A working capital loan is one of the easiest ways to harness the potential of your business. These types of small business loans often act as unsecured debt, so they don’t require you to provide traditional collateral. They can be a great solution for businesses that are small, just starting out, don’t have traditional collateral or are simply in a period of low cash flow.

Working capital is calculated by subtracting current liabilities from current assets.

CURRENT ASSETS – CURRENT LIABILITIES = WORKING CAPITAL

Many small business owners assume getting capital loans is a long, drawn-out process. Luckily, it doesn’t have to be that way! Alternative lenders like National Funding provide loans for businesses with easy online applications and quick response times. In fact, you could see your loan application approved in as little as 24 hours.

Most definitions of working capital include cash. This is because business capital is your current assets minus your current liabilities. Cash, like the money you get from a loan, plays an important role in running the current operations of your business.

Your business’ cash reserves and assets can give you a great snapshot of how well you are using business resources. If your business has a lot of assets, including cash, inventory, and accounts receivable, with only a few liabilities, your business is probably in a good place financially. Sometimes, however, you have to wait for a customer to pay an invoice or you need to purchase new inventory and don’t have the cash. That’s where financing solutions can help your business bridge the gap between cash on hand and expected receivables.

It might sound counterintuitive, but securing a business loan while sales are up could be a smart move financially. Your working capital loan can be used for more than just overdue bills. For example, your restaurant is packed every night, and you have to turn customers away because you’re too busy. You decide to move to a new location but to afford the new spot, you’ll need extra cash. You could use a loan to help cover the costs of the move, including hiring more servers and installing kitchen equipment. At any point, allow our trustworthy lenders to help you obtain a working capital loan — even if your business is doing well.

A term loan is a long-term loan for funding large capital assets. Working capital is meant to provide you with funding to cover everyday business expenses and operations during a slow season or tight time, while a term loan is used for a longer amount of time and may be planned further in advance. This contrasts with working capital loans which are borrowed for a shorter term and are for operational costs rather than investing in capital assets.

You can apply for a working capital loan by filling out an application form with basic financial information about your business. Apply for a personal, working capital loan from Kairos Equities here.