The Best Working Capital Loans for Small Businesses in 2025

A working capital loan can act as a lifeline. These short-term financial options are designed to address your immediate financial needs, allowing your business to maintain operations until cash flow improves.

In this article, we'll explore the best working capital loans for startups and small businesses in 2025. With numerous options on the market, we'll focus on those offering fast approval, flexible terms, and competitive interest rates. You'll also learn about how Wise Business can help you manage your business internationally.

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What are working capital loans?

It’s common for small businesses and startups to seek funding to support sustainable growth—whether through small business loans, angel investors, or other external sources.

However, working capital loans are specifically designed to cover operational expenses such as payroll, rent, utilities, inventory payments, and marketing costs. Unlike traditional loans that focus on long-term investments like property and equipment, these loans are intended to address short-term financial needs.

Let's consider a practical example: a US-based company specializing in high-quality fabric for high-end fashion brands. The company experiences a sudden increase in orders from European clients—a tremendous opportunity for growth.

However, the company is faced with a cash flow gap due to the time it takes to receive payments from these clients. They need to pay suppliers up front for raw materials and manufacturing costs, but they won’t receive payment from their international clients for several months.

Without immediate funding, the company may turn down new orders or delay production, missing out on potential revenue. However, a working capital loan could help this business bridge the gap by providing quick access to the funds it needs to cover immediate operational expenses such as raw materials, manufacturing costs, and shipping. As a result, this small business is empowered to set themselves up for long-term success.

While this example is a bit simplistic, it’s a good way to have a sense of the value of working capital loans, especially for smaller businesses and startups. These companies tend to operate on tight margins, with fluctuating cash flows due to seasonal sales, inconsistent accounts receivable, or rapid growth spurts. International businesses also commonly face cash flow problems, including late customer payments, sudden equipment repairs, and unexpected international fees.

Implementing effective cash flow management strategies is essential in ensuring your business is capable of navigating these challenges. In the meantime, you may find it useful to deploy a working capital loan to maintain daily operations, pay suppliers, and cover essential expenses like payroll and rent.

How do working capital loans work?

Now that we have an idea of how working capital loans support small businesses through fluctuating cash flows, let’s explore how they work in practice.

Typically, these loans come with short repayment terms, ranging from six to 36 months.¹ One of their key advantages is the fast approval and funding process, with many lenders disbursing funds within one to three days. This quick turnaround makes capital loans an attractive option for businesses needing immediate cash flow support.

Additionally, depending on the type of loan, working capital loans may be easier to qualify for compared to standard term loans. Many lenders require only a year in business and a personal FICO® Score of 500 to 600, making them accessible to newer businesses or those with less-than-perfect credit.²

Since these loans usually feature a set repayment schedule with fixed payments, they provide solid predictability in managing cash flow. For businesses that opt for a business line of credit, the credit limit resets as the loan is paid off, allowing borrowers to access additional funds as needed. This revolving structure offers flexibility, enabling businesses to draw funds multiple times without reapplying.

Pros and cons of working capital loans

Like any source of external financing, working capital loans come with their own set of advantages and disadvantages. Here’s a quick overview of the pros and cons:

Pros	Cons
Quick access to funds: Their fast approval and funding process means businesses can receive funds in as little as one to three days.	Higher interest rates: Due to their short-term nature, working capital loan interest rates are usually higher than traditional loans.
Flexibility: These loans can be used to cover various operational expenses, and their short repayment periods make it easy for businesses to get back on track fast.	Shorter repayment terms: Their short repayment periods have the potential to strain cash flow if not properly managed, and flexible repayment plans are rarely available.
Minimal collateral requirements: Since these loans require little to no collateral, businesses reduce the risk of asset loss.	Credit-dependent: Your borrower profile and credit score have an impact on the loan terms and interest rate, so they are not available to everyone.

6 of the best working capital loans in 2025

Whether you're a growing startup or an established small business, understanding your working capital loan options can be crucial for navigating financial challenges and seizing growth opportunities.

If you’re interested in securing a working capital loan, it’s worth exploring some of the top working capital lenders available in the United States to help you make an informed decision for your business's short and long-term financial health. The seven best working capital loans listed below include online lenders offering same-day approval, as well as traditional banks with lower interest rates and higher borrowing limits. This guide will help you find the right provider for your business needs.

#1 - Lendio

Features	Details
Loan Amounts	from $5,000 to $2,000,000
Funding Speed	As fast as 24 hours in some cases
Interest Rates	Starting at 6%

Lendio is an online lender offering working capital loans as part of its diverse range of financing options for small businesses.³ Primarily, these offerings are geared towards small business owners who need quick access to funds and entrepreneurs looking to manage short-term cash flow fluctuations.

To apply for a working capital loan through Lendio, business owners can visit their website and complete a simple application form. The process is designed to be quick and efficient, matching borrowers with one of over 75 different lenders based on their specific requirements and likelihood of approval.

#2 - American Express Business Line of Credit

Features	Details
Loan Amounts	From $2,000 to $250,000
Funding Speed	Same-day funding available
Interest Rates	Vary depending on the repayment term; starting at 3-9% for 6-month terms

American Express offers a Business Line of Credit designed to provide flexible financing for small businesses.⁴ Businesses can draw funds as needed up to their credit limit, without the need to pay any application fees. It’s a suitable choice for managing cash flow, handling unexpected expenses, and addressing seasonal fluctuations in business.

There are some eligibility requirements in place to qualify. Business owners must be able to prove that they’ve been operating for at least 12 months, with a minimum annual revenue of $36,000. You’ll also need to have a minimum credit score of 660. Again, specific terms can vary based on certain factors, so you’ll want to explore the offerings before you make a decision.

#3 - OnDeck

Features	Details
Loan Amounts	$5,000 to $250,000
Funding Speed	Same-day funding available
Interest Rates	Starting at 31.30% APR

OnDeck offers working capital loans for small businesses designed to help manage day-to-day expenses.⁵ You can draw from their revolving credit line any time of day, making it an ideal choice for ongoing business needs and maintaining cash flow. Flexible repayment terms are available at 12, 18, and 24 months, so you can select the option that makes the most sense for your business.

Their easy online application process provides businesses with the opportunity to receive same-day approval and funding, with no collateral required for loans up to $250,000. Eligibility is restricted to businesses that’ve been in operation for at least one year. To qualify, businesses need to have a minimum annual revenue of $100,000 and a personal FICO® Score of at least 625.

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#4 - Fundbox

Features	Details
Loan Amounts	$100 to $150,000
Funding Speed	Available as quickly as the next business day after approval
Interest Rates	Starting at 4.66% for 12-week terms

Fundbox offers working capital solutions primarily through their business line of credit.⁶ They’re designed to address the cash flow needs of small businesses and startups looking for flexible funding for various purposes. To qualify, you’ll need to prove at least three months in operation and a minimum annual revenue of $30,000. Business owners must have a personal credit score of at least 600.

Their lower requirements make them an attractive option for newer or smaller businesses, providing fast access to revolving credit for ongoing needs and unexpected expenses. Companies can choose between 12 or 24 week repayment terms based on their unique circumstance. Fundbox’s intuitive online application process comes back with an approval decision in as little as three minutes, so you can get started fast.

#5 - Bank of America

Features	Details
Loan Amounts	$10,000 to $100,000 (Business Advantage Term Loan); $200,000 to $5,000,000 (SBA 7(a) loans)
Funding Speed	Not explicitly stated
Interest Rates	Starting at 7.25% (Business Advantage Term Loan); 10.5%-14% (SBA 7(a) loans)

Small businesses can also opt to apply for working capital loans through Bank of America. The company’s offerings include both conventional and SBA-backed loans, providing options for businesses with varying needs and qualifications.⁷

Bank of America’s Business Advantage Term Loan is designed to provide businesses with quick access to working capital without requiring collateral. It’s best suited for established businesses with good credit histories, as it requires a personal FICO® Score of at least 700 to qualify. Term lengths are 12 to 60 months, with funds disbursed within five business days of approval.

#6 - SBA CAPLines

Features	Details
Loan Amounts	Up to $5 million
Funding Speed	Around 5-10 business days
Interest Rates	Maximum APR of 15% for loans up to $50k and maximum APR of 11.5% for loans over $350k

Some businesses may also qualify for specialized lines of credit under the SBA 7(a) loans program.⁸ Partially backed by the U.S. Small Business Administration, these loans usually offer larger amounts, longer repayment terms, and potentially lower interest rates. However, they’ll also require more complex application processes, taking anywhere from 90 to 150 days, with more specific eligibility criteria.

If you’re looking for quicker funding and simpler requirements, an SBA 7(a) loan may not be the right fit for you. Still, it’s worth discussing as an alternate option for small businesses in need of more substantial capital.

These lines of credit can be revolving or fixed depending on your specific short-term financial needs. Borrowers can draw, repay, and reuse funds as needed within the approved credit limit.

While it’s unlikely that you’ll be able to secure same-day funding through SBA CAPLines, the program boasts a variety of benefits for small businesses. Their flexible financing is tailored to specific business needs, and owners can choose between the four main lines of credit listed below:

CAPLine Type	Purpose
Seasonal CAPLines	For businesses with seasonal sales fluctuations, covering labor, inventory, and other seasonal costs.
Contract CAPLines	For businesses needing funds to fulfill contracts, covering labor, materials, and overhead.
Builders CAPLines	For construction and renovation projects, covering on-site work.
Working Capital CAPLines	A revolving line of credit for general working capital needs like payroll and rent.

SBA-backed loans typically have lower interest rates compared to conventional loans, and they usually allow businesses to attain much higher borrowing limits as well. Their longer repayment terms can help reduce monthly payments, too, so they’re more manageable for businesses to handle.

The Bottom Line

If you’re a small business owner dealing with fluctuating cash flows, there are countless working capital lenders in the marketplace to help you cover your short-term costs. From online lenders with same-day approvals to SBA-backed loans with higher borrowing limits, it’s easier than ever to find a tailored solution to cover costs during periods of fluctuating cash flows.

That said, it’s important to remember that working capital loans aren’t capable of addressing any underlying issues with your company’s cash flow management. If you find that cash flow issues are a routine concern for your business, you may find it useful to examine your business’s overall financial strategies to ensure you’ve set a strong foundation for long-term financial growth.

Are unexpected transaction fees causing cash flow issues for your international business? If so, it’s time to check out Wise Business. Easily make international payments and pay international clients and suppliers without hidden fees or exchange rate markups. By setting up local account details, you can receive payments fast to avoid costly cash flow disruptions.

Save Time and Money On Overseas Payments With Wise Business

Wise Business can help you save big time on international payments.

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in currencies.

Signing up to Wise Business allows access to BatchTransfer which you can use to pay up to 1000 invoices in one go. This is perfect for small businesses that are managing a global team, saving a ton of time and hassle when making payments.

Some key features of Wise Business include:

• Mid-market rate: Get the mid-market exchange rate with no hidden fees on international transfers

• Global Account: Send money to countries and hold multiple currencies, all in one place. You can also get major currency account details for a one-off fee to receive overseas payments like a local

• Access to BatchTransfer: Pay up to 1000 invoices in one click. Save time, money, and stress when you make 1000 payments in one click with BatchTransfer payments. Access to BatchTransfer is free with a Wise Business account

• Auto-conversions: Don't like the current currency exchange rate? Set your desired rate, and Wise sends the transfer the moment the rate is met

• Free invoicing tool: Generate and send professional invoices

• No minimum balance requirements or monthly fees: US-based businesses can open an account for free. Learn more about fees here

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Sources:

1. Best working capital business loans in March 2025 | Bankrate
2. Fico Score | Fico
3. Lendio Website
4. Business Line of Credit | American Express
5. Working Capital Loans | Ondeck
6. Fundbox Website
7. Business Financing | Bank of America
8. Types of 7A Loans | SBA