How Can A Working Capital Loan Help Your Business?

How Can A Working Capital Loan Help Your Business?

In order to operate efficiently, businesses require a certain amount of freely usable funds that they can utilize in day-to-day operations. Sometimes, these funds can become scarce. That’s when businesses commonly look for financing options to see them through.

Working Capital in Brief

Working capital is the amount of cash a business has on hand to cover normal everyday expenses. These include costs such as rent, employee expenses, inventory, and utility bills, among others. In brief, any business’ working capital is calculated by subtracting business liabilities from business assets. If a business has negative or too low working capital to run its activities, a working capital loan or other funding solution may be required.

Type of Working Capital Solutions

There are a number of options that a business can use when seeking additional working capital from a funding source. These include:

Lines of Credit. A line of credit is like having a sum of money in the bank, available to tap into when needed. In some respects, it is similar to a credit card in that the business gains access to a pre-approved amount of credit that can be utilized as needed.
Term Loans. Banks, credit unions, and other financing agents can provide loans with fixed terms and interest rates as a solution to short-term working capital shortfalls.
Merchant Cash Advances. This form of financing is elegant and commonly used by businesses. The firm receives a lump sum of upfront cash from the financing agent. The funding is paid back with a percentage of the business’s daily sales.

Seek Expert Assistance

Here at Champagne Global Capital, we are in the business of providing funding options for small- and medium-sized businesses. We’d like to be your preferred source for working capital needs. Give us a call today.