Top 5 Things To Know About Working Capital Business Loans

Running a successful business is about much more than profit and loss. It’s about staying on top of all aspects of the organisation and ensuring you have the funds in place to take advantage of opportunities when they arise. It can also mean having the security in place for when market conditions get tougher. But with nearly half of all business owners admitting they struggle to pay operating expenses, it is fairly clear that working capital is a major priority for any successful business.

Of course, access to working capital can be a source of frustration for some business owners, as money is often tied up in other areas of the business. Which is when shorter term finance options such as a working capital loan can be the right solution.

Working capital business loans can be obtained from a number of different provider types and could be the answer to your day-to-day expenses and finance difficulties. Of course, there are some key questions that need answering, including how to get a working capital loan and what distinguishes them from other types of finance? Below are five things every business needs to know before going down this financing pathway.

Type Of Loan

Business working capital loans are generally taken to finance everyday operations, such as running expenses. They are not the right option to finance long-term assets or investments but are meant to provide working capital to cover short-term operational needs. So, if your business is struggling to meet operational expenses, this may be the right choice. However, if you are looking to finance other types of strategic investment, then other loan types may have more favourable terms and conditions.

Speed

One of the major benefits of working capital loans is the speed with which they can be approved. Generally, operational expenses need to be settled quickly and with some brokers able to approve applications in just a few hours, funds are potentially available as quickly as the next business day. This is an ideal solution for any business facing urgent cash flow needs or in need of a quick cash injection without the formalities of a lengthy application process.

Credit Requirements

There are, of course, certain requirements you must meet in order to qualify for a working capital loan. But the good news is that you don't need perfect credit to qualify. Unlike personal loans, brokers usually understand that businesses go through slow periods. This means they are more willing to work with borrowers who have less-than-ideal credit. The specific credit requirements may differ with various lenders, so it’s always worth exploring your options even if you don’t qualify for some brokers.

Application Process

The application process is generally much less complicated compared to other types of financing. Most brokers only require six to nine months of business bank statements, as well as a few other basic details about the business. You won’t have to spend hours filling out page after page of forms in duplicate.

Multiple Repayment Options

Working capital finance is a more flexible type of lending aimed at assisting businesses in the short term. Repayment options can be similarly flexible, with brokers offering various repayment options to suit different business needs. Repayment terms are usually daily, weekly or monthly, ranging from six months to three years. You may be able to select the repayment plan that best suits your financial requirements at that time.

Check eligibility for a working capital business loan or get in touch to speak to our experts about arranging short-term working capital business loans. Having access to the funds you need, when you need them, could be the basis for your future financial success.

Image Source: Canva