Working capital is at the heart of every business’s survival and growth. 

Why is Working Capital Important? 

Working capital describes the funds that are used to pay for day-to-day operations and meet other short-term obligations. Without working capital, a business simply cannot function. 

What Are the Components of Working Capital? 

Working capital is the difference between a company’s current assets and its current liabilities. Current assets include cash, marketable securities, accounts receivable, and inventory. Current liabilities include accounts payable, accrued expenses, notes payable, and any current portion of long-term debts. A company with positive and adequate working capital is said to be liquid and healthy. At least in the short term.

What Are The Sources of Working Capital? 

The sources of working capital include: 

• A short-term commercial loan, secured from a traditional bank or credit union.  

• An SBA loan, backed by the Small Business Administration and provided through one of its partnering lending institutions. SBA loans generally offer more favorable interest rates and repayment terms compared to traditional term loans.  

• A business line of credit. This provides funds up to a specified credit limit and the borrower only pays interest on the amount of money that is drawn. Ultimately, this type of funding offers greater flexibility compared to a term loan.  

• An equipment loan can be used. Freeing-up cash for other purposes, with the equipment itself serving as collateral for the loan.  

• Invoice financing can be used as collateral for a cash advance.  

• Invoice factoring involves selling invoices to a factoring company in exchange for cash.  

• For businesses that do a large percentage of their business in credit or debit card sales. A merchant cash advance simply provides funds against future card sales.   

Other sources of working capital include online lenders, alternative lenders, and financing specialists. 

Seek Expert Funding Assistance 

Contact Triport Lending to get the funding you need from a trusted commercial finance company. We offer a wide range of financial solutions to help you operate and achieve your dreams.