| Collateral | Often unsecured | Usually required |
| Best For | Urgent cash flow gaps | Long-term growth capital |
Need help deciding which option is right for your business?
Learn More About SBA Working Capital OptionsWhen you need cash in 24 to 48 hours and traditional lending is not an option, revenue-based financing and merchant cash advances (MCA) fill the gap. These products are built for speed, not cost efficiency — use them for short-term needs where the return on capital justifies the expense.
MCA and revenue-based financing carry effective APRs of 20% to 50%+. A 1.3x factor rate on a $100K advance means you repay $130K total. If repaid in 6 months, the effective APR exceeds 60%. These products should be used for short-term, high-ROI needs only — not as ongoing working capital.
Stacking multiple MCAs is one of the most common causes of business cash flow collapse. If you already have an MCA and need to refinance or consolidate, talk to us first before taking on additional debt.
Tell us your revenue, credit profile, and timeline. We will match you with the right product — whether that is a line of credit, invoice factoring, or revenue-based financing. No cost, no commitment, no spam.
Working capital is not always the right answer. Sometimes a different product structure gets you better terms, lower costs, or a better fit. Explore these alternatives.
Lower rates, longer terms, government-backed. Best for businesses that can wait 45-90 days and want the cheapest capital available.
Learn moreTurn outstanding B2B invoices into immediate cash. Approval based on your customers' credit, not yours.
Learn moreBorrow against inventory, equipment, or accounts receivable. Higher amounts available for asset-rich businesses.
Learn moreFinance or lease specific equipment with the equipment itself as collateral. Preserves working capital for operations.
Learn moreNot sure which loan is right for you?
Take our 60-second quiz to get matched with the right program.
PeerSense connects you with the right working capital solution for your business. One conversation. Direct introduction.