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Working Capital Loans
Get fast and easy access to working capital to propel your everyday business activities.
Working Capital Loans
Ready To Move Your
Business Forward?
By clicking this box, I agree to Advance Funding’s Solutions Privacy Policy.
What is a Working Capital Loan?
A short-term loan that is used to finance day-to-day business operations such as managing payroll, stocking inventory,
manufacturing products, paying debts, and so on can be termed as working capital loan.
A working capital loan can only be used to cover everyday business expenses, and cannot be utilized towards funding real
estate purchases or investing in long-term assets.
How a Working Capital Loan Can Work for You
Working capital loans help cover day-to-day business expenses if your business is lacking cash flow or in need of extra
funds to expand. Designed for short-term business needs, a working capital loan helps you sustain business activities on a
daily basis to help you plan for long-term success.
Having cash on hand helps cover the everyday fluctuations of your business and provides peace of mind when businesses
experience cash flow gaps or have unexpected expenses. Unpredictable revenue streams, seasonal sales lulls, or
equipment breakdowns can all cause disruptions in working capital. Alternatively, increases in demand or opportunities
.for expansion can be reasons for increasing your cash reserves to plan for your business’s long-term success. Here are
some ways in which working capital loans can help your small business:
Hire More Staff
- Hire new employees to support your business growth
- Make sure payroll is covered so your workers are paid on time
Finance Equipment
- Replace outdated equipment with newer models for your business
- Cover the cost of equipment maintenance or repairs
Add Inventory
- Introduce new items, product lines, or services to drive revenue for your business
- Stock more best-selling items during your peak sales seasons
Manage Cash Flow
- Maintain daily operations even through gaps in cash flow
- Continue running your business seamlessly during seasonal lulls
How to Get a Working Capital Loan
The first step towards getting a working capital loan is to understand your company’s short-term business capital needs.
You must figure out if you need money to hire skilled employees, or manage existing debt, or pay vendors for inventory.
The next step is to research lenders that specialize in working capital loans for small businesses. Understand what are
loan qualification criteria and loan application process of each lender. Most banks, traditional lenders, as well as
alternative lenders might require you to put down collateral to secure the loan. If you are just starting your business, or
have a poor credit score, you might have to look for lenders that specialize in bad credit loans.
Gather all your financial & business documents such as income tax returns, business income statement, business plan,
and other such reports. When you submit the loan application, don’t forget to attach all these financial documents for
lender’s assessment.
Once the lender approves your working capital loan application, read the terms and conditions of the loan before
accepting the loan. Compare the interest rate, loan duration, and repayment frequency with other lenders in the market.
Don’t hesitate to negotiate on loan terms if the lender is flexible.
How to Apply
Applying for a working capital loan is simple with Advance Funding. We'll connect you with a dedicated Funding
Specialist to help you understand your options. Apply online or connect with a specialist over the phone.
or call
How Does a Working Capital Loan Work?
When business owners apply for a working capital loan, the lender examines their personal & business credit score
along with their financial statements. Based on the lender's loan qualification criteria, the application can be approved
or rejected.
Once the application is approved and the loan terms are laid out, the business receives the working capital loan either
as a lump sum amount or a revolving credit depending on the lender. Remember that working capital loans are
essentially short term loans so they need to be repaid within 12 to 18 months in general (depending on the loan
agreement). The payment frequency can be daily or weekly as per terms printed on the loan document.
Here’s how working capital loans work with Advance Funding:
Fast & Easy Application Process
No-cost, no-obligation application with
funding in as few as 24 hours1
Helpful Loan Guidance
A Funding Specialist will contact you to
help you choose the right business
financing option.
Quick Decision, Fast Funding
You could be approved, and funds
deposited into your account, in as
little as 24 hours.1
When Should Your Business Consider Working Capital Loans?
In general, a small business owner seeks working capital loans when they are short of cash flow and struggling to keep
the business running on a daily basis. To know if your business needs a working capital loan, you must first calculate the
company’s working capital on hand.
Calculating Working Capital & Working Capital Ratio
You can find your business’ working capital by deducting the current liabilities from current assets.
Working Capital = Current Assets - Current Liabilities
Current Assets include cash on hand, accounts receivable, short term investments, inventories, and so on. On the other
hand, current liabilities include existing debt, account payable, employee wages, and income tax owed. If your working
capital is too little or in negative, your business could definitely use a cash flow boost with a working capital loan.
Another way to comprehend if you need working capital loan is by calculating the working capital ratio.
Working Capital Ratio = Current Assets ÷ Current Liabilities
If your working capital ratio is equal to 1 or less than 1, it indicates the lack of cash flow, which can be resolved through a
working capital loan.
Types of Business Loans
Depending on the lender you choose to work with, you might get three types of working capital loans.
SBA Loans
SBA 7(a) loans can be used as working capital loans. Backed by U.S. Small Business Administration, these loans tend to
have lower interest rate, strict qualification criteria, and moderate approval rates compared to other types of business
capital loans.
Short Term Loans
Most traditional and alternative lenders offer short-term loans for businesses in need of working capital. These loans
tend to have higher approval and interest rates and might require business collateral. Alternative lenders like Advance
Funding are quick with their loan approval process, offering funds within 1 or 2 days.
Business Line of Credit
Some lenders offer a business line of credit that can be utilized for working capital by businesses. This type of loan
involves a revolving credit where you can draw funds as and when you need from the set limit of loan amount available to
your business
What are the Benefits of Working Capital Loans?
A working capital loan provides a quick and easy way to achieve your business goals. If your business needs access to
business funding for short-term or long-term planning, a working capital loan can help you get there. Working capital
helps cover financial shortcomings until business can stabilize and gives access to funds for critical payments to maintain
regular operations. Working capital loans can be customized to your unique business needs. With experience in almost
every industry, Advance Funding provides highly tailored financing solutions to meet your specific business goals.
Be Better Prepared for the Future with More Capital
While the saying may be ‘business isn’t personal,’ we know small business owners take pride in their companies, and that business truly is personal.
Small business capital could make all the difference in the success of your company, and we want to help. Cash reserves
make businesses better equipped to manage growth opportunities and see long-term success. A lack of cash flow can
lead to late payments, decreased credit scores, and higher interest rates on future business loans. But with a working
capital loan, your business can cover cash shortages and stay afloat during sales slumps. Don't miss out on critical
payments like payroll or inventory orders – prepare for the here-and-now by acquiring access to funds for your business.
Maintain Ownership of Your Business
Working capital business loans allow you to maintain control of your business. Traditional equity investors typically
require a percentage of your business in exchange for funding. Business owners are often reluctant to give up a portion
of ownership for a company they’re passionate about, which is why we partner with small businesses to get them access
to critical funding without giving up a portion of their business. Small business loans give business owners access to
capital without losing ownership so your business can continue to grow and thrive with your vision for success.
Working Capital Loans With No Collateral Required
Some small business working capital loans require collateral of some sort, but we provide working capital with a personal
guarantee and without requiring collateral. When applying for a working capital loan, we look at the current status of
your business which helps us determine the loan amount that suits your business.
Provides Financial Flexibility
A working capital loan can be used how you personally see fit for your business. Working capital loans can be used for
paying employees, purchasing equipment, paying bills, and more. No matter the financial needs, receiving a working
capital loans for your company allows financial flexibility to help you with your business needs.
What Customers Are Saying
Cheryl Dailey, Owner
Master Handyman, LLC
Focusing its business on providing handyman services to
commercial enterprises in Cleveland, Master Handyman
looked to secure a working capital loan to cover key
expenses and allow them to hire new staff to foster growth.
They wanted “real employees, not just day laborers”, and
working with Advance Funding gave them the cash resource
they needed to make it happen.
Craig Hart, Owner
Smyth Electrical Services
As the business entered a period of expansion, having the
reliability of available cash was critical to alleviating the
stresses that growth can cause. Being able to rely on
Advance Funding’s small business loans was the peace of
mind that help the head of this small business rest easy.
Financing for Various Industries
Whether you're a contractor or run a retail shop, you've probably experienced a short-term need for small business
capital. A healthy cash flow lets you pay for expenses and take advantage of new business opportunities. Advance
Funding has experience providing working capital loans for small business owners for almost every type of industry.
Small Business Loans for Trucking
Companies
Fuel your trucking business with loans
tailored for truck companies
Agriculture Business Loans
Grow your farming business to its
fullest potential with small business
loans
Construction Business Loans
Build your business to reach great
heights with loans from Advance
Funding
Restaurant Loans
Serve your customers better with loans
that serve your business
Gym and Fitness Center Business Loans
Get loans that work out the best for
your business with Advance Funding
Beauty & Wellness Business Loans
Give your business the best makeover
with small business loans
Why Advance Funding?
We have experience helping a wide variety of business owners secure the right financing solution — funding for any
company
We Know Your Industry
We have experience helping a wide variety
of business owners secure the right
financing solution
Fast & Easy Application Process
No-cost, no-obligation application with
funding in as few as 24 hours1
Trusted by Businesses Like Yours
Over $4.5 billion in funding to more than
75,000 businesses nationwide
Funding Specialists Who Care
Experienced Funding Specialists help you
make the right decision
High Approval Rates
Even if you’ve been turned down
elsewhere, there’s still a great chance we
can get you the business capital.
Hassle-Free Payments
We provide fixed terms and set up simple,
automatic payments3
Industries We Serve
Every business is unique. That’s why we strive to tailor financing options to the needs and the nature of your business. Over the years, we have provided loans to many businesses across multiple industries.
Small Business Loans for Trucking
Companies
Fuel your trucking business with loans
tailored for truck companies
Agriculture Business Loans
Grow your farming business to its
fullest potential with small business
loans
Construction Business Loans
Build your business to reach great
heights with loans from National
Funding
Restaurant Loans
Serve your customers better with loans
that serve your business
Gym and Fitness Center Business Loans
Get loans that work out the best for
your business with National Funding
Beauty & Wellness Business Loans
Give your business the best makeover
with small business loans
Working Capital Loans Resources
A working capital loan can help your business reach new milestones. You know you can use loan funds for inventory
purchases or to pay an unexpected tax bill. Working capital loans can also allow you to explore new marketing avenues
or upgrade outdated sales software. Explore the resources below to learn more about how business capital funding
can help you succeed.
What Is a Working Capital Loan?
A working capital loan adds to the money you have on hand
for your business’ daily needs. Funds from a working capital
loan can go toward things like payroll, rent, inventory, etc.
Sometimes, you’re waiting for receivables and suddenly
money is tight, and a personal business loan may be a good
solution. Check out this blog on the ins and outs of loans for
cash reserves. With business financing, you can make your
money work for you, and not the other way around.
Business Cash Reserves: How It Can Fuel Operations and Growth
There's a lot to consider when deciding how to use business
funds for your company. You need cash to keep your
business running and pay vendors. However, it's also
important to look at the future of your business and think
about investing in potential growth opportunities. By
knowing how you wish to use business capital, you can begin
to calculate how much you might need to reach your
business goals. This article can help you learn how to
determine your working capital needs.
Frequently Asked Questions
Finding the cash your business needs to pay bills or take on the competition isn't always straightforward. Like most
business owners, you probably have questions about loans and financing options. We put together some of the most
common questions about working capital loans to help you get the answers you need.
Is it hard to get a working capital loan?
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 hours1.
Does working capital include cash?
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.
What does “working capital” tell you?
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.
Can a working capital loan help me if my business is doing well?
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. can apply for business financing online. While some traditional lenders might still rely on old-school methods of processing your business loan, alternative lenders like Advance Funding make it easy for you to apply for a business loan from your laptops, smartphones, and tablets.
What is the difference between working capital and term loan?
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.
How do I apply for a working capital loan?
You can apply for a working capital loan by filling out an application form with basic financial information about your business. Apply for working capital business loan online from Advance Funding today.
Find Out How Much Funding You Qualify For
From equipment financing to working capital loans, we’ve helped business owners from many industries receive the
business funding they need. You’ll receive expert support and answers to your business lending questions while
working with a friendly Funding Specialist. Advance Funding is a trusted lending partner. You can rely on us to help
finance your working capital and growth.
Speak to a Funding Specialist
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Products offered by Advance Funding Inc. and affiliates are business products only. The products may be provided by third parties and subject to lender approval. In California, products made or arranged pursuant to a California Financing Law License.