Having adequate working capital is essential for the operating health and growth of every business. However, sometimes there just isn’t enough available capital. A great solution is a working capital loan. 

Why is Working Capital Important? 

Working capital is simply the difference between current assets (cash, accounts receivable, and inventory,) and current liabilities (accounts payable, wages, interest, and taxes payable.) With positive working capital, a company can deal with fluctuations in revenue, meet all its current obligations, and invest in ways that will fuel future growth. A working capital loan can provide the needed funds to keep a business on track with its goals. 

What Are the Types of Working Capital Loans? 

A working capital loan can be secured from these sources: 

A conventional term loan, provided by a bank or credit union.

Repayment terms can be as short as a few months up to 25 years, with varying loan amounts and interest rates.  

An SBA loan.

This type of loan can be obtained through a bank or credit union that has partnered with the SBA. Terms and interest rates are generally more favorable than conventional loans.  

A business line of credit.

This type of loan provides revolving access to a certain amount of funds. Which can be used and replenished during the term of the loan as payments are made against the borrowed amount.  

Alternative loans.

These can be available through online lenders and financing specialists.   

Other resources for securing working capital are invoice factoring, an equipment loan or lease financing, trade credit, and personal financing, including a home equity (HELOC) loan. 

How to Get a Working Capital Loan 

First, examine your borrowing needs. Second, make sure you have good credit scores. Third, research and evaluate lenders. Fourth, gather the needed documentation. And fifth, apply for a loan. 

Seek Professional Financing Assistance 

Contact Skogen Capital Lending for tailored solutions to meet your business needs. We provide a wide range of options to provide the best financial solutions possible.