Business Lending FAQ’s
What is a Working Capital Loan for a Business?
A Working Capital Loan is a loan that is used to help infuse cash into a company for everyday operations. This type of business loan can be tied to a business owner’s Personal Credit Score, so if you miss any payments or default on this loan, it may hurt your credit score. Working Capital loans should be used to help with short-term operational needs.
Working capital loan is a term used in commercial banking to describe a loan that allows a business to maintain liquidity and access to working capital. Working capital refers to the cash and assets that a business can use to meet short-term financial obligations.
A working capital loan can be used to cover short-term needs such as inventory purchases, payroll, and vendor payments. The loan can also be used to cover long-term needs such as the purchase of equipment or the expansion of a business.
Working capital loans are typically offered in amounts ranging from $25,000 to $1 million. The interest rate on a working capital loan typically ranges from 8 to 10% and higher.
