American Express (Amex) Working Capital Terms is a financing solution that you can use to pay off vendor invoices and help stabilize cash flows as it gives you up to 90 days to repay your loan. Its loan amounts are anywhere from $500 to $150,000, and it’s best for businesses that are looking for flexible repayment schedules.
American Express Working Capital Terms Pros and Cons
No prepayment penalty
Only available to select pre-approved Amex Business Card members
No origination fee
Lump-sum payment required at the end of your term
One low fixed fee for each funding request
Can only be used to pay vendors
Who American Express Working Capital Terms Is Best For
- Amex business credit cardholders: The program is only available to pre-approved cardholders who have at least six months of account history; a six-month account history requirement does not apply to Business Gold Card members.
- Those who require funding to stabilize cash flows: Its working capital can be used for covering short-term operational costs, financing big projects, expanding the business, and taking advantage of opportunities without affecting your current cash flow.
- Businesses that are looking for more flexible repayment terms: Amex Working Capital Terms can aid you in paying vendors during slow seasons. It may also come in handy for companies whose vendors don’t accept cards as a mode of payment and whose terms don’t work for the business.
American Express Working Capital Terms Costs and Terms
$500 to $150,000
Varies based on receivables
30-, 60-, or 90-day
Repay only until the end of your term
Two business days
American Express Working Capital Terms’ costs are very straightforward and laid out on its website. It charges one fixed fee for each funding request that you make, and this fee varies depending on the repayment term that you select between 0.6% to 1.75% for 30 days, 1.2% to 3.50% for 60 days, and 1.8% to 5.25% for 90 days.
Additionally, it does not require collateral, charge an origination fee, or impose a prepayment penalty. Its annual percentage rate (APR) of 6% to 12% are already inexpensive, considering that it is short-term financing. Amex Working Capital Terms also offers a revolving borrowing structure that works similarly to a line of credit, which means that you can repeatedly request funds from your account as long as you don’t exceed the amount that you were approved for.
One important thing to consider is that you will be required to make a lump-sum payment at the end of your term. Should you fail to repay the loan, there will be a late payment fee equal to 1.99% of the unpaid balance, including any unpaid late payment fees, and this is charged monthly until the loan is paid in full.
Do You Qualify for American Express Working Capital Terms Financing?
American Express Account History
At least six months (exceptions apply to Business Gold Card Members)
Minimum Credit Score
Amex Working Capital Terms’ eligibility is based on at least six months of account history, creditworthiness, and other factors, which include your overall personal and business financial profile. The lender will use the information it already has about you and won’t run another credit check on you.
To be able to request funds, you must be enrolled in the American Express Working Capital Terms program, have identified at least one vendor, and have linked at least one business bank account. Your vendor will need to be verified by Amex Working Capital Terms, with its process taking anywhere from one to five business days.
American Express Working Capital Terms Application Process
Once you have met the requirements above and have successfully enrolled and qualified in the Amex Working Capital Terms program, you will have access to its dashboard. Here, you can add your vendors’ details and their automated clearing housing (ACH) bank account information.
After this, you can request funds by selecting which vendors to pay, indicating the amount needed, and choosing your preferred repayment term. If your funding request is approved, then the funds will be sent to your vendor’s bank account automatically via ACH within two business days. At the end of your term, Amex will automatically debit your bank account for the funded amount and the working capital fee.
American Express Working Capital Terms Alternatives 2020
up to $250,000 for line of credit
What Business Owners Should Know About American Express Working Capital Terms
- Amex Working Capital Terms funds never go through the borrowers: The lender deposits the money straight to the vendor’s bank account. In line with this, borrowers can only request payment for United States-based vendors. Amex also reserves the right to refuse to send payments to a vendor if it determines that the vendor is ineligible to receive payments.
- Amex business loans, which include its working capital program, are backed by the American Express Company: Amex services around $300 billion in loans worldwide each year, and that amount includes several billion dollars in small business loans and financing in the US.
- Amex offers other funding options: Its two other financing programs include express business loans―$3,500 to $75,000―and merchant financing―$5,000 to $2 million. Express loans have terms of up to 36 months, with APRs ranging from 6.98% to 19.97% while merchant financing has terms of up to 24 months, with fees ranging from 1.75% to 28%.
Most Helpful American Express Working Capital Terms Reviews
As of the date that this article was written (March 12, 2020), there are very few up-to-date American Express Working Capital Terms reviews online. If you are a past or current American Express Working Capital Terms customer, leave a review to help others who are deciding whether or not to use the service.
American Express Working Capital Terms Frequently Asked Questions (FAQs)
What happens if I am unable to pay my loan on its due date?
Amex may charge you a late payment fee, suspend your ability to request funds, and/or cancel your enrollment in its working capital program.
How will my vendor get paid?
Amex will send funds directly to your verified vendor via ACH. It will not tell your vendor that you are financing invoices, and it will clarify that the payment is coming from you.
Can I cancel my enrollment?
You can cancel your enrollment at any time. However, if you choose to do so, then you will not be able to re-enroll in the American Express Working Capital Terms program.
American Express Working Capital Terms works best for businesses that need short-term accounts payable financing. It offers competitive rates, flexible repayment terms, reasonable fees, quick funding, and zero paperwork. It has no origination fee, prepayment penalties, or required collateral.
Its two major drawbacks are that it is only available to American Express Business Card members and that its working capital can only be used for a single purpose: to pay your vendors. Amex also requires you to make a lump-sum payment at the end of your term. This, ironically, may affect your cash flow.