Guide:

Working Capital Fast Facts

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Working Capital Fast Facts

Maintaining a steady flow of working capital is a vital part of ensuring your business’ long-term viability. Slow seasons, fluctuations in sales, and even positives such as rapid expansion can put a strain on your cashflow. Working capital loans can provide much-needed relief, serve as a key component of your overall financial strategy, as well as help you free up the funds you need to expand your fleet and grow the business. If you are considering applying for working capital assistance in the near future, follow our quick guide to ensure a smooth process.

heavy equipment financing

Working Capital Snapshot

While there are many different types of loans and financing options available for business owners, working capital loans are designed to fulfil a very specific purpose. These kinds of loans are meant to assist with the immediate financial variables that may be, or could in the direct future, place undue strain on your business.

Such variables include:

  • Payroll
  • Rent
  • Day to day/monthly costs (internet, web service, supplies)
  • Marketing
  • Inventory
  • And other soft costs (that are not typically covered by asset-based lenders)
Working capital loans should not be used for large capital purchases. The primary purpose of your working capital loan is to give you enough cash flow to cover necessary expenses like those above, while also having a cushion to proactively continue to grow your business and get back on a financially stable course.

When to Consider A Working Capital Loan

Acquiring a secure working capital source can be a fantastic protective measure for business owners who anticipate or are experiencing a seasonal fluctuation, those battling a sluggish sales funnel, and businesses experiencing a sudden growth ‘boom’ that demands additional resources sooner than later. Because cashflow is a universal requirement for all businesses, its best to keep the following in mind when deciding whether or not to apply:

1
Does this loan resolve my issue(s) within a short period of time?
2
Does this loan position my company financially to navigate the next 12 months?
3
Is this money going directly back into the business as opposed to an asset?
While having access to additional money can free up cash to take care of asset purchases you may need to sustain your business, if your sole reason for seeking a loan is new equipment, financing, fleet expansions and repairs, or using capital to otherwise fund your assets, a working capital loan may not be the best fit overall.

How to Apply/What to Expect

If you decide that moving forward with a working capital loan is a fit, you’ll want to keep the following in mind:

The application process will likely look different across different lenders both in the public and private sectors.
Organize the documents you need and have them ready to present to the lender.

While certain lenders will have unique requirements in terms of what historical documents and data they require, information on your current and past revenue as well as future projections and use of the funds, and any crucial details that affect your business’ revenue stream.

heavy equipment financing

How Quickly Can I Get Started?

As with most business financing, your lender knows that time is of the essence. Generally speaking, your lender will work to get things moving as quickly as possible during the financing process.

Some lenders are able to source capital for clients in as little as 24-48 hrs!

About Current Financial

Current Financial was founded by entrepreneurs for entrepreneurs. Our goal is to ensure that owners have access to the cash flow and working capital their business needs to thrive. To make financing more accessible for our clients, Current Financial provides quick, streamlined service that allows you focus on and in your business. With plenty of custom options available, our team of financial experts will help you find an equipment financing or working capital solution that perfectly suits the needs of your growing business.

Ready to get started? Apply now or contact our team for more information.

We are a team of entrepreneurs who understand the needs & challenges of building and growing a successful business.