Why Would a Business Need a Working Capital Loan
There are many things you need to succeed in business, such as a solid business plan, talented people to help you, and a working capital loan. Without these factors, you may be making things harder than they need to be.
They say you should take risks as if you will never fail and work as if you don’t need the money. But the truth is that small business financing can be complex and you do actually need it. Learn what you need a working capital loan for and how you can get one for your business.
What is a Working Capital Loan?
In simple terms, working capital is what is left over when you subtract your liabilities from your assets. These assets may include cash on hand, inventory and accounts receivable. For reporting purposes, liabilities are typically your debts and any payments you owe to creditors or vendors.
These leftover funds become the money you have available for everyday business operations. This encompasses everything from taking advantages of opportunities to dealing with emergencies.
When you don’t have enough left over to cover these costs, you are in danger of running out of cash. Additionally, you have no money for growth.
Studies show that this is the main reason why so many small businesses fail within five years. To prevent this, you need a working capital loan.
How Can a Working Capital Loan Help Your Business?
Handle daily expenses – this task should be simple and straightforward but really isn’t. Bills can pile up quickly and payroll must be made each time it’s due.
Uneven cash flow – is cash flow ever actually even? You give your customers 30, 60 or 90 days to pay but your creditors expect their payment right now. Accounts receivable gaps happen all the time. If you are not careful in managing them, they can derail your business.
Manage emergencies – these can happen at any time. A major piece of equipment malfunctions. A weather event knocks out your power for a few days. Hackers manage to steal your customers’ personal information. Any number of situations, big and small, can wreak havoc on your operations. And research proves that more than 40 percent of businesses that face such a crisis won’t survive it.
Don’t Make These Mistakes When Applying for a Working Capital Loan
If you don’t prepare beforehand, you will not be successful. For example, many businesses approach a lender without knowing the answers to key questions. So, when the funder asks what are your numbers or are there any inaccuracies on your credit report, it’s important to have the answers. They will also want to see your business plan and financial statements. When you are not ready with these factors, they view your business as unstable and will deny your request for a small business loan.
Applying only when you are desperate is a recipe for failure. When you rush, you make mistakes, such as choosing the wrong lender. In addition, banks won’t lend to a business that is already in trouble.
Not getting it from Financing Solutions. They are one of the leading providers of working capital funding in the United States.
At Financing Solutions (www.financingsolutionsnow.com), you get your money quickly. It takes only a few minutes to complete their online application and find out how much funding you are eligible for. Most importantly, they do not even check your credit until you decide to move forward. And they don’t require personal guarantees (except in cases of fraud).
Getting the working capital loan you need may be frustrating and overwhelming, but it doesn’t have to be. Trust the experts at Financing Solutions to get the short term business funding you need to grow your company.