Ensuring that your business has the funding it needs often requires a working capital loan, which can be crucial to your long-term success. Let us help you determine how much capital is required periodically so that you can continue to successfully grow your business.
Business working capital loans are specifically acquired to help finance the everyday expenses of running a business (such as payroll and accounts payable). These loans are typically short-term and for relatively small amounts, especially as compared to secured bank loans. Loans for working capital are a good option for businesses with seasonal sales cycles, as they provide the funds to ensure that the business does not suffer financially during slower seasons. These loans are also useful for growing businesses whose financial needs may be temporarily outpacing their cash flows.
Working capital loan requirements tend to be easy to navigate, and the loans are typically unsecured, which means they don’t require collateral. Applying for an unsecured loan is usually much easier than applying for a secured loan, and borrowers usually receive their funding faster. Approval and funding are often received in days instead of months. And, if you have to default on your unsecured loan, you likely won’t have to give up your assets to the lender.
There are only a few working capital loan requirements. You will have to prove your ability to pay back the loan with documentation such as bank statements and tax documents. Your credit score will also often be taken into consideration. Once approved, you and your lender will agree on your working capital loan rate and repayment schedule.
Even though approval and funding can be faster with unsecured loans, the best time to get a small business loan is before your business needs it. That way, you’ll be able to do your research, make a funding decision confidently, and get the best working capital loan rates available. If you know your cash flows and sales are seasonal or cyclical, have funding secured before you move into your “slow” season.
Want to learn more about working capital loans? Check out our latest on What You Need to Know about Getting a Small Business Loan in 2019.
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