Every business, no matter how successful, can benefit from having extra cash flow. Whether new project opportunities arise suddenly or you need to quickly secure funding for an unexpected project, a working capital loan can help with a business’s day-to-day operational costs. And oftentimes even help your business scale.
What Are Working Capital Loans?
A working capital loan is exactly what it sounds like. Working capital that’s loaned to businesses for operating costs. Working capital loans infuse your business with immediate, short-term cash that’s not pulled from your business assets. This funding can be used to cover your everyday expenses so that you can prioritize business growth.
Benefits of a Capital Loan for Your Business
A working capital loan, when planned for properly, provides businesses with several benefits.
Be Prepared for Opportunities
Today, opportunities for your business can arrive at a moment’s notice. When these opportunities come to you, it’s best to be prepared. A working capital loan provides you with cash flow for short-notice opportunities like:
- Vendor discounts for bulk inventory purchases
- Purchasing materials for jobs and projects
- Investing in your marketing efforts
Extra Cash for Business Expenses
In addition, capital loans can help cover cash-flow shortages during slow business months and seasons. Or provide funds to keep up on operating costs if customer invoices are taking longer to process than usual. While late invoices are always inconvenient, having extra cash from a capital loan enables you to fund obligations to suppliers, utility bills, or payroll without missing your own payments.
Hire New Team Members
As your business grows and the needs of clients and customers change, so should your business’s team expand to meet those needs. While small business owners often find themselves wearing multiple hats and running the show by themselves, at a certain point, hiring new team members saves business owners their time, and their businesses money. And, with additional staff, your business is likely to be more productive. This means increased revenue, more efficient project management, and a better experience for your clients. Not to mention you can prioritize other parts of your business with a team handling the day-to-day.
Since business owners tend to put off hiring new employees because they lack the capital, a working capital loan can act as a solution.
Upgrade Equipment or Renovations to Commercial Space
After a while, the current equipment you use to complete projects or provide service to your customers is going to need replacing. Additionally, your business can quickly outgrow its original commercial space. A working capital loan provides you with the financial means to optimize your operational foundation for the needs you have right now.
Things to Consider
Although a working capital loan is a powerful financial tool for your business, there are things you should keep in mind about using them.
For one, a working capital loan is best used for short-term working capital needs as opposed to longer-term requirements. In addition, you should have a clear idea of your repayment process before securing a working capital loan. It’s always wise to have accurate projections of future revenue, and plot your month-by-month inflows and outflows so that you understand your business needs.
NTIB Finance & Consulting: Helping Your Business Secure Working Capital Loans
At NTIB, we have a strong lender we can connect you with for a working capital loan. Your NYC business may be eligible to receive up to a $500,000 loan with 3 to 5-year terms. No mortgages or equipment liens will be posted. Our process is fast and simple, and once approved, your loan will likely be funded in less than 3 weeks.
Schedule a free consultation with us to learn more.