Working capital loans have a variety of benefits— including the fact that they don’t require small business owners to sacrifice any of their valuable equity just to keep their business running. Benefits of working capital loans include:

• Pay expenses
• Pay debt
• Take advantage of business opportunities
• Invest money ahead of seasonal changes
• Increase business health with cash on hand

Businesses of all sizes can benefit from a working capital loan. Small businesses may need more working capital to operate, pay bills, or even to secure affordable financing. If your small business is growing, you may need more working capital to help you achieve your goals, like hiring more employees, securing more contracts, marketing your product, or increasing your inventory. The SBA 7(a) loan is a popular option for businesses looking for working capital, as it offers competitive interest rates and flexible repayment terms.

The SBA 7(a) loan is a great option for businesses looking for working capital, as it offers competitive interest rates and flexible repayment terms. Additionally, the SBA CAPlines program is specifically designed as a revolving line of credit for businesses with a cyclical sales cycle, and permits borrowers to use unpaid client invoices as a form of collateral.

In order to qualify for an SBA 7(a) loan for working capital, you’ll need:

• A credit score of at least 690
• A record free of any bankruptcies in the past three years
• At least a 10% down payment
• For franchisees, a paid franchise fee before the loan funds are released
• A clean criminal history, or the ability to explain any misdemeanors on your record
• No current Federal debt

In addition, the business that will benefit from the loan will generally need to be:

• A for-profit entity
• A small business
• Based in the United States
• A business with invested equity
• A business that has exhausted its other financing options

These requirements ensure that the loan is eligible for SBA backing. If the loan is ineligible, you’ll need to seek other forms of small business financing.

The SBA 7(a) is the administration’s flagship term loan program for working capital. However, the SBA also offers specialized loan programs for certain circumstances. Some loan programs small businesses that need working capital might qualify for include:

• CAPLines – A revolving line of credit for financing seasonal or short-term needs. CAPLine loans that will be used for working capital require the borrower to show that their business generates accounts receivable and/or has inventory already.
• International Trade – For businesses that need funds to export internationally. This program offers up to a $4 million guarantee for working capital
• Export Working Capital – provides additional funding to increase domestic export sales without disrupting your business plan. This program allows for advances of up to $5 million to fund export transactions. These loans require that the business has been established for at least 12 months, and that the Export Management Company or Export Trading Company will take the title to the goods or services being exported, and the EMC or ETC has no bank ownership.
• Microloans – SBA-backed loans up to $50,000

The Export Working Capital and Export Express programs are two loan programs that provide additional funding to increase domestic export sales. The Export Working Capital program allows for advances of up to $5 million to fund export transactions, while the Export Express program gives exporters and lenders a more efficient way to get financing backed by the SBA for loans and lines of credit of up to $500,000.

The SBA also offers Microloans of up to $50,000 for businesses that need funds for working capital.

StreetShares offers working capital financing with a speedy turnaround time; loans can be approved and funded in as little as a few days. LoanBuilder, which is a service provided by PayPal, also offers working capital financing with approval and funding times of as little as a few days.