No matter what type of industry your business is in, at some point in time, during their operations they require short-term working capital. For instance, retailers require working capital to pay for the seasonal inventory throughout holiday season. Small businesses may also require working capital for many other things such as: updating old products, services, keeping up with competition, work space, or recuperating from a natural disaster.
Therefore frequently, small businesses may not have the money they actually need to develop in hard economic times and often fall short. Working capital loans are particularly designed to offer businesses with the capital they need to keep their business running. These capital loans have saved many businesses from financial distress because generally a quick infusion of cash is all they need.
- Quick Cash
Unlike the conventional banks where it can take weeks or even months to get the funding, working capital loans from alternative lenders are exceptionally quick. As the approval process of working capital loan is so efficient (generally it takes only 1 business day), the funding often takes place in 3-5 business days from the time of approval.
- Easiest Application
You’d consider a loan application would be lengthy and exhausting. The good thing is that only a 3-step online loan application is all it takes to apply for a working capital loan. You will be asked some questions by your lender which includes the type of merchant, business owner name(s), percent of ownership, amount you are requesting for, and your business addresses and phone numbers.
- No Collateral Requirement
Collateral is an important asset this is pledged by the borrower as a way to guarantee the loan repayment. Loans from the conventional source such as banks require some type of collateral of valuable assets such as your home or car. In case the loan isn’t reimbursed, your possession on the provided collateral will on the line. Working capital loans from non-bank lenders don’t require collateral. Instead, your business’ previous and expected sales are observed. Your monthly cash flows are taken into consideration more than collateral.
- Use The Money How You’d Like
In contrast to conventional loans from the bank, which have intense restrictions, you’re able to use working capital loans however you deem fit. Working capital loans can even be used to pay your taxes, payments and late invoices. Working capital loans are easily accessible for unexpected sales tax payments and payrolls as well. Grab new profitable business opportunities or launch a new marketing campaign.
- The Terms Are Short On Working Capital Loans
As working capital loans are used for a quick capital infusion, they also come with short terms ranging. In this way, you get what you actually need, and are not troubled with long-term obligations or contracts. Well obviously who wants to be stuck repaying a loan 3 years later? With easily manageable shorter terms, it is easier to meet the requirements and make sure to take into account that the shorter the term, the less interest rate you will pay!
- Credit Rating Isn’t A Priority
Having a very good credit rating is remarkable, and it’ll in your favor when applying for a working capital loan. But don’t worry if your credit rating is imperfect. As mentioned above that the qualifying for a working capital loan is based on your cash flow. Lenders mainly consider your ability to pay back the loan as you currently stand.