Working Capital Loan Requirements: What You Need to Know

As you probably know, banks proudly advertise that they offer working capital loans. In fact, walk into any branch and you’ll find posters, brochures and other happy things that focus on “supporting businesses” and “offering a helping hand”.

However, when you go behind the marketing hype and finally learn about bank working capital loan requirements, the story changes – and it’s not full of support and helping hands! Rather, it’s full of staggeringly, unrealistic requirements; all of which are designed to help banks AVOID approving working capital loans to any applicant who they perceive as risky or unprofitable.

Specifically, here are the requirements you’ll be expected to meet if you apply for a working capital loan from your bank:

Extremely good credit

Have a few dents on your business or personal credit score? Expect banks to likely hit the alarm bell – especially if you’re a small or mid-sized business.

2+ Years of Credit History

In the real world, businesses launch each day and it only takes a few months for a business to start putting down roots and needing more working capital. But in the “bank world”, businesses are often seen as risky, scary startups for at least the first two years of existence; though in some cases longer. As such, if you don’t have at least two candles on your business’s birthday cake, it may be difficult to get approval through your bank.

Ample Collateral

All bank working capital loans are secured by collateral – and there is no way around this.

What’s more, bank are known for undervaluing your collateral by anywhere from 25-50 percent.

Working Capital Loan Requirements that MAKE SENSE!

At Mulligan Funding, we have working capital loan requirements, too — except ours are often more attainable. We don’t demand perfect or even good credit, we only need to see 3 months of cash flow numbers, and we don’t require collateral of any kind.

Learn More

Call Mulligan Funding at 855-326-3564 to discuss your financing options today!

The information shared is intended to be used for informational purposes only and you should independently research and verify.

Note: Prior to January 23, 2020, Mulligan Funding operated solely as a direct lender, originating all of its own loans and Merchant Cash Advance contracts. From that date onwards, the majority of funding offered by Mulligan Funding will be by Loans originated by FinWise Bank, a Utah-chartered Bank, pursuant to a Loan Program conducted jointly by Mulligan Funding and FinWise Bank.