What is a Working Capital Loan? And How Can I Get One for my Business?
Working capital is the money a business uses to cover its daily expenses like utilities, supplies, payroll, and rent. A working capital loan offers your business a way to temporarily pay for these expenses when your bank account is running low.
You might think that if your business is successful and you manage its finances correctly, you could never have need of a working capital loan. But that’s not necessarily true. Maintaining a balance of cash on hand can be a challenge.
While it’s important to keep some money in reserve, you don’t want your company’s financial safety net to grow too large either. Save too much money (like Scrooge) and you could miss some valuable opportunities to invest in your business and potentially grow.
But what happens when an investment goes wrong or you don’t collect on invoices as quickly as you anticipated?