As you run your business, you need money for several expenses, such as rent, paying your employees, and paying your utility bills and suppliers. However, sometimes you may have your bank accounts running low, yet you need to keep your company running. Working capital loans are among the best options you have. Such funding allows you to temporarily pay for your expenses when you are not fit financially. Getting a working capital loan is only reserved to help your business with short-term funding.

What is Working Capital

Working capital refers to the difference between the company’s current assets and its liabilities. For clarity purposes, assets include cash on hand, accounts receivable, and stock. Liabilities include accounts payable and any other debts that your business is supposed to clear within a year.

The Best Sources of Working Capital Loans

Here are some of the credible ways you can acquire working capital loans without so much hassle:

Merchant Cash Advancements

This is not a bank loan per se, but it is among the best options to get funds that will help keep your business running. The lender will recommend you use credit card payments in your business. This is because they will be deducting a few dollars daily until the loan, interest, and any charges are paid off completely.

SBA Loans

This type of funding will require you to prove you and your business have positive credit ratings before you get temporary money for your expenses. However, SBA loans may not be your best shot if you want to cater to your working capital needs urgently. The application and approval process for these loans takes some time.

Invoice Financing

If you send invoices to your customers after their orders have been delivered, you might experience some challenges with the cash flow in your business. This is where invoice financing, as one of the working capital loans, comes in and gives you a platform to borrow against unpaid invoices.

Line of Credit

This is where you borrow only the money you need for your daily expenses, pay it back as fast as you can, and acquire another loan from the same source. Running a business requires a constant cash flow. If your business is having trouble staying afloat, contact Increase Lending today to get all the financial help you require.