Working Capital
One measure of the health of a business is its working capital. Having too little working capital is a recipe for disaster, even if you’re wealthy in assets. Make sure your business has enough liquidity to meet daily operational needs by putting working capital financing in place today.
What is Working Capital?
Put simply, working capital is the difference between your company’s current assets and current liabilities. It can also be measured as a ratio of your assets divided by your liabilities for one year. A working capital ratio close to two is the standard for most industries. Less than two is an indication of trouble in the near future. More than two can suggest you aren’t using your cash flow as wisely as you could be.
The good news is that it’s easy to adjust your working capital if you address it right away. If you have excess cash, look for ways to reinvest into new profit channels. When you’re low on working capital, we can solve that too. Financing for working capital comes in many forms from various lenders. Banks, private lenders, and the SBA are all sources you can tap into to open up cash flow. Let us show you how to solve your working capital challenges today.
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Lines of Credit
Banks and private lenders offer business lines of credit, but not all financing options are created equal. We can help you open a line of credit that’s there when you need it and that balances cash availability with credit term. Smooth out revenue cycles, handle unexpected bills, and plan for emergencies with a working capital line of credit.
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SBA 7(a)
The Small Business Administration encourages lenders to take a second look at small for-profit companies in the United States through federal backing for small business loans. If your business makes less than $5M in annual revenue, the SBA 7(a) loan could be the right tool for you. Find an SBA-certified lender with the help of our expert brokers.
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Factoring
Factoring works when you have expenses that need to be met, but you need clients to pay their invoices first. Sell those invoices to bring in cash now and quit waiting around for slow-paying customers. Invoices, purchase orders, contracts, and other accounts receivable can be factored to generate working capital.
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Purchase Order Financing
When you receive a purchase request that is greater than your usual buying capacity, how can you field the request? With PO Financing you can fulfill the demand, demonstrating your capacity and setting the stage for bigger sales and greater revenue. PO financing can be funded through multiple financial instruments. The real question is which one is right for you?
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Open-to-Buy Financing
Retailers rely on flexible open-to-buy dollars, but what do you do when your cash is tied up in current inventory, hard assets, payroll, and other expense categories? OTB financing can come in as a fixed or revolving line of credit, a one-time advance on future sales, or as a loan leveraged against fixed assets. When you’ve identified product that is ready to move, now is the time to act! With OTB financing, you are ready.
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F.A.Q.’s
Q. Why do I need working capital?
Every business needs working capital to handle everyday needs like utilities, payroll, and supplies. Without it, you could end up firing valuable personnel, turning away new clients, and damaging your business credit.
Q. When is working capital financing not a good fit?
Working capital financing is meant to cover the daily needs associated with operating your business. If you’re taking on a new real estate investment or buying valuable equipment, there are loans tailored to meeting these large expenses. We can help you decide when a working capital loan is right for you.
Q. Why go to a broker for working capital?
A broker is the smartest tool you can use when you’re looking for a working capital loan. The SBA doesn’t service its loans directly. Banks and private lenders will only show you the loans they provide, not the competition’s. A qualified broker can show you competing loans side by side and help you find the right lender for the job. They also have relationships with lenders that take years to build.
Q. What are examples of working capital?
Cash, cash equivalents, and other highly liquid assets are all examples of working capital. Marketable securities like bonds, stocks, and mutual funds can be included too. Long-term investments like real estate and vehicles don’t count as working capital because they can’t be turned into cash quickly.
Use it when you need it.
Borrow again without another application.
Get funding even if lenders have refused before.
Leverage your current assets to get cash.
Borrow again without another application.
Get funding even if lenders have refused before.
Leverage your current assets to get cash.
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We find capital sourcing for hard-to-finance industries. Our brokers eliminate the need to chase lenders who don’t understand your vision.
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