10 Questions to Ask When Applying for a Working Capital Loan

Jun 09, 2021
When you are in need of a working capital loan for your small business, there are many options in the diverse lending industry.  Choosing the right solution to fit your business standards is important and so is asking the right questions. It can save you tons of money and time – as well as a headache.

Good questions make all the difference when it comes to looking for a short-term business working capital loan. Let’s start with some questions you should ask yourself before you begin.

1. How much funding do I need?

When getting a working capital loan, the max loan amount is usually around $150,000 with Express Capital. Some other lenders will go up to $200,000. It is important to look at the reality of how much you need and the purpose of the loan.

Borrowing too much or not enough can hurt your business. Make sure to get a consultation from the lender before you move forward. Express Capital will talk about your business before selling you on a loan and rates to help you determine the loan amount that works best for your needs.


2. How quickly do I need the funds?

If you are in a bind and need money quick, perhaps an SBA loan or a traditional bank loan is not the way to go. Their processes can take weeks before you see any money. Most lenders or brokers can take up to 2-3 days.

Find a lender that can give you the funds the same day. However, these types of loans can require you to give them a piece of your business or collateral to even get a loan.

Express Capital offers a simple and cost effective working capital loans with same day funding. Collateral is not needed so you keep your business assets to yourself.  

3. What exactly am I going to use the funding for?

Most lenders will ask this question upfront, so knowing which part of your business needs financing will better help you and the lender find the best solution. Some lenders give specific guidelines as to what you can use the money for, but at Express Capital, you use can use the funding for any working capital with one stipulation – that it will help grow your business. 

4. Do I know what my lender expects of me?

Small businesses do not spend enough time with this question. Every lender has different requirements. You might find that a traditional bank wants a business plan, bank statements and excellent credit.

Other lenders may require your business to earn a specific amount of monthly revenue tied to the length of time you have been in business. Other factors, such as the purpose of the loan funds, payroll, invoices or business expansion which will determine what a lender will require from you.

Here is a list of possible things a lender may ask from you:

  • Credit score
  • Tax Records
  • Bank Statements
  • Business Plan
  • Annual Revenue
  • Time in Business
  • Invoice History
  • Personal Guarantee
  • Collateral

Express Capital only requires that you are the owner of your business and have been in business for at least 1 year, as well as bank statements and filling out the short application. With that information, a representative will contact you and determine if the loan is a good fit or not. Simple process, no hassles.


5. What type of lender are you?

This could be the most important question of all. If you are dealing with a broker, most will shop your credit and find a loan that is in their best interests, not necessarily yours.

Choosing a direct lender like Express Capital is a smart way to go. A direct lender will allow you to cut out the middleman charging exorbitant fees. It will also help maintain your credit score, as a direct lender will report your payments to the credit bureaus, Experian, Equifax and TransUnion.

This can only help increase your credit score and borrowing limit through the lender – if payments are made on time.


6. What is the likelihood of approval?

Ever tried to get a loan from a bank? It can take too long, due to the amount of required paperwork and approvals that never seem to be issued.

To qualify for a loan at Express Capital, your business should be US-based, have 1+ years’ time in business and $95,000+ in annual revenue. The approval process is quick and simple, with funding often granted in the same business day.


7. What are the loan's specifics?

As a contractor, it’s important to determine how long you will need the funds. Most contractors need short-term funding to bridge a gap between jobs or to draw a check. Unfortunately, most lenders are not designed for short-term financing.

At Express Capital, we offer 1-12 month term loans. Most customers utilize the funding for 2-3 months. Our loans are also fee-based, so there is no compounding interest. If you need a custom funding solution, we can handle that too – structuring something specifically for you.

All that is requested from Expres Capital is the last 3-6 months of complete business bank statements and the credit application. 

8. Will you be looking at my personal or business credit report?

Yes. Express Capital has a unique way of seeing if a business qualifies for a working capital loan. All we need are complete business bank statements from the last 3-6 months, as well as the credit application. In these difficult times, we know that many good, hardworking people can have bad credit. We evaluate every application on its own merits. We listen to your story and see how we might help you and your business succeed.


9. How fast can I pay off the loan?

Paying off a loan early should be rewarded. Watch out for lenders who penalize early payoffs. Instead, find a lender who will reward you or incentivize you for doing so.

Express Capital has no penalties; we are aware of the needs of your business. You can pay your loan off early at any time.


10. What fees are included in the loan?

Some companies who claim there are no fees suddenly surprise you with a charge at the beginning of the loan process. Make sure you truly do not have any hidden fees before going forward with a loan.

There are direct lenders who include the fee within the interest rate, like Express Capital. By securing the actual price, it will be easier to make your decision on the best lender for your business.


Choose the right business lender

Asking the right questions can help streamline the process of choosing the right lender and ensure that you will flourish from your business working capital loan. To get the right solution for you, contact a specialist to help you determine your financing options. We will discuss the programs that suite your unique business.


At Express Capital we are a direct lender. We specialize in funding for small businesses and offer short-term working capital loans. Approvals are fast and funds are deposited the same day. Get funded today!


Recommended resources

How to Qualify for Working Capital Business Loans

Express Capital vs Traditional Lenders: A Comparison

4 Qualities of the Best Business Lenders



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