Almost half of all small business owners who seek financing for their companies choose working capital loans.
Why? Because these loans let entrepreneurs like you easily get your hands on money to cover short-term needs. For instance, you might be going through a slow season and need some extra money to pay bills right now.
As long as you know for certain that sales will pick up in a couple months, obtaining a loan is easy and convenient. Is it worth the hassle, though?
Keep reading and we’ll explain why it is.
You Need Working Capital
Working capital refers to the money you keep on hand to cover basic expenses. Think monthly bills, employee paychecks, inventory supply and even unexpected emergencies.
A lack of working capital puts you at risk of financial insolvency. In fact, all business bankruptcies start with a prolonged reduction in working capital. It’s not from seasonal changes, but rather from a permanent decline in sales.
The simple fact is you need working capital to keep your business afloat. So if you’re low on money but know for sure more money will flow in later in the year, there’s no reason to not seek a loan.
You Get to Keep Ownership
Instead of seeking out a loan, some business owners look to investors for working capital. While this potentially means access to larger sums of money (especially if you pick up a “Shark Tank” investor), it also means a loss of equity.
With working capital loans, you get to retain full ownership. The only stipulation is that you repay the money within a set period of time.
You Don’t Necessarily Need Collateral
If your business has a good credit rating, which any successful business should, you may get working capital loans without putting up any collateral.
Otherwise, we need you to put up your business, your inventory or your home to prove your reliability. Though this sounds scary, keep in mind that so long as you repay the loan, it’ll improve your credit rating.
You Don’t Have to Wait
Unlike conventional loans, working capital loans tend to be processed fast. On average, business owners must wait only a week after applying for a loan to receive it.
Some providers like us at Formula Funding even offer same day approval, assuming you meet our requirements. Or, in case you don’t, you can earn our trust over time.
You Get a 24/7 Line of Credit
If you get a working capital loan and repay it a couple times, it proves your trustworthiness. Many providers, including us, reward this dependability with quicker turn-around times and bigger loans.
If you stick around long enough, these loans wind up becoming a 24/7 line of credit minus a bank. Some providers even lower the interest rate the more you prove yourself trustworthy.
Get Working Capital Loans Today
Combining a high level of personalized service with a cutting-edge lending platform, Formula Funding delivers an unparalleled banking alternative. We offer a fast and efficient option to get your business the critical funding it needs without the red tape. We work with all credit grades, tax liens, judgments, and charge-offs – something unheard of at a traditional bank. Since 2010 over 15,000 small business owners have used our funding sources to grow and expand.