American Express Working Capital Loans Review
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- Date Established
- New York, NY
- No origination fee
- Reasonable terms and fees
- Suited for small businesses
- Only available to American Express customers
- Can only be used for direct vendor payments
You’re probably already familiar with American Express, even if its plastic isn’t currently in your wallet. If not, it’s a financial services company based out of New York City. The company is best known for issuing charge cards. The iconic green, gold, and platinum cards are only a small piece of what the company offers these days, however.
One of American Express’s more unique products, available only to business credit card holders, is its working capital loan. It fills an unusual niche in the short-term loan world, allowing borrowers to defer all payments for the life of the loan, paying it back in full at the end.
Curious how it works? Read on.
Not carrying an Amex business card? Check out our short-term funding comparison chart.
Table of Contents
American Express offers the following loan products:
For more information about its other products, check out our American Express Business Loans review.
These are the preferred prerequisites to qualify for an Amex Working Capital Loan:
|Time In Business:||24 months|
|Personal Credit Score:||N/A (see below)|
|Business Revenue:||$200,000 per year|
You’ll also need to be an American Express business credit card holder. Amex won’t run a new credit check on you when you sign up for a working capital loan; instead, the company uses the information it has on file about you as an Amex customer.
Terms & Fees
Here are the terms for Amex’s Working Capital loans:
Requirement Minimum requirement Borrowing Amount: $1,000 - $750,000 Term Length: 30, 60, or 90 days Fixed Fee: 0.6% - 5.25% of the borrowing amount Origination Fee: None APR: Learn more Collateral: None
Amex’s Working Capital loan loosely resembles a short-term loan, but on closer inspection, it is a pretty unique product. How so?
First of all, the funds from this working capital loan never actually pass through your hands. Rather, you select a vendor you would like to pay with those funds. If you’re approved, Amex will pay that vendor.
With most short-term loans, automated payments — usually daily — would kick in immediately. With an American Express Working Capital loan, while you’re still charged a fixed fee (for example, if you borrow $10,000 at 2.1%, you’ll owe $10,210 — or 10,000 * 0.021), you don’t pay it back in installments. Instead, the full balance is due by the end of your term. Essentially, you’re deferring your payment for one to three months in exchange for a small fee. This can be useful for businesses that need to smooth out their cash flow. Just be aware that you’ll have to link your bank account to Amex’s system to qualify for the loan, and it will be automatically debited in full from your account at the end of the term.
The longer the term length you choose, the higher your fixed fee will be. The base rates are as follows:
- 30 days: 0.6% – 1.75%
- 60 days: 1.2% – 3.5%
- 90 days: 1.8% – 5.25%
Note that you can pay your loan back earlier if you choose without penalty.
To apply for a Working Capital loan, you have to be an American Express Business Card member. You’ll also need to agree to use electronic records and signatures and electronic communication (including email), and link a bank account to your American Express OPEN account. Enrollment in the Working Capital program is not automatic. If you meet the prerequisites, you can enroll one of your businesses in Working Capital Terms through the Amex website. Approval is conditional on the information American Express already has on file about you, including but not limited to your credit history.
To initiate an individual loan after you’re approved, simply select a vendor you’d like to pay. Approval is contingent on your current standing with Amex, the vendor’s eligibility, and the amount of money you’re seeking. Funds are deposited in the vendor’s account within two business days.
Sales & Advertising Transparency
Just about all the information you need is available on Amex’s website, so long as you’re willing to navigate through a page or two and scroll down to the fine print at the bottom of the page. As with the company’s other products, the decision-making process it uses to determine credit limits remains a bit arcane, but that’s a minor gripe.
If you have experience hunting down charge and credit card information on American Express’s site, you won’t be in for any surprises here.
Customer Service & Technical Support
Customer support is available through the FAQ on the company’s website or by phone. If you’re looking at Working Capital loans, chances are you’re already using American Express’s OPEN platform, which you can also use to interact with the company. If you prefer social media, American Express has a presence on Facebook, Twitter, Instagram, LinkedIn, and YouTube.
American Express has a generally positive reputation where customer service is concerned. Most of the Working Capital loan process is automated, so you’ll likely only interact with personnel if something goes wrong.
Negative Reviews & Complaints
American Express has maintained an A+ rating with the BBB. As you might expect of a company of its size, however, there are plenty of criticisms to go around. Here are a few:
- Unclear Terms: Mostly related to Amex’s charge cards, these complaints cited credit limits and fees that went up without notice. This extends a little into its lending with regard to the factors used to determine your eligibility and borrowing amounts.
- Technical Difficulties: A few customers complained about funds being routed to the wrong account or vendor.
- Limited: You can only use these loans to pay vendors directly.
- High Revenue Requirements: Because businesses must make at least $200,000 per year to qualify for Working Capital, some smaller businesses may have a hard time meeting the requirements.
Positive Reviews & Testimonials
Here are some of the nice things customers say about American Express and its loan products:
- Fast: Amex can get your funds to you, or to your vendor, typically within a couple of days.
- Good Customer Service: Most customers found American Express’s customer service to be helpful and knowledgeable.
- Good Rates: For this type of loan, American Express offers excellent rates to prospective borrowers.
- Convenient: Once you’ve signed up for the program, the process is mostly automated, making it easy to use.
American Express Working Capital Loans are a convenient and affordable way for businesses to defer payments to vendors for up to three months. It’s a niche but useful product for Amex’s business card customers who aren’t able to arrange similar terms directly with their vendors. The fairly high revenue requirements for the Working Capital program may exclude some of the businesses who would most benefit from this type of loan, but those that qualify should definitely keep this product in mind.
A few minor points of caution come to mind. If you’re not careful, the lump sum transaction at the end of your term could wreak some havoc on your finances. It’s also not easy to determine in advance whether Amex will approve of your vendor and your loan.
|Lender||Borrowing Amount||Term||Req. Time in Business||Min. Credit Score||Next Steps|
|$5K - $500K||3 - 36 months||x1.003 - x1.04/mo||12 months||600||Apply Now|
|$5K - $500K||13 - 52 weeks||x1.029 - x1.1872||9 months||550||Apply Now|
|$2K - $5M||Varies||As low as 2%||6 months||550||Apply Now|
|$20K - $500K||1 - 4 years||7.99% - 29.99% APR||2 years||660||Apply Now|
To learn more about how we score our reviews, see our Business Loan Rating Criteria.