Working Capital Loans
Every business, whether large or small, can benefit from additional working capital, no matter the financial circumstances. It is to no surprise that cash flow can be affected by unforeseen conditions including, but not limited to, natural disasters, changes in supply and demand, or even local extenuating circumstances. In these cases, a Working Capital Loan alleviates the financially burdensome hurdles that come with the difficult circumstances. While other business capital products are centered on the idea of long-term investments that incur massive expenses, a working capital loan allows businesses to resolve temporary revenue and cash flow dilemmas with ease in shorter periods of time. With this advantage, everyday expenses like payroll, new/upgraded equipment or even extra space can allow a prospering small business to get jumpstart on new opportunities.
Even if your business does not need a large amount of capital, a working capital loan may be the best solution for your short-term needs!
Need extra working capital for your business right now?
Working Capital Loan FAQ:
What is a Working Capital Loan?A Working Capital Loan comes in many forms and can be offered from traditional financial institutions or online lending companies. Unlike a traditional bank loan, the Working Capital Loan affords small business owners the best working capital despite suboptimal personal or business credit score even when the business is less than one year in operation. A Working Capital Loan does not require collateral.
How does a Working Capital Loan work?Working capital is more accessible via online lenders than traditional financial institutions, thus allowing terms to be more lenient. Companies often do not have to provide specifics on how the money will be used so repayment terms will be tailored to fit your cash flow and/or circumstance at hand. Standard short-term loans can span time periods as short as 3 to as long as several years depending on type of need and what works best for your overall financial health. There are multiple types of funding products that may be of interest to your requirements:
- Business Line of Credit – This funding product tends to be optimal for seasonal businesses in need of day-to-day operational coverage during the low seasons. It also affords better cash flow management during peak and low seasons. In this way, cash for growth or expansion plans is freed up without depending on invoices to raise the needed finance.
- Merchant Cash Advance – This funding product can be optimal for bridging a shorter gap in cash flow.
What are the advantages of a Working Capital Loan?A Working Capital Loan allows for ease of access, flexibility and offers multiple repayment structures. Lenders are able to work with the circumstances of your business to satisfy your customers’ orders, purchase inventory, undertake new projects, expand your business, and invest in new products and services. You can be approved for a tailored Working Capital Loan in as little as 24 hours from the comfort of your home with the best terms for your financial needs.
What are the disadvantages of a Working Capital Loan?
- With the understanding that the requirements for a Working Capital Loan are less strict, it is to be expected that there is an elevated risk in lending. Business owners with suboptimal credit, little to no cash flow or those in operation less than one year tend to be candidates with higher risk. Online lenders generally have higher interest rates with shorter terms. A Working Capital Loan should be explored if there is a temporary cash flow dilemma as higher interest rates can put a small business in jeopardy if the business is not likely to recover.
- Because a Working Capital Loan often comes with lower borrowing amounts than an SBA Loan and Business Term Loans, it would be inadvisable to use a Working Capital Loan for expensive initiatives such as lengthy renovations. Instead, the Working Capital Loan is ideal for short term goals.
What can I use a Working Capital Loan for?
You can use your Working Capital Loan for the following:
- Creating a cash flow cushion
- Meeting business growth needs
- Purchasing additional inventory
- Purchasing new equipment
- Expansion of service
- Website updates
- Ease of access
- Unsecured loan programs available
- Less than perfect credit scores accepted
- Flexibility in what the capital is used for
- Higher rates and fees compared to traditional loans
- Depending on loan type, requirement of collateral
- Lower credit can mean more expensive capital
Who Qualifies For Working Capital Loans?
Approved businesses generally met the following criteria:
How do I apply for a Working Capital Loan?
Step 1: Submit business bank statements
Upload the last 4 months of your business bank statements. Once bank statements are submitted, an electronic application will be emailed to you.
Step 2: Complete quick 1-page electronic application
Upon completion of our one-page online application, our underwriting team will work to review your information to give approvals best suited for your business.
Step 3: Connect and discuss
Once your application is submitted and reviewed, a trained and skilled representative will reach out to you to explain the repayment structure, rates, and terms of your available options. This will ensure that there are no surprises or hidden fees during repayment.
Step 4: Receive approval
Overall processing can take a few hours, and once approved, the funds will appear in your checking account in about 1-2 business days.