Do you need Working Capital?
Without working capital to manage short-term expenses, your business could be in hot water. Handle your day-to-day needs with ease when you have a working capital loan.
Do you need Working Capital?
Without working capital to manage short-term expenses, your business could be in hot water. Handle your day-to-day needs with ease when you have a working capital loan.
Loan Overview
A working capital loan can help you launch a new product, give your showroom a facelift, and even smooth out variations in seasonal revenue.
Working capital is vital to any business. It’s what businesses use to pay utilities, rent, payroll, and bring in supplies and materials. Even if your business has valuable long-term assets, a lack of working capital means you’re in trouble. There are two important formulas you can use to calculate your working capital needs. To get your total working capital, subtract your current liabilities from your current assets. “Current” is anything occurring during one fiscal year. That number tells you how much money you have to meet your business’s short-term expenses. A working capital ratio is a measure of your financial health. You can calculate this by dividing your current assets by your current liabilities. In most cases, a score of 2 is ideal, but this varies by industry. Higher can mean you’re not reinvesting into your business. Lower means you might struggle to make ends meet. A working capital loan can improve this ratio so you won’t have to worry about sinking into debt.
Flexible
Unlike real estate and construction loans, working capital loans aren’t tied to a specific purchase. So, you can take care of everything from getting new copiers and laptops to keeping the lights on. If your business needs it, a working capital loan can help you pay for it.
Fast
Working capital financing like factoring and lines of credit can be available at your fingertips. Use them as needed without having to go through the application process every time you want access to quick cash. They also work as emergency funds when you get hit with unanticipated costs.
choices
You can find several types of loans that provide working capital financing, even if your credit needs repair. Secure funds using your assets or use your credit score to qualify for unsecured loans. If you’ve been turned down for funding before, an SBA 7(a) loan will help you bring working capital into your small business.
ADVANTAGES
Flexible use.
Easy to apply for.
No long-term payments.
Can help improve credit.
DIS-ADVANTAGES
May have higher interest rates than long-term loans.
Late payments can affect credit.
Must be repaid in the short term.