The short answer
What working capital actually means
Working capital is the cash a business has available to run itself between paying bills and collecting revenue. When a restaurant buys a month of food on Monday but earns that money back over four weeks, or a contractor pays a crew before the client pays the invoice, the gap has to be filled from somewhere.
A working capital loan fills that gap with a lump sum. It is not meant for buying a building or a 15-year machine. It is meant for the costs that come back around every week or month.
Common uses include:
- Payroll during a slow stretch or ahead of a busy season
- Bulk inventory bought at a discount
- Covering rent and utilities while a large receivable is outstanding
- Hiring and training before a new contract starts
Who it fits, and who it does not
It tends to fit an established business with steady deposits, a clear reason for the money and a plan to repay it from normal revenue. MFE's published planning guidelines for this product point to roughly $17,500 a month in revenue, 6+ months in business and credit commonly in the 600+ range.
It tends not to fit a business that is losing money every month with no change in sight, since a loan adds a payment to a problem that is already there. It is also a poor match for buying equipment that lasts many years; equipment financing usually spreads that cost more sensibly. Newer businesses with thinner credit may find a merchant cash advance more reachable, though usually at a higher cost.
Check what your business qualifies for
Merchant Fund Express reviews working capital loans requests from $5,000 to $5,000,000. Scores from 500 are considered, and same-day decisions are common on complete files.
Check funding options with Merchant Fund ExpressHow repayment works
You agree on an amount, a term and a payment schedule before funds are sent. The payment is usually fixed, which makes it easy to put on a calendar. Some agreements debit weekly; others monthly. A fee may be taken from the proceeds at funding, which means the cash that lands in your account can be smaller than the loan amount.
Three numbers matter more than the headline rate:
- Net cash received after any fees
- The payment and how often it comes out
- Total repayment over the full term
Compare offers on those three figures side by side. A lower payment over a longer term can still cost more in total.
Worked example: a 12-month loan
Illustrative example. These figures are illustrations built on stated assumptions, not offers. Real pricing depends on the file MFE reviews.
Assumptions: a landscaping supply yard with about $55,000 in monthly deposits borrows $60,000 for spring inventory. The term is 12 months with 52 weekly payments. A 3% fee is taken at funding, and total repayment is assumed at $72,000.
| Item | Amount |
|---|---|
| Loan amount | $60,000 |
| Fee at funding (3%) | $1,800 |
| Net cash received | $58,200 |
| Total repayment | $72,000 |
| Weekly payment ($72,000 / 52) | $1,384.62 |
| Total cost (repayment minus net cash) | $13,800 |
The weekly payment works out to about $6,000 a month, a little under 11% of deposits. That leaves room for a slower week. If the same payment were 25% of deposits, the plan would be much tighter.
Funding brings customers. Is your website ready for them?
Working capital often pays for the inventory or staff that a busy season needs, and that season only pays off if customers can find you and see you are open. Make sure your hours, services and contact form are current before the rush. Cheap Cheap Websites builds professional sites from $399, with Website Care at $30/month to keep them updated.
What to prepare before you apply
A complete file is the fastest file. For most requests MFE asks for:
- 3 to 4 months of business bank statements
- A government-issued ID for the owner
- A voided business check
- A short application
Larger requests can also need financial statements or tax returns. Same-day decisions are common on complete files, and funding often follows the next business day, though timing is never promised. You can start on the MFE working capital loans page.
When waiting or another option is better
Hold off if the money would only cover last month's losses without a fix for next month. Consider a business line of credit if your need comes and goes, because you only pay for what you draw. If customers owe you on 30 to 90 day invoices, factoring may turn those invoices into cash without adding a fixed loan payment.
And if your bank already offers a lower-cost loan and you can wait the extra weeks, that can be the cheaper route. Speed is worth paying for only when the timing truly matters.
Related funding guides
Cheap Cheap Websites builds websites. It does not lend or make funding decisions. Funding is offered by our funding partner, Merchant Fund Express, and every request is subject to its review and approval. Figures on this page are illustrations, not offers. Updated October 15, 2026.