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Short term funding allows business owners to react quickly to secure opportunities and contracts or to bridge cash flow shortages.
What are Working Capital Loans?
‘This term is used to describe a collection of lenders and products designed to help with short term cash-flow solutions’
A working capital loan is a loan that has the purpose of financing the everyday operations of a company. Working capital loans are in most instances used to cover working capital expenses such as, accounts payable, wages, etc. Companies that have high seasonality or cyclical sales cycles often utilise working capital loans to help with periods of reduced business activity.
These are usually designed to work similarly to an overdraft, giving you flexible access to cash when you need, and only paying for the amount you borrow.
Some newer Lenders on the market have online accounts where you draw down and pay back and are charged monthly on the amount you borrow that calendar month. This type of product can be perfect for most businesses.
Businesses use working capital loans for a variety of business purposes, it can be seen as a working capital ‘bridge’, to help secure immediate investment, or cover a bill whilst waiting on invoices etc. It gives business owners valuable breathing space, with added flexibility, when needed most.
- Facilities from 1mth to 5years
- Monthly Interest Rates
- Some offer daily, weekly or monthly repayments
- Secured and Unsecured options
- Bridging Products available - Pay nothing for 18mths
- Rates from 1.1% - 6% per month
- Great for short term borrowing
- Most popular type of lender, meaning the competitive space can result in cheaper options by shopping around