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A working capital loan is a form of short-term business financing that enables a business owner to facilitate and execute daily business operations. It covers the cost related to the regular operations like labour costs, accounts payable, marketing fees, rent, payroll, etc. It can be best explained through a simple formula. Current assets of the company – current liabilities of the business = Working capital The working capital is not suitable for buying assets or for funding long-term growth for the business.
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Under the following circumstances, you can apply for a working capital loan and mitigate your financial emergency.
To cover regular operational expenses: Businesses that run on a seasonal revenue model can experience slow months during which cash flow can become somewhat of an issue. Working capital loans come in handy in such times. It eases the regular expenses.
Payroll: In the quieter months due to a cash flow imbalance a business might run out of capital making payroll difficult for them. In such circumstances, you can use working capital loans to pay your employees.
Inventory purchases: You can use working capital finance to make essential inventory purchases or restock it for emergencies.
Busy sales periods: During busy periods, there can still be some delay in the payments from the clients/customers. At that time, you can receive some respite from working capital loans.
There are multiple benefits for businesses applying for working capital loans, such as:
Being a small business owner, many of our clients are not sure of right loan product for their businesses. Our lending specialists understand their needs and recommend tailor made options.
Unlike business loan marketplace websites which use AI based algorithms to match your requirements, we provide obligation free personal consultation as every business is different and an AI based algorithm may not provide them the optimum solution.
We endeavour to achieve the optimum business loan solution for our clients at the most competitive pricing possible.
We understand the essence of time so don’t believe in wasting our customers time by giving false hopes. Transparent and clear communication is in our DNA.
It’s not necessary in all cases. It depends on the loan amount and strength of the deal. Generally, we can get unsecured working capital loans up to $500,000.
The interest rate varies from one business to another. It depends on multiple factors like business trading time, industry, banking, credit history etc. Please contact us and our experts will be able to run you through an obligation free indicative quote without leaving any trace on your credit file.
Since working capital loans help boost the cash flow, it is beneficial for small and mid-level enterprises. It can help fill the financial gap between capital and cash flow.