Working Capital Loans
Working Capital for Business Owners
- What are Working Capital Loans?
- How Do They Work?
- What Will Working Capital Loans Cost You?
- What Do I Need to Qualify?
- How Do I Apply?
- What Documents are Needed?
Working Capital for Business Owners
|Estimated Business Loan Term||12 to 36 Months|
|Rates||9% to 45%*|
|Time in Business Required||2 Months|
|Min Credit Score Require||650|
|Min Monthly Deposits Required||5|
|Min Monthly Revenues||$10,000|
|Min Business Loan Amount||$10,000|
|Max Business Loan Amount||$1,000,000|
|Max Number of Negative Days||4 Within a Month|
|*rates depend on duration of funding|
We also help small business owners secure working capital loans with bad credit. If you have been denied traditional financing or just do not meet the minimum credit requirements for any type of funding then our bad credit business loans are a perfect fit. You can access the working capital you need without the strict requirements of traditional working capital loans. If you do not meet the requirements for our working capital loans then visit our bad credit business loans to help with your working capital needs.
Below is a list of the general requirements needed to get approved for our working capital program. Although in some cases there are many additional factors that may be considered, meeting these three requirements gives you a very high chance of having your application approved.
Working capital loan amounts depend on your monthly revenues and business bank deposits. Approval amounts for working capital can range as high as 70 percent or more of your typical monthly deposits. As an example, if your business currently has monthly gross deposits of $50,000 your likely approval amount would be approximately 35k or more.
Your credit history has is an important factor with this type of business funding but with working capital loans your business details weigh more in the approval process. We look at time in business, your business banking information, monthly cash flows, and several other key business information.
Once you receive funding via bank deposit you can expect daily or weekly debits from the business bank account for an agreed upon amount over the course of the payback period. If you receive a daily option debits are calculated on a 5 day business week schedule that does not include holidays. If you qualify for the weekly option then you will have a one time weekly debit for the agreed upon amount throughout the course of the payback period.
Working capital is the cash required to manage a company’s daily operations, also known as operating liquidity. It is the money used to purchase the goods or inventory that a business sells in order to generate revenues and profit. It is also the capital required to sell that inventory, such as labor and other forms of overhead. Maintaining comfortable working capital levels allows a business to take advantage of money making opportunities as well as operating a business in an optimal way.
Working Capital loans are a great funding option if you require cash for your daily business operations and you do not qualify for traditional business loans. Although working capital loans can be more expensive than traditional financing, the ease and speed at which you can receive funding can make it a very attractive alternative, especially if you need to cover immediate expenses such as payroll or inventory costs.
Managing working capital is critical to a company’s success. Buying too much inventory or too little inventory can affect the bottom line of a business. Hiring too many employees or not managing their production can also lead to losses. A business owner must consider every aspect of working capital management to ensure the company can continue its operations. Below are some basic tips that can lead to successful working capital management.
Managing your cash flow involves establishing and documenting everyday expenses and understanding your working capital limits. Daily assessment of your bank accounts, pending payments, outstanding invoices, and overall financial health are the basic steps in ensuring proper working capital management.
Invest your working capital in cash flow opportunities. Improving your inventory turnover ratio will increase your cash flow so take a proactive role by offering customers incentives or discount prices for larger purchases. Customers will purchase more if they can save money and a phone call or promotional effort can make a real difference when attempting to increase your available capital.
Reinforce timely payments for outstanding invoices. Develop a strict policy for timely payments and your customers will understand from the very beginning that you are not a creditor that can be delayed. Often customers will choose to satisfy your invoices and delay payments to other creditors who are not as diligent.
Balance purchasing to ensure good pricing without too much overstock. Working capital loans can be utilized to increase inventory levels and decrease product costs. Determining the maximum efficiency levels involves an in-depth analysis of customer behavior as we as historical sales data. Document inventory levels, consider seasonal or natural fluctuations, and establish the maximum inventory levels with the least amount of overstock. In your analysis consider the points that are not immediately apparent. For instance, although products on the shelf reduce cash flow, you will not take an aggressive approach to selling inventory that you do not have. Sometimes having inventory forces small business owners to be more proactive, and ultimately more productive. However, too much inventory may cause even the most proactive owners to remain with some inventory. Combine data from inventory with the success or failure of proactive approaches and you will surely be able to utilize working capital efficiently.
Distributing working capital effectively is not just about inventory, it also involves managing labor costs and productivity. Business owners often fail to manage their employees correctly. Wasting labor hours is no different than leaving stock on shelves. You must delegate production to employee strengths and hire additional labor only when you require labor to meet production needs. A daily, strategically prepared list of tasks before the day begins will result in maximum output amongst your existing labor team and reduce the need for additional employees.