Working Capital Loans for Small Businesses
Propel your business forward with access to working capital in as fast as 24 hours
Ready To Move Your Business Forward?
How to Use Your Working Capital Loan
Your working capital loan from National Funding can be used to cover everyday business costs, from purchasing raw materials and inventory to covering expenses like payroll while you wait for customers to pay. Working capital loans can even be used to pay debts and bills, including utilities and insurance premiums, and they can cover short-term investments that you plan to sell off within the year.
Outside of purchasing long-term assets and real estate, you'll have the flexibility to use your working capital loan for numerous purposes to keep your day-to-day operations running smoothly and help your business thrive.
Ways to Use a Working Capital Loan
Designed for short-term business needs, there are many ways you can use your working capital loan from National Funding. Some business owners use it when cash flow is tight, while others use the financing to cover unexpected costs like damaged inventory that needs replacing or equipment that requires emergency repairs.
Working capital loans can also cover payroll when there's a seasonal lull and sales didn't meet their goals, or when sales have exceeded expectations and you have the perfect opportunity to expand. Most short-term business needs are covered with your working capital loan from National Funding. Here are a few of the most popular uses.
Hire More Staff
- Hire new employees to support your business growth
- Make sure payroll is covered so your workers are paid on time
Finance Equipment
- Replace outdated equipment with newer models for your business
- Cover the cost of equipment maintenance or repairs
Add Inventory
- Introduce new items, product lines, or services to drive revenue for your business
- Stock more best-selling items during your peak sales seasons
Manage Cash Flow
- Maintain daily operations even through gaps in cash flow
- Continue running your business seamlessly during seasonal lulls
How to Apply for a Working Capital Loan
To apply for a working capital loan:
- Determine the amount of financing you need.
- Fill out the form on this page completing all necessary fields.
- Submit your recent bank statements.
- A Funding Specialist will reach out to you with any questions.
- Receive a decision quickly.
To determine the amount of financing you need, you’ll want to create a list of the expenses you’ll be covering. If you’re expanding, expenses could include a new lease, additional staff, more inventory, and new machinery.
Next, look at what you can use from your cash reserves and what you can put up for a deposit. Add up the total planned expenses and subtract that from the amount you can cover with your current finances, and this is what you need for your working capital loan.
The last step is to gather your financial and business information, including tax returns and income statements, as these will help to determine your eligibility for financing.
How Does a Working Capital Loan Work?
When business owners apply for a business capital loan, the lender examines their personal & business credit score along with their financial statements. Based on the lender's loan qualification criteria, the application can be approved or rejected.
Once the application is approved and the loan terms are laid out, the business receives the working capital loan either as a lump sum amount or a revolving credit depending on the lender. Remember that working capital loans are essentially short term loans so they need to be repaid within 12 to 18 months in general (depending on the loan agreement). The payment frequency can be daily or weekly as per terms printed on the loan document.
Here’s how working capital loans work with National Funding:
Fast & Easy Application Process
No-cost, no-obligation application with funding in as few as 24 hours1
Helpful Loan Guidance
A Funding Specialist will contact you to help you choose the right business financing option.
Quick Decision, Fast Funding
You could be approved, and funds deposited into your account, in as little as 24 hours.1
When Should Your Business Consider Working Capital Loans?
In general, a small business owner seeks working capital loans when they are short of cash flow and struggling to keep the business running on a daily basis. To know if your business needs a working capital loan, you must first calculate the company’s working capital on hand.
Calculating Working Capital & Working Capital Ratio
You can find your business’ working capital by deducting the current liabilities from current assets.
Working Capital = Current Assets - Current Liabilities
Current Assets include cash on hand, accounts receivable, short term investments, inventories, and so on. On the other hand, current liabilities include existing debt, account payable, employee wages, and income tax owed. If your working capital is too little or in negative, your business could definitely use a cash flow boost with a working capital loan.
Another way to comprehend if you need working capital loan is by calculating the working capital ratio.
Working Capital Ratio = Current Assets ÷ Current Liabilities
If your working capital ratio is equal to 1 or less than 1, it indicates the lack of cash flow, which can be resolved through a working capital loan.
Types of Working Capital Business Loans
SBA Loans
SBA 7(a) loans are backed by the U.S. Small Business Administration and can be used as working capital loans to cover payroll, advertising, marketing, and stocking inventory. The SBA 7(a) is harder to get approved for because of the demand, so if you don't get approved try a traditional short-term working capital loan.
Short-Term Loans
Our short-term loans for working capital provide quick approval decisions. Funding can be deposited in as fast as 24 hours1, which is important if you need the working capital loan for fixing equipment or to cover payroll quickly.
Make Working Capital Work for You!
A working capital loan provides a quick and easy way to achieve your business goals. If your business needs access to business funding for short-term or long-term planning, a working capital loan can help you get there. Working capital helps cover financial shortcomings until business can stabilize and gives access to funds for critical payments to maintain regular operations. Working capital loans can be customized to your unique business needs. With experience in almost every industry, National Funding provides highly tailored financing solutions to meet your specific business goals.
Be Better Prepared for the Future with More Capital
The cash reserves make your business better equipped to manage growth opportunities and see long-term success. Plus, you won't have to stress during seasonal slumps, as you'll have funds available to pursue your goals in any business situation.
Maintain Ownership of Your Business
While traditional equity investors typically require a percentage of your business in exchange for funding, you remain in control with a working capital loan. You still call the shots, make the decisions, and stay your own boss, which is why small business owners prefer our working capital loans when compared to working with equity investors.
Provides Financial Flexibility
A working capital loan can be used how you see fit to support your business. This includes paying employees, purchasing equipment, paying bills, and more. No matter your financial needs, a working capital loan from National Funding provides flexibility to help you with all your short-term business needs.
What Customers Are Saying
Cheryl Dailey, Owner
Master Handyman, LLC
Focusing its business on providing handyman services to commercial enterprises in Cleveland, Master Handyman looked to secure a working capital loan to cover key expenses and allow them to hire new staff to foster growth. They wanted “real employees, not just day laborers”, and working with National Funding gave them the cash resource they needed to make it happen.
Craig Hart, Owner
Smyth Electrical Services
As the business entered a period of expansion, having the reliability of available cash was critical to alleviating the stresses that growth can cause. Being able to rely on National Funding’s small business loans was the peace of mind that help the head of this small business rest easy.
Why National Funding?
We have experience helping a wide variety of business owners secure the right financing solution — funding for any company
We Know Your Industry
We have experience helping a wide variety of business owners secure the right financing solution
Fast & Easy Application Process
No-cost, no-obligation application with funding in as few as 24 hours1
Trusted by Businesses Like Yours
Over $4.5 billion in funding to more than 75,000 businesses nationwide
Funding Specialists Who Care
Experienced Funding Specialists help you make the right decision
High Approval Rates
Even if you’ve been turned down elsewhere, there’s still a great chance we can get you the business capital.
Hassle-Free Payments
We provide fixed terms and set up simple, automatic payments3
We Know Your Industry
We have experience helping a wide variety of business owners secure the right financing solution
Fast & Easy Application Process
No-cost, no-obligation application with funding in as few as 24 hours1
Trusted by Businesses Like Yours
Over $4.5 billion in funding to more than 75,000 businesses nationwide
Funding Specialists Who Care
Experienced Funding Specialists help you make the right decision
High Approval Rates
Even if you’ve been turned down elsewhere, there’s still a great chance we can get you the business capital.
Hassle-Free Payments
We provide fixed terms and set up simple, automatic payments3
Working Capital Loans Resources
What Is a Working Capital Loan?
A working capital loan adds to the money you have on hand for your business’ daily needs. Funds from a working capital loan can go toward things like payroll, rent, inventory, etc. Sometimes, you’re waiting for receivables and suddenly money is tight, and a personal business loan may be a good solution. Check out this blog on the ins and outs of loans for cash reserves. With business financing, you can make your money work for you, and not the other way around.
Business Cash Reserves: How It Can Fuel Operations and Growth
There's a lot to consider when deciding how to use business funds for your company. You need cash to keep your business running and pay vendors. However, it's also important to look at the future of your business and think about investing in potential growth opportunities. By knowing how you wish to use business capital, you can begin to calculate how much you might need to reach your business goals. This article can help you learn how to determine your working capital needs.
Frequently Asked Questions
Finding the cash your business needs to pay bills or take on the competition isn't always straightforward. Like most business owners, you probably have questions about loans and financing options. We put together some of the most common questions about working capital loans to help you get the answers you need.