American Express Working Capital Terms Review: Affordable Accounts Payable Financing

American Express
American Express

American Express Working Capital Terms Review: Affordable Accounts Payable Financing

While Working Capital Terms is only available to select preapproved American Express Business Card members, it's a great and affordable option for financing accounts payable.

Good for

  • High loan amounts.
  • Low fees and rates.
  • Open-ended borrowing structure.

Bad for

  • Non-American Express Business Card members.
  • Low revenue businesses.
  • Long-term financing.

Editor's Rating

4.5/5.0

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If you’re an American Express Business Card member, you may be eligible for Working Capital Terms, which lets you finance your business’s accounts payable. American Express will pay off vendor invoices on your behalf, and you repay American Express at the end of 30 to 90 days. This is an affordable short-term financing program, with effective annual percentage rates (APRs) of 12% and below. You’ll need to be preapproved by American Express to apply for the program.

American Express Working Capital Terms Review: Should You Apply?

American Express
American Express

American Express Working Capital Terms is a worthwhile option for any business owner looking to finance their accounts payable. Through this program, American Express will pay off vendor invoices on your behalf, extending you a line of credit of up to $750,000. Annual percentage rates on this product range from 6% to 12%.

ProsCons
  • High financing amounts up to $750,000.
  • Very low fees and annual percentage rates.
  • Revolving structure allows you to request, pay and re-request funds.
  • Must be preapproved by American Express to apply.
  • Fairly high revenue requirement compared to online lenders.
  • You will make a one-time lump-sum payment at the end of a short-term.

The Pros of American Express Working Capital Terms

American Express Working Capital Terms is essentially accounts payable financing, so it’s only suitable when you need to pay vendor invoices. However, it’s an extremely economical source of short-term financing, with effective APRs of 6% to 12%. Most short-term financing products with terms of 90 days or fewer have APRs equivalent to 20% to 100%. The reason the effective APRs are low is that American Express charges a one-time fee for the loan, instead of a daily, weekly, or monthly fee. For example, if you select a 30-day term, the working capital fee for the loan will be between 0.5% and 1.0% of the loan amount. So, if you request $100,000, American Express will only charge between $500 and $1,000 in fees for the loan.

The program offers high financing amounts and a revolving borrowing structure. American Express will provide you with an “Open to Borrow” amount, which is the amount of available credit you have. It works similarly to a line of credit, as you can repeatedly request funds from your account, provided you don’t exceed the limit you’ve been approved for—up to a maximum of $750,000. While some accounts payable financing companies may provide higher financing amounts, most rates are not comparable to those offered by American Express.

The Cons of American Express Working Capital Terms

You’ll be required to repay the loan as a lump sum at the end of the short term because of how this type of financing works. You won’t make fixed payments over a longer period of time, which means that this type of financing may be more difficult to budget for. For instance, if you finance $200,000 through this program with a 90-day term, you'll repay this amount plus the financing fee—which would amount to $203,000 to $206,000—as a lump sum after 90 days.

Aside from the repayment structure, small business owners should also consider whether they can receive financing from their vendor directly. Many vendors offer in-house financing solutions—or trade credit—that may provide more attractive terms than what American Express offers—either through lower rates, discounts on bulk purchases or for early payment, or longer terms. In addition, most vendors offer what are known as “Net 30 Accounts,” which allow you to defer payment on a purchase for 30 days. Some vendors may even extend these terms up to 90 or 120 days. These accounts are generally interest-free.

Finally, this program is only open to American Business Card Members who have been preapproved for an offer. Eligibility requires you to have held an American Express Business Card for at least a year and be active on the card. Your business will also need to demonstrate at least $200,000 in annual revenue.

Final Thoughts

For short-term accounts payable financing, American Express Working Capital Terms has some of the best rates and terms we’ve seen. The effective APRs on this product are close to what you can expect from a traditional long-term bank loan, and you may be approved for up to $750,000 in funding. However, the one-time lump-sum repayment after 30 to 90 days may be difficult for business owners to budget for, and the program is only open to certain preapproved American Express Business Card members.

Eligibility Criteria

American Express Working Capital Terms is only available to American Express Business Card Members who have been preapproved. In order to be eligible for the program, you'll need to meet the criteria listed below:

  • Minimum annual revenue: $200,000
  • Must be preapproved by American Express to apply.
  • At least one year tenure with an American Express Business Card.
  • Current on American Express Business Card.

Features, Rates and Terms

American Express will pay off vendor invoices on your behalf, providing funding of up to $750,000 with a one-time repayment due at the end of 30, 60, or 90 days.

Financing Amount Range$1,000 - $750,000
APR Range6.00% - 12.00%
FeesWorking capital fee: 0.5-1.0% (30 days), 1.0-2.0% (60 days), 1.5-3.0% (90 days)
Financing Terms30, 60 or 90 days
Repayment OptionsOne-time payment at end of term
Collateral RequiredNo
Personal Guarantee RequiredYes

Application Process

To check your eligibility for Working Capital Terms, you'll need to login into your American Express online account. American Express will determine your eligibility based on your financial profile and your relationship with American Express and other financial institutions. If you’ve been preapproved, you can enroll from your online account in a few minutes. No credit check or collateral is required to enroll in Working Capital Terms.

Screenshot showing login page for American Express Online Account
American Express Working Capital Terms Enrollment

Once you've enrolled, you'll have access to the Working Capital Terms dashboard. You need to add information for a bank account that will be used to repay the funds borrowed. After adding your bank account information, you can add business and ACH (Automated Clearing Housing) bank account information for each vendor you would like American Express to pay on your behalf. Once you have added this information, you can then request funds to pay vendors. American Express will pay your vendors by ACH within two business days. The payment will be deposited into the vendor’s bank account with your business’s name and invoice or account number. At the end of the term, American Express will automatically debit your bank account for the funded amount plus the working capital fee.

The funding amount you can request for each invoice is based on the amount American Express approved you for. American Express will provide an “Open to Borrow” amount on the dashboard, which reflects how much credit you have available.

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