The Best Cash Flow Loans For Small Businesses In 2023
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Expert Analyst & Reviewer
UPDATED
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Let’s say you have most of the necessary elements in place for a successful business. Unfortunately, cash flow woes can undercut your most well-conceived business plans. In a just world, the best ideas would naturally overcome any temporary obstacles. However, in reality — and particularly in business — cold hard cash makes the world go round. It’s what lets you continue your sales operations, pay your employees on time, manage your operating expenses, and turn a profit.
So, what do you do when cash is running low or not coming in as quickly as you like? One option is to take out a business cash flow loan.
Not sure which type of cash flow loan is right for you or where to find the best lender for a cash flow loan? We’ve got you covered. This article discusses the top cash flow loans for small businesses.
Let’s start by taking a look at this quick comparison chart of cash flow lenders. Read on to learn which cash flow solution is right for you.
Learn More About Our Top Picks
| Company | Summary | Next StepsSummary |
|---|---|---|
 | Best for small- to medium-sized businesses looking for fast funding | Best for small- to medium-sized businesses looking for fast funding |
 | Best for small businesses looking for a short-term loan with weekly repayments | Best for small businesses looking for a short-term loan with weekly repayments |
 | Best for established businesses with good credit looking for installment loans or lines of credit | Best for established businesses with good credit looking for installment loans or lines of credit |
 | Best for small businesses looking for a loan, line of credit, or invoice factoring for consistent cash flow | Best for small businesses looking for a loan, line of credit, or invoice factoring for consistent cash flow |
 | Best for microbusinesses looking for invoice financing or a line of credit to increase cash flow | Best for microbusinesses looking for invoice financing or a line of credit to increase cash flow |
| Show Fewer Options |
Read more below to learn why we chose these options.
Table of Contents
Best Types Of Loans For Cash Flow
There are several types of loans that can be great options for increasing cash flow:
- Installment loans
- Short-term loans
- Lines of credit
- Invoice financing
We’ll go over each type of loan, so you can know exactly what to expect and choose which one fits your business’s needs best.
Installment Loans
Installment loans, also called term loans, are loans in which the borrower receives a lump sum of money that is paid back in regular installments. Interest gets charged throughout the loan’s duration. Many times, you can save money by paying the loan back early (so long as your lender doesn’t charge a prepayment penalty).
Installment loans are paid back in regular installments, usually monthly. Each payment goes to paying a portion of the principal (the borrowed amount) and the interest (a fee based on a percentage of your remaining principal). Most installment loans have term lengths between one and 25 years.
Installment loans can be used for multiple business needs, including short-term cash flow and long-term business growth plans. Common uses for installment loans include:
- Working capital (or everyday expenses)
- Purchasing inventory
- Equipment
- Business expansion
- Business acquisition
- Debt refinancing
Because of the extended term lengths, installment loans are considered higher risk than other types of loans, and young and unstable businesses might have trouble qualifying. These loans are best for established businesses that want a longer period to repay their debt.
Short-Term Loans
A short-term loan is a lump sum of money granted to a borrower and paid back in frequent, regular installments over a short timeframe. Unlike an installment loan, a short-term loan does not have an interest rate. Instead, this type of loan uses a factor rate: a multiplier used to calculate a fixed fee that gets added to your loan. The fixed fee is only calculated once and is repaid along with the principal.
Short-term loans are paid back in regular fixed installments on a weekly, or even daily, basis. For this reason, short-term loans are ideal for businesses with enough cash flow to afford frequent payments. Most short-term loans have term lengths between three and 18 months (with some up to 24 or 36 months).
Short-term loans can be valuable for multiple types of business needs. Common uses for short-term loans include:
- Working capital
- Purchasing inventory
- Purchasing equipment
- Business expansion
- Hiring or training new employees
Short-term loans are considered low risk and are generally known for low borrower requirements, fast funding, and no specific collateral. This type of loan can be ideal for businesses in need of extra cash that have the existing cash flow to make frequent repayments.
Lines Of Credit
Unlike short-term loans and installment loans, lines of credit aren’t lump-sums of money handed to you all at once by a lender. Instead, when you are approved for a line of credit, a lender gives you access to a credit line, which you can draw from at any time, up to the credit limit.
Any draws made on a line of credit are paid in regular installments. Most lines of credit are revolving — as soon as you pay off the amount you used, it gets added back into the total amount available on your credit line. This process means you can keep using the same funds again and again without reapplying for a loan.
Lines of credit are great for short-term, everyday business needs, making them an ideal cash flow solution. Lines of credit can also provide an excellent cash cushion for unexpected expenses and emergencies. Common uses for a line of credit include:
- Working capital
- Payroll
- Overhead costs
- Seasonal expenses
- Purchasing inventory
- Unexpected expenses
Lines of credit are relatively easy to qualify for because such a wide variety of lenders offer them. They are ideal for nearly any type of business in need of a cash flow solution or looking for peace of mind regarding unexpected expenses. The only downside is that if you use up your credit line all at once, you may not have access to the cash you need until you pay some of it back.
Invoice Factoring
Invoice factoring is a cash flow solution in which you sell your unpaid invoices to an invoice factor in exchange for immediate cash. The tradeoff is that the invoice factor keeps a portion of the cash from the invoice on reserve until your customer pays. Once paid, the factor will return that reserve minus a small fee.
Contract lengths and the invoices eligible for factoring vary by lender.
Invoice factoring allows businesses to receive cash faster than they usually would. The money received from invoice factors can be used to meet various business needs:
- Working capital
- Payroll
- Purchasing inventory
Invoice factoring is a great solution for businesses that suffer from slow-paying customers and need immediate cash. You do lose a small portion of your invoice sale to the factor’s fees, but this can be more than worth the cost for many businesses that rely heavily on invoices.
1. OnDeck
OnDeck |
|---|
Best For
Small- to medium-sized businesses looking for fast funding.
Products Offered
- Short-term loans
- Lines of credit
Why We Chose OnDeck
OnDeck, one of the first online lenders, offers fast approval for lines of credit and short-term business loans. Although OnDeck’s fees can get a little pricey, the service is a convenient and quick way for businesses to access up to $500,000. OnDeck is also very transparent about its rates and fees. Eligible OnDeck applicants usually receive funding 24 to 48 hours after their initial application.
In addition to being a good choice for businesses that want fast access to funding, OnDeck is also a good choice for businesses that may not qualify for financing elsewhere. Minimum requirements include a personal credit score of 600, been in business for at least 12 months, and annual revenue of $100,000 or more. OnDeck also works with business owners in over 700 industries, with very few industries excluded from borrowing.
How To Apply For An OnDeck Loan
To apply for OnDeck financing, fill out an application online, and OnDeck will let you know if you’re approved (usually in fewer than 24 hours). You may then need to provide additional documentation before receiving your funding. Typically, the loan can be approved and funded within one to two days.
Takeaway
If you’re looking for quick cash to cover working capital expenses or expand your business, OnDeck could be a great option. While the fees may get a bit pricey, the convenient, quick approval, and low borrower requirements are more than worth it for some small business owners.
2. LoanBuilder
LoanBuilder |
|---|
Best For
Small businesses looking for a short-term loan with weekly repayments.
Products Offered
- Short-term loans
Why We Chose LoanBuilder
Acquired by PayPal in 2017, LoanBuilder is a lending service offering short-term business loans to both PayPal users and non-PayPal users alike. LoanBuilder offers relatively reasonable rates and fees for its loans. Borrowers can “build” loans up to $500,000 with the terms that work best for their situation. These short-term loans can be customized by adjusting the borrowing amount and the duration of the loan.
LoanBuilder also has low borrower requirements for business owners that can’t get a loan from other lenders. Loans may be available to borrowers with low personal credit scores, a short time in business, or low revenues. Borrowers must have: been in business for at least nine months, at least $42,000 in annual revenue, and a minimum credit score of 550 to qualify.
How To Apply For A LoanBuilder Loan
LoanBuilder allows would-be borrowers to investigate their potential loan before applying. You simply enter some basic contact information and use LoanBuilder’s tool to check your eligibility. Then you can finish your application online.
Takeaway
With low borrower requirements and competitive rates, LoanBuilder can be a great option for small businesses looking for a short-term loan. Unlike some short-term loans, LoanBuilder offers weekly repayments instead of daily repayments, which may make this loan more manageable.
3. Fundation
Fundation |
|---|
Best For
Established businesses with good credit looking for installment loans or lines of credit.
Products Offered
- Installment loans
- Lines of credit
Why We Chose Fundation
Founded in 2011, Fundation is an online lender that offers competitive installment loans and lines of credit without the long, complicated process of applying for a bank loan. Fundation also provides strong customer support and has very few negative complaints.
Fundation offers loans of up to $500,000 for cash flow needs or any business purpose. Loans also come with repayment terms up to four years — ideal for borrowers who want to pay their loans back over a longer time. Borrowers also won’t have to worry about making daily or weekly payments. Fundation’s lines of credit are paid back monthly, while loans are repaid twice per month.
How To Apply For A Fundation Loan
The Fundation application process includes filling out an online application, documenting your business’s ID and finances, and speaking with a representative directly to see if you’re a good fit for a Fundation loan. After talking to a rep, your application will go through to underwriting, and you may hear back in as early as 24 hours.
Takeaway
Fundation is a great option for established businesses looking for competitive rates and fees without the long, complicated application process of a bank loan. Because of the more stringent borrower requirements, Fundation is not ideal for startups, but if you do qualify, this financing option is well worth looking into.
4. BlueVine
BlueVine |
|---|
Best For
Small businesses looking for a loan, line of credit, or invoice factoring for consistent cash flow.
Products Offered
- Term loans
- Lines of credit
- Invoice factoring
Why We Chose BlueVine
Founded in 2013 on the idea that small business financing should be easy, BlueVine offers term loans, lines of credit, and invoice factoring. The company is known for revolutionizing the invoice factoring world and helping business owners get quick cash for unpaid invoices. Through its invoice factoring service, businesses could receive as much as $5 million for their outstanding invoices.
With relaxed borrower requirements, BlueVine may be ideal for young businesses. Loans and lines of credit only require six months in business, a personal credit score of 600, and $10,000 in monthly revenue. Invoice factoring has even more relaxed requirements. Businesses with qualifying invoices may be eligible for this service with a personal credit score of 530, $10,000 in monthly revenue, and just three months in business. However, your business must be B2B to qualify for invoice factoring.
How To Apply For A BlueVine Loan
To apply for BlueVine funding, you’ll need to answer a few basic questions about yourself and your business. You’ll then speak with a representative who will ask several additional questions. Typically, you’ll hear back in about 24 hours.
Takeaway
With relaxed borrower requirements and an easy application process, BlueVine can be a great choice for small businesses looking to increase their cash flow with invoice factoring or a line of credit. Be sure to check that your specific state supports BlueVine lines of credit before applying.
5. Fundbox
Fundbox |
|---|
Best For
Microbusinesses looking for invoice financing or a line of credit to increase cash flow.
Products Offered
- Lines of credit
- Invoice financing
Why We Chose Fundbox
Similar to BlueVine, Fundbox is an invoice financing solution created to help small businesses have more consistent cash flow. Since its inception in 2013, Fundbox now offers lines of credit as well.
Fundbox offers relaxed borrower qualifications, making it ideal for less established businesses. To qualify, you must have a credit score of 500 or above, and you must use compatible accounting or invoicing software or a compatible business banking account. Funding is also fast; you can qualify for a line of credit up to $100,000 in just minutes and receive funds in your bank account as quickly as the next business day.
How To Apply For A Fundbox Loan
Fundbox’s application is a bit unique. To apply, you create an account and hook it up to your existing accounting software or bank account. Fundbox then uses that information to determine whether you qualify for a loan. This process is swift, and most applicants will receive a funding decision in minutes.
Takeaway
Fundbox can be a great financing solution for small businesses in need of low borrower qualifications and quick cash. Fundbox’s borrowing amounts may be too small and the rates too steep for larger businesses. But for less established businesses that don’t qualify elsewhere, Fundbox can be a cash flow solution.
Which Cash Flow Loan Is Right For My Business?
With so many great options, it can be hard to know which is right for your business. When choosing a cash flow loan, ask yourself these questions:
- What is the purpose of the loan?
- Which type of loan is best for my business needs?
- What’s my credit score and monthly/yearly revenue?
- How much do I need to borrow? (And especially, how much can I afford to borrow?)
- How quickly do I need the funding?
All of these factors will play a role in deciding which lender you should go after. If you need additional help or want to see even more financing options, check out our comprehensive small business loan reviews.
In Summary: Best Cash Flow Loans For Small Businesses
- OnDeck: Best for small- to medium-sized businesses looking for fast funding
- LoanBuilder: Best for small businesses looking for a short-term loan with weekly repayments
- Fundation: Best for established businesses with good credit looking for installment loans or lines of credit
- BlueVine: Best for small businesses looking for a loan, line of credit, or invoice factoring for consistent cash flow
- Fundbox: Best for microbusinesses looking for invoice financing or a line of credit to increase cash flow
Erica Seppala
Expert Analyst & Reviewer at Merchant Maverick
An expert in accounting, finance, and point of sale, Erica has been researching and writing about all things small-business since 2018. Erica's insights into personal and business finance have been cited in numerous publications, including MSN, Real Simple, and Reader's Digest. She is a graduate of Limestone College.
View Erica Seppala's professional experience on LinkedIn.
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