4 Common Questions Around Working Capital Loans

What is working capital?
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We’re continuing our mini-series about working capital loans today. Please hold your applause until the end.

Yesterday, we talked a little bit about three common myths about working capital loans. We’re moving out of the realm of wildly misleading beliefs and right into the most common questions our customers ask us about working capital loans*. And no, one of them is not “what is working capital?”

Again, working capital loans are unsecured business loans that can be used for a variety of purposes—anything from minor equipment to billboard advertising—and don’t take nearly as long to nail down as a bank loan. In case you haven’t had the pleasant experience of dealing with a bank’s loan process, it’s akin to having your teeth pulled by a snail on Quaaludes.

Once again, these questions were supplied by Direct Capital Director of Client Services Scott Lynch, who knows about as much about working capital loans as any man alive. Let’s jump right in to the knowledge.

The Four Questions

  • How long is the term? The terms are variable according to how much money you’re looking for, factors like your credit history and how long you’d like it to be. Generally speaking, working capital loans go from six months to 18 months.
  • What is the likelihood of approval? An excellent question. Again, it depends on factors such as your credit history, strength of sales and other factors. A finance manager at Direct Capital can work with you to get a more concrete answer, but a quick rule of thumb: A lower credit score does not necessarily preclude you from obtaining a loan.
  • How quickly can we get the money? Fast. Barring major snags—say your credit score, improbably, is -180—Direct Capital can get you a loan within a week. The paperwork’s pretty easy, too.
  • How much can I qualify for? Working capital loans through our company go up to about $150,000, so it can cover a wide range of needs for your small business.

If you have other questions that aren’t covered here or want answers specific to your business, give us a call today. You’ll be glad you did.

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*Working capital not available in the following states: AK, DE, ND, VT