How much working capital can my firm get, and what does it cost?

How the amount is sized

Working capital is underwritten on the operating account, not on a credit score or a projection. The approval is typically 75% to 150% of one month’s deposits. A consultancy depositing $60,000 a month is looking at a range of roughly $45,000 to $90,000; a law firm depositing $200,000 a month at $150,000 to $300,000. The product runs from $10,000 to $2,000,000.

Where in that range a firm lands depends on what the statements show beyond the top line:

• The slowest month in the window. The payment is sized against your floor, not your average. A firm whose three statements show $90,000, $40,000 and $110,000 is sized closer to the $40,000 month. This is why seasonal practices should send four months rather than three — it lets the underwriter see that the quiet month is a quiet month and not a trend.
• Average daily balance. A firm that keeps a cushion between client payments sizes higher than one with a bigger top line that touches zero before each payroll.
• Who the deposits come from. Thirty retainer clients read differently from one quarterly payer. Spread and recurrence both push the number up.
• Existing positions. An advance already in place reduces the room. Disclose it; the file is sized around it either way, and the version where it is disclosed is the better one.

Retainers, recurring client payments and settlements that land in the operating account all count. Client trust and IOLTA balances do not, because they are not the firm’s revenue. Send the operating account.

How the cost works

A working capital advance is not priced as an interest rate. It is the purchase of a fixed amount of future receivables at a discount, so there are exactly three numbers, all fixed before you sign: the amount funded, the total payback, and the payment. There is no APR, no compounding, and the payment never changes with your deposits — no split of client payments, no holdback percentage, no lockbox on your account.

The published illustration on the working capital page is a $150,000 advance over 12 months:

• Total payback $190,500, which makes the cost of funding $40,500.
• Repaid daily, that is $756 per business day across 21 business days a month. Repaid weekly, it is $3,664 a week.
• Paid off inside the first 30 days, the firm keeps up to $12,150 of the remaining cost.

Three things move the cost on a real file. Term: a shorter term carries a lower total cost but a larger payment. Rhythm: daily debits usually price better than weekly for the same file, because the balance comes down faster. And the quality of the statements described above. Your actual numbers depend on underwriting; nothing in the illustration is an offer.

The early-payoff discount

Because the payback is fixed, the discount for paying early is also fixed and published: up to 30% off the remaining cost of funding when the advance is cleared within the first 30, 60 or 90 days, with the largest discount at 30 days. For a firm this matters more than it sounds. A contingency practice that takes an advance for case costs and then settles in week six, or a CPA firm that clears a January advance out of April fees, keeps a meaningful share of the cost it was quoted. Take the term you can comfortably carry, and pay it down when the money lands.

How fast

An offer comes back in about four business hours on a complete file. Funding is in 24 hours, and same day when a clean file is signed before 11:00 AM ET. The contract is two pages. Debits run on business days only; weekends and bank holidays are skipped.

When working capital is the wrong product for the amount

• If the need recurs every month because clients pay on terms, a line of credit ($25,000 to $500,000, 600+ FICO, 12 months in business) costs nothing unused and is drawn only when a client is late.
• If the amount is really sitting in unpaid business-client invoices, receivables funding advances up to 90% of each invoice within 24 hours and is usually the cheaper structure for that exact pattern.
• If the amount is for a buyout, an acquisition or consolidating stacked advances, a term loan over 36 to 60 months with one monthly payment is the right shape. The partner buyout guide walks through it.

What you’ll need

• The 4-minute application. Applying does not affect your credit.
• Your 3 most recent months of business bank statements for the operating account; 4 if your billing is seasonal.
• A note on which deposits are retainers, recurring clients, settlements or pass-through reimbursements.
• Your preferred payment rhythm, daily or weekly, matched to how your clients pay.
• Any existing advance disclosed up front.
• No tax returns under $500,000, no business plan, no collateral.