What are Cash Flow Loans?
Cash flow loans are flexible financing options where approval and terms are primarily based on your business's revenue and cash flow rather than traditional credit metrics alone. Also known as revenue-based financing or merchant cash advances, these products are ideal for businesses with strong sales but limited collateral or credit history.
Best For
- Businesses with high revenue but limited credit history
- Seasonal businesses with fluctuating income
- Retail and e-commerce companies with consistent sales
- Restaurants and hospitality businesses
- Companies needing fast access to capital
- Businesses unable to provide traditional collateral
Who Qualifies?
- Minimum $100K-$250K in annual revenue
- At least 3-6 months in business
- Credit score of 550+ (some programs accept lower)
- Consistent daily credit card or ACH transactions
- No active bankruptcies
How Repayment Works
Percentage of Daily Sales: Many cash flow loans are repaid through a fixed percentage of your daily credit card sales or bank deposits. When sales are strong, you pay more. When sales are slow, you pay less.
Fixed Daily/Weekly Payments: Some lenders offer fixed payment schedules based on projected cash flow, giving you more predictable budgeting.
Automatic Collection: Payments are typically collected automatically from your merchant account or bank account, requiring no manual payment processing.
Benefits
- Fast Approval: Decisions in 24-48 hours based primarily on revenue, not extensive documentation
- Flexible Repayment: Payments adjust with your sales volume
- Minimal Documentation: Bank statements and processing statements often sufficient
- No Collateral Required: Unsecured financing based on cash flow
- Bad Credit Accepted: Revenue matters more than credit score
Typical Rates & Terms
Factor Rates: 1.10-1.50 (meaning you repay $1.10-$1.50 for every $1.00 borrowed)
APR Equivalent: 15-80% depending on term length and repayment speed
Terms: 3-18 months typical
Funding Speed: 1-3 business days after approval
Fees: Typically built into factor rate (no separate origination fees)
*Rates are higher than traditional loans due to increased risk and shorter terms. Best for short-term needs with quick ROI.