Headway Capital

4/5 stars

Headway Capital allows businesses to draw funds as needed with no lump-sum requirement, perfect for ongoing or unexpected expenses.

Pros

Fast Access to Funds: Funds can be available within one business day after approval, making it a good option for businesses needing quick capital.
Fast Funding: Approval decisions are made quickly, and funds can be transferred within 1-2 business days, making it ideal for businesses in need of immediate cash.
Flexible Repayment Terms: Offers weekly or monthly repayment schedules, giving businesses flexibility in managing cash flow
No Collateral Required: The line of credit does not require physical collateral, which is ideal for businesses with fewer assets.

Cons

High Interest Rates: With APRs ranging from 35% to 80%, the cost of borrowing can be significantly higher than traditional loans.
Draw Fees: A 2% draw fee is charged each time you withdraw funds, which increases the cost of accessing credit.
Limited Loan Amount: The maximum loan amount is $100,000, which may not be sufficient for businesses needing larger sums

The Bottom Line

Small businesses that are not as established yet will enjoy Headway Capital’s smaller loans with flexible repayment options.

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Loan Types

Business Line of Credit

Loan Amounts: $5,000 to $100,000
Repayment Terms: 12, 18, or 24 months
Repayment Options: Weekly or monthly payments
Interest Rates: Rates typically range from 35% to 80% APR, depending on your creditworthiness
Fees: A 2% draw fee applies for each withdrawal in most states

Pricing information is retrieved from publicly accessible pricing materials. The actual cost may vary based on specific plans chosen. Always check directly with the seller for the final quote.

Pricing information last updated March 7, 2024.

Qualifications

Time in Business: At least 1 year
Revenue: A business must generate at least $50,000 in annual revenue
Business Location: Check the website to see if Headway Capital serves your state

Application Process

The application is quick and fully online, requiring basic business information and recent bank statements.

Make sure you have the following documents:

Business Tax ID (EIN)
Your Social Security number and personal details for verification
Annual gross revenue & purpose for funds

A soft credit pull is conducted initially, so it won’t impact your credit score. After approval, which can take just a few hours, funds are usually available by the next business day.

Pro Tip: Headway Capital provides a line of credit calculator that can give you an estimate of the fees associated and the repayment schedule based on your desired credit limit, repayment term, and the frequency of payments!

Product Review

Headway Capital offers a business line of credit specifically designed to provide small businesses with flexible, fast access to working capital. This line of credit can be used for various business needs, such as covering operational expenses, managing cash flow, or handling unexpected costs.

Some of its key features include:

24/7 Access to Funds: Once approved, businesses can draw from their line of credit as needed, up to the approved limit.
No Annual or Monthly Fees: There are no maintenance fees, making the cost structure straightforward, aside from the interest and draw fees.
Flexible Terms: The option to choose between 12, 18, or 24-month repayment terms gives businesses more control over how they manage their debt.

Best for: Small Businesses with Lower Annual Revenue

Businesses only need to make at least $50,000 in revenue to qualify for Headway Capital, lower than many of its competitors. You also only need to be in business for 6 months, making it a good fit for younger businesses as well. Businesses in industries like e-commerce, service, or consultancies that need to fund operations, marketing, or inventory purchases may benefit from Headway Capital’s terms.

However, businesses seeking larger loan amounts or lower interest rates might not find Headway Capital to be the best option. Companies needing more than $100,000 or those sensitive to high APRs should consider other alternatives like traditional bank loans or SBA loans.

Headway Capital offers flexible, fast-access funding through its line of credit, making it a strong choice for newer businesses and those with fair credit who need quick capital. However, the relatively high costs and draw fees might be a drawback for businesses that can qualify for more affordable financing elsewhere.