Working Capital Loans

What is Working Capital Loan?

 A working capital loan is a loan which is used to cover day-to-day operational expenses by companies. A working capital loan is not used to buy long term assets. It is used to clear up debts, accounts payable, inventory and marketing expenses, wages, etc. Working capital is essential for your business to meet continuous operational needs.

When current assets of your company don’t exceed your current liabilities, you might not be able to pay your short term creditors in a timely manner. By borrowing working capital, your business can meet all day-to-day trade and short-term debt obligations.

Types of Working Capital Loans

 There are different types of working capital loans provided by lenders. All types of working capital loans provide the same working capital required by your business. However, the working capital loan is provided on the basis of credit quality of your company and your needs. Locating lenders for all these types of working capital loans is not easy:

• Cash Credit/Overdraft

• Term Loan

•Letter of Credit

• SBA loans

• Asset Based loans

• Merchant cash advance loans

• Receivables factoring

Whether you’re an emerging startup with limited credit or making profits seasonally, we,, have lenders that can provide you the type of working capital loan required to cover your daily expenses.

Who should consider borrowing working capital loan?

 When a company's working capital is insufficient to meet the obligations within due period, it must obtain financing. Determine your working capital needs by looking at the business operating cycle. If enough cash is not generated to pay accounts payable when they become due, you must borrow working capital loan.

Working capital loan requirements

 Working capital loan is available to those businesses which have established credit or cash flow. A good/strong credit score is essential, but it’s not the only determining factor for obtaining working capital finance. Sometimes, lenders consider the current or future cash flow in the business in order to provide loan. Businesses can borrow working capital loan at optimal rates if they have good credibility.

Who provides working capital loans?

 Traditional banks provide working capital loans. However, if companies that are not able to qualify for working capital finance from a bank can apply in a private finance firm. Private financial solution companies have different options available for you to meet your daily business expenses.

There are numerous working capital loan options for your business. If you’re not sure what loan type is right for you, fill your loan needs in the loan seeker application that will help you determine which loan best fits your financial needs.

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