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The Best Cash Flow Loans For Small Businesses In 2020

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Best Cash Flow Loans For Small Businesses

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

CompanySummaryNext Steps
Best for small- to medium-sized businesses looking for fast funding

Get Started

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Best for small businesses looking for a short-term loan with weekly repayments

Compare

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Best for established businesses with good credit looking for installment loans or lines of credit

Visit Site

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Best for small businesses looking for a loan, line of credit, or invoice factoring for consistent cash flow

Get Started

Read More

Best for microbusinesses looking for invoice financing or a line of credit to increase cash flow

Visit Site

Read More

Other Featured Options:

  • StreetShares: Best for small- to medium-sized businesses looking for a working capital loan or line of credit

Read more below to learn why we chose these options.

Best Types Of Loans For Cash Flow

online loan companies

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.

Jump back to comparison chart

1. OnDeck

OnDeck



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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.

Get Started with OnDeck

Read our in-depth review

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2. LoanBuilder

LoanBuilder



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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.

Read our in-depth review

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3. Fundation

Fundation



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Read our Review

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.

Get Started with Fundation

Read our in-depth review

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4. BlueVine

BlueVine



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Read our Review

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.

Get Started with BlueVine

Read our in-depth review

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5. Fundbox

Fundbox



Visit Site

Read our Review

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.

Get Started with Fundbox

Read our in-depth review

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6. StreetShares

StreetShares



Compare

Read our Review

Best For

Small- to medium-sized businesses looking for a working capital loan or line of credit.

Products Offered

  • Installment loans (or term loans)
  • Lines of credit

Why We Chose StreetShares

Founded in 2013, StreetShares is a peer-to-peer (P2P) lender created by veterans for veterans, although currently, any eligible merchant can access funding. This lender offers installment loans and lines of credit. Until recently, StreetShares had offered contract financing (similar to invoice factoring), but the company has discontinued this product. StreetShares boasts no prepayment penalties, an easy application process, and excellent customer service.

For its lines of credit and installment loans, you can receive up to $250,000 to use for working capital. StreetShares offers competitive rates and its Best Price Guarantee to ensure you get the lowest rates. Fixed weekly payments on all products make it easy to repay StreetShares.

How To Apply For A StreetShares Loan

To apply for funding from StreetShares, you’ll need to fill out an initial questionnaire. If approved, you’ll be asked to provide additional information and then StreetShares will come back with an offer (or offers). The whole process takes between two and seven days on average.

Takeaway

StreetShares offers competitive installment loans and lines of credit to eligible small and medium businesses. If you have fair credit and a need for additional cash flow, StreetShares is a great business financing option.

Read our in-depth review

Jump back to comparison chart

Which Cash Flow Loan Is Right For My Business?

What Information to Bring Accountant for Small Business Taxes

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:

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.

A Last Look At Our Top Picks

  1. OnDeck
    Summary - Best for small- to medium-sized businesses looking for fast funding
  2. LoanBuilder
    Summary - Best for small businesses looking for a short-term loan with weekly repayments
  3. Fundation
    Summary - Best for established businesses with good credit looking for installment loans or lines of credit
  4. BlueVine
    Summary - Best for small businesses looking for a loan, line of credit, or invoice factoring for consistent cash flow
  5. Fundbox
    Summary - Best for microbusinesses looking for invoice financing or a line of credit to increase cash flow
  6. StreetShares
    Summary - Best for small- to medium-sized businesses looking for a working capital loan or line of credit
Erica Seppala

Erica Seppala

Erica is a writer based in Greenville, South Carolina. She is a graduate of Limestone College. Initially determined to be an accountant, she put away the calculator and picked up a laptop to pursue her dream of being a writer. Erica has spent the past 10 years writing blogs and articles for hundreds of private clients, and she loves sharing her love of research and the written word with everyone around her.
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