Best Cash Flow Loans for Small Businesses

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By some estimates, as many as 40% of all small businesses have faced challenges with managing their cash flow. When money is tight, many business owners look for credit and financing to cover the gaps. We take a look at some top cash flow loans and lines of credit on the market as well as solutions to common cash flow issues.

Business Term Loans

Term loans can be a great source of financing to cover cash flow gaps. If you need funds rather quickly or can’t qualify for traditional financing, you should consider an online lender as most can get you money within a week and have fewer eligibility requirements than a bank. However, we still recommend approaching your bank about a loan or line of credit as they may be able to work with you on a tight schedule. In fact, some banks, like Wells Fargo and Bank of America, now offer online business loans and lines of credit with quick turnaround times.

Wells FargoBank of AmericaOnDeck (Read Review)Funding Circle (Read Review)LendingClub (Read Review)Credibly (Read Review)
Best for...
  • Wells Fargo banking customers
  • Unsecured loans
  • Bank of America customers
  • Unsecured loans
  • Quick funding
  • Lower credit scores
  • Large term loans
  • Good credit scores
  • Unsecured loans (under $100k)
  • Good credit scores
  • Lower credit scores
  • Unsecured loans
Loan Details
  • $10,000 - $100,000
  • 6.50% - 22.99% APRs
  • Terms of 1 to 5 years
  • Weekly or monthly repayment
  • $10,000 - $100,000
  • Rates starting at 4.75%
  • Terms of 1 to 5 years
  • Monthly repayment
  • $5,000 - $500,000
  • 9.30% - 99.70% APRs
  • Terms of 3 - 36 months
  • Daily or weekly repayment
  • $25,000 - $500,000
  • 7.35% - 33.00% APRs
  • Terms of 6 - 60 months
  • Monthly repayment
  • $5,000 - $300,000
  • 9.77% - 35.98% APRs
  • Terms of 1 - 5 years
  • Monthly repayment
  • $5,000 - $400,000
  • 1.15x - 1.49x APRs
  • Terms of 6 - 17 months
  • Daily or weekly repayment
Min. Criteria to Qualify
  • Must have Wells Fargo checking or savings account open for at least 1 year
  • $100,000 in annual revenue
  • 2 years in business under existing ownership
  • Minimum personal credit score: 600
  • Minimum annual revenue: $100,000
  • Minimum time in business: 1 year
  • Minimum personal credit score: 620
  • Minimum time in business: 2 years
  • At least 2 years of profitability
  • Minimum personal credit score: 620
  • Minimum annual revenue: $75,000
  • Minimum time in business: 2 years
  • Borrower owns at least 20% of business
  • No recent bankruptcies or tax liens
  • Minimum personal credit score: 500
  • Minimum monthly revenue: $10,000
  • Minimum time in business: 6 months
  • At least $15,000 in monthly deposits in the past three months
  • Average daily bank account balance greater than $1,000
Funds in as Fast asNext business day5 business daysAs fast as 24 hours day(s)10 business days day(s)7+ business days day(s)As fast as 48 hours day(s)
Apply NowApply at Wells FargoApply at Bank of AmericaApply at OnDeckApply at Funding CircleApply at Lending ClubApply at Credibly

Lines of Credit

If you have ongoing cash needs or are heading into busy season, a line of credit is another useful tool in managing your cash flow. Credit lines are available from banks, including SBA lines of credit, and online lenders, such as OnDeck and LendingClub. Some payment processors even offer lines of credit that use a cut of your business’s daily credit card transactions as repayment. A major advantage to a line of credit is that it’s easy to get an unsecured line, so you won’t need to jump through hoops to put up collateral.

Wells FargoBank of AmericaOnDeck (Read Review)Kabbage (Read Review)StreetShares (Read Review)
Best for...
  • Wells Fargo banking customers
  • Newer businesses
  • Bank of America customers
  • Unsecured lines
  • Quick funding
  • Lower credit scores
  • Lower credit scores
  • Lower revenue businesses
  • Small, growing businesses
  • Veteran-owned businesses
Loan Details
  • $5,000 - $100,000
  • Rates starting at 5.25% to 6%
  • Revolving credit line
  • Monthly repayment
  • $10,000 - $100,000
  • Rates starting at 5.75%
  • Revolving with annual renewal
  • Monthly repayment
  • $6,000 - $100,000
  • 13.99% - 39.90% APRs
  • Terms of 6 months
  • Weekly
  • $2,000 - $250,000
  • 20.00% - 80.00% APRs
  • Terms of 6 or 12 months
  • Monthly
  • $5,000 - $200,000
  • 8.00% - 39.99% APRs
  • Terms of 3 - 36 months
  • Weekly
Min. Criteria to Qualify
  • Must have Wells Fargo checking or savings account open for at least 1 year
  • Businesses under 2 years old eligible
  • $100,000 in annual revenue
  • 2 years in business under existing ownership
  • Minimum personal credit score: 600
  • Minimum annual revenue: $100,000
  • Minimum time in business: 1 year
  • Minimum annual revenue: $50,000 ($500,000 for lines up to $150,000)
  • Minimum time in business: 1 year (3 years for lines up to $150,000)
  • Minimum personal credit score: 620
  • Minimum annual revenue: $50,000
  • Minimum time in business: 1 year
  • Must be incorporated or LLC (sole proprietorships allowed in some states)
Funds in as Fast as10 business days10 business daysAs fast as 24 hours day(s)As fast as same day day(s)As fast as same day day(s)
Apply NowApply at Wells FargoApply at Bank of AmericaApply at OnDeckApply at KabbageApply at StreetShares

One thing to be cautious of is fees. Many credit lines might have annual fees (in some cases, these fees can be waived) and fees for certain types of transactions, such as cash advances from ATMs. You’ll also want to consider how often you need to repay on the credit line, as some online lenders will require repayment more frequently than once a month.

Financing Unpaid Invoices

If your cash flow gaps are caused by waiting for customers to pay invoices, you may want to consider invoice factoring as an option. Invoice factoring allows you to get an advance on your invoice, typically up to 80% to 90%, and receive the remaining 10% to 20% (less fees from the factoring company) when your customer pays. In most cases, invoice factoring companies will charge a weekly fee between 0.5% to 1.0% of the invoice amount.

BlueVine (Read Review)Fundbox (Read Review)
Best for...
  • Advancing large invoices
  • Keeping customer communications in house
  • Newer or smaller businesses
  • Keeping customer communications in house
Loan Details
  • $20,000 - $5 million
  • 15.00% - 68.00% APRs
  • Terms of Up to 90 days
  • Weekly
  • $100 - $100,000
  • 13.00% - 60.00% APRs
  • Terms of 12 or 24 weeks
  • Weekly repayment
Min. Criteria to Qualify
  • Minimum personal credit score: 530
  • Minimum annual revenue: $100,000
  • Minimum time in business: 3 months
  • Business must be based in the U.S.
  • Business must have B2B invoices with clients who process at least $10 million in annual revenue
  • Billing must be in arrears
  • Minimum time in business: 3 months
  • Must use eligible online accounting service
  • No bankruptcies in last 2 years
Apply NowApply at BlueVineApply at Fundbox

How to Deal With Cash Flow Issues

While getting credit can be a great temporary stopgap, you should work to identify the root cause of your cash flow problem and fix it. Here are some solutions to common cash flow issues:

Incentivize customers to pay earlier. Most businesses offer 30 to 60 day payment terms to their clients (which is standard), but many businesses cannot afford to wait that long to get paid. One solution to this issue is to offer a small discount, usually 2% to 3% of the invoice, for customers who pay early. Another practical solution is letting your customers pay online or enroll in automatic payment. You’ll need to negotiate these discounts and terms directly with each client.

Set up a process for dealing with bad debts. Bad debt is any amount owed by your customer that hasn’t been recovered by you. To combat this problem, you should have a process in place to deal with past due receivables, which means having late payment penalties or a collections policy and sending follow-ups to customers who are past due. You should also consider conducting a credit check on new customers before extending them credit. If a customer has poor credit, you could require an initial deposit upfront, which will offset the chances that you’ll go entirely unpaid for your work.

Get your accounting in order. If you aren’t on top of your books, it will be nearly impossible to identify and fix any cash flow issues. Online or desktop accounting software, like Quickbooks or Xero, can help you create current cash flow statements and projections to help you get a handle on your current and future income and expenses. Good accounting will also keep you on top of your unpaid invoices and bad debts so you can collect the money you’re owed.

Reduce expenses where possible. With your accounting in order, you should investigate where you can cut unnecessary expenses. You could reduce paper usage to cut down on printing costs or switch to a lower cost vendor for services such as insurance or credit card processing. Just be careful not to cut costs where they matter as this could be harmful to your business in the long run.

Get credit before you need it. For businesses with regular busy seasons, consider getting a loan or line of credit before you need to start preparing for the season. Many times, your cash flow may be the tightest right before busy season when you need to purchase a lot of inventory, but aren’t yet making the sales to cover the costs. Getting financing before you need to ramp up for busy season can give you a much needed cash injection to fix this problem.

Fix your gross margins. If your margins aren’t high enough on your products and services, you’ll suffer ongoing cash flow problems until you can increase them. You’ll need to audit all of your products to determine the overall cost of producing them. Once you’ve identified the true cost, look into raising your prices to increase your margins. If you can’t raise prices and remain competitive, reevaluate whether the products are worth selling.

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