Working capital is a common measure of a company’s efficiency when it comes to its day-to-day operations. You can calculate it as: Current Assets – Current Liabilities. Positive working capital indicates that a company is able to fulfill its debt obligations and remain financially viable. And of course, it is essential for a business to continually meet its operational needs.
Businesses with seasonal or cyclical revenue often require more working capital to stay positive during their off-season. For example, a company may be significantly busier during the holidays, resulting in large profits at the end of the year. However, the company must have enough capital to buy inventory and cover payroll during slower periods as well.
Why Choose Working Capital
A working capital loan, or working capital financing, is a form of small business loan that can be used for a variety of business purposes. Many businesses finance their everyday operations with working capital loans. It’s an easy way to cover the day-to-day expenses of running a business, and your company can receive fast funding in as little as one day after approval. Take a look at some of the most common ways working capital is used.
Preparation for an Emergency
Many business owners know all too well how scary financial emergencies can be. That’s why it’s important to have plenty of working capital on hand to address any issues as they arise.
Handling Off-Seasons
Working capital funding (and especially lines of credit) can be great for businesses with seasonal revenue. But even businesses that don’t rely on seasonal business have peaks and valleys, so having working capital on hand is important.
Growth and Expansion
Working capital gives companies looking to grow and expand the flexibility and strength to act fast when opportunity arises. Without positive working capital, it’s very difficult to grow and expand.
Programs and Terms
Our working capital loans can finance as $350,000 with repayment terms up to 24 months – with flexible payback options and no pre-payment penalties.
