Working capital loans cost a business in two ways.
First, to obtain a working capital loan the business may be required to pay an origination fee to the lender in addition to interest or other fees.
Second, a working capital loan will typically have an interest rate ranging from 6% - 39% or factor rates between 1.19 - 1.35. The rate can vary depending on the type of working capital loan, the borrower’s credit rating and other factors.
