Cash Flow Loan

A cash flow loan, also known as a working capital loan, is a type of financing in which a bank or financial institution lends funds based on future cash flow. The future cash flow generated by the borrower is then used as collateral for the loan. Cash flow loans are typically used to cover operating and day-to-day expenses.

Because approval for cash flow loans is largely based on your future cash flows rather than on more traditional factors such as credit history or time in business, these loans are typically easier to qualify for. However, this ease of approval can also come with high interest fees and rigid terms.