Benefits of Working Capital Loans for Small Business

The Benefits of a Working Capital Loan

What is a working capital loan? It is a loan that is specifically designed to help a business with their daily operating expenses. These loans are often short-term in nature and are based more on a business’s overall cash flow more than what the credit score of the business happens to be. Even if a bank has turned down a business for a loan, there are alternative lenders available to businesses that make more than $15,000 per month with an approval rate above 90%. If you are looking to expand or restructure your business, a working capital loan could be the answer for you.

Working Capital Loans Are Often Approved Quickly

Unlike other capital loans that can take weeks or even months to work their way through the approval process, most working capital loans are approved within a few days. This is because a business needs this capital loan in order to meet some sort of working expense. From needing new equipment to covering inventory costs on orders already placed, some businesses even utilize a working capital loan to cover the expenses of hiring new employees! As long as the loan funds are used to cover some sort of daily operating expense, you’ll find that a working capital loan can be quite useful.

Many Loans Have Friendly Repayment Terms

One of the nice aspects of a working capital loan is that many of them base their repayment based off of a percentage of each sale that you make. If you see items normally for $5, for example, a lender may request that 10% of the purchase price, or $0.50, be sent to them out of every sale that is made. This allows business owners to adapt their pricing structures to offset some of the costs of the loan without negatively impacting their customers in some way. This also allows a lender the opportunity to make their money back with interest quickly.

If a business doesn’t do much in sales, a small daily payment may be required. These payments are deducted automatically from a business’s accounts Monday thru Friday and though may be difficult to make on a slow sales day, can really help a business develop a solid credit history right away.

Are You Ready To See What Your Business Could Do?

A working capital loan is one of the easiest ways to explore the maximum potential of your business. If you’re in a solid financial position, but just need a little extra help to make that necessary expansion or find that extra staff member that can give your business a start, why not consider what one of these loans could do for you? With easy repayment plans that don’t require you to give up a portion of your business like an investor would require, you can solidify your credit while you also solidify your reputation. Apply for one today if you’re ready to take your business to the next level!