Consider Working Capital to Finance Your Business » Bizfly Funding (2024)

Many small business owners and operators get very involved in the day to day challenges of running the business that they ignore longer-term cash flow and working capital needs.

Others are unsure or uncomfortable working with finance, or don’t know where to obtain additional capital for their business needs. But considering working capital for small business financing is critical. We’ll explore more about this important topic in our guide below.

First, it’s important to understand what working capital actually is. In business, it’s formally calculated on the balance sheet as what’s left when you deduct current liabilities from current assets.

Current assets typically include cash, inventory, cash equivalents, and receivables, whereas current liabilities typically include short-term loans or debt, cash terms and discounts, and payables.

Many businesses (especially larger and publicly-traded businesses) have to report their working capital to their investors or shareholders.

It’s seen as a measure of the business’ financial health and capabilities, whether or not there are debt issues upcoming, and whether plans for expansion, growth, or opportunities can be realized.

While small businesses may not have these same reporting requirements, it’s still an important practical measure of ability, efficiency, and business health.

Working capital for your business is important for many purposes. Cash flow and working capital management are essential for most goods and services businesses. You need working capital to place purchase orders, buy materials or goods, and pay employees and vendors.

There can often be a significant lag time between when an order is placed, and capital outlaid, versus when that piece of inventory or investment in a service returns a profit from a customer.

Working capital is essential to bridge this gap, and allow for the day to day operations of the business. Working capital can become impaired when too much is tied up in inventory, accounts receivable, and short-term debt repayments.

When this happens, the business can run out of cash or equivalents and find it impossible to manage cash flow. This causes business activities to grind to a halt – you can’t make new purchases, pay your vendors or suppliers, and so on.

While selling assets to generate additional cash is possible, it’s not always practical, and not always possible in the kind of quick, timely manner necessary to avoid late fees on bills or default on loans.

Therefore, having adequate working capital is essential to a healthy business and its ability to function.

• Better cash flow management, with a sufficient buffer to manage the difference between cash going out and cash coming into your business
• The ability to respond to changes in the business environment or economy, including to survive economic downturns or lost sales
• Working capital can provide the funds needed to pursue new opportunities, expanded business, and potential growth that otherwise may be missed
• Having sufficient liquidity to pay off debts, and maintain a solid credit rating, to enable more borrowing when needed
• Demonstrating solid financial health to investors and shareholders

There are several sources of working capital for your business. The ability to access these sources, though, can vary a great deal. Many industries are considered high risk, and are not able to qualify for traditional working capital financing from various banks or financial institutions.

Small businesses, and those who haven’t been in business very long, or who don’t have multi-million dollar accounts receivable also struggle with traditional working capital financing options.

Revolving credit facilities can be valuable, but, again, qualifying for them can be a challenge for many small businesses. And even if you are approved, a lot of working capital options can require collateral or other risk on the part of the business owner.

Fortunately, short term small business loans or working capital loans are available. They’re ideally suited for small business funding, and offer the kind of buffer that small businesses need to manage their cash flow and perform day to day business operations.

These kinds of short term business loans can vary in amount, repayment terms, and so on, but generally are highly flexible to suit a business’ specific needs. And the vast majority of them are unsecured, meaning there is no collateral requirement, and limited risk to the business owner.

One of the top working capital lenders for small business funding in the US today is BizFly Funding.BizFly Funding offers short term small business loans, in a variety of different formats, lengths, and amounts. These can all be used for working capital for your business.

The loans are unsecured short term business loans, meaning there are no collateral requirements. Interest rates are, naturally, higher than secured loans, but in general are highly competitive, and lower than the rates you’ll find with many other lenders.

More small businesses choose BizFly Funding because of our relatively few qualification requirements. We keep our loan qualifications as simple as possible, in order to service as many small businesses as possible.

We look at several factors when considering approval of your working capital loan, including the age of your business, revenue, credit score, and other data points.

This enables us to make an informed and fair lending decision, and provide our services to a greater range of customers, including those in traditionally “high risk” industries.

The net result is that many small business customers who cannot secure small business funding from traditional banks or lenders can, in fact, qualify for a working capital loan from BizFly Funding.

What’s more, the process of working with BizFly Funding for your working capital loan and cash flow needs is quite easy. You can apply online, and one of our staff will review your information, be in touch, and approve your application in just hours.

Often, funds are available for our small business funding customers within 24 hours following approval.BizFly Funding has successfully helped small businesses from over 100 different industries and sectors get the working capital funding they need to operate, grow, and succeed.

Contact BizFly Funding today to learn more about short term small business loans and working capital loans to help your business soar to new heights!