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Working Capital Financing

Working capital or operating capital consists of funds on hand and in savings accounts that you can access anytime to keep your business operating smoothly each day.

Where Does Your Working Capital Go?

Working capital is typically used to pay for the following types of liabilities and expenses:

  • Taxes
  • Short-term debts or liabilities
  • Interest charges, penalties, and surcharges
  • Construction and remodeling for your office and other business locations
  • Purchase, repair, and maintenance of equipment, machineries, and vehicles owned and used by the company
  • Purchase of supplies as well as furniture and fixtures
  • Payment of salaries for regular and contractual workers
  • Payment of commissions, benefits, and other employment incentives
  • Maintenance of preferred inventory level
  • Advertising fees
  • Membership and association fees
  • Miscellaneous expenses

What Happens If You Don't Have Enough Working Capital?

A business' liabilities and expenses tend to be both fixed and variable in nature. This is precisely the reason why there is no true and certain way to determine the exact amount of working capital you will need each month.

In the event that your working capital proves insufficient for your needs, you could suffer from any or all of the consequences listed below:

  • Additional interest expenses and surcharges – Interest charges could compound month after month if your working capital budget is designed to meet it. Eventually, there's a chance that the money you owe in interest would be more than the money you initially borrowed and are paying interest for.
  • Inability to meet client demands – Certain businesses are required to maintain specific inventory levels in order to meet the orders of their clients any given day. This, however, could prove improbable if you do not have the working capital needed to regularly replenish your stocks.
  • Lower employee productivity and morale – This is a typical result when you are unable to pay your employees on time and the total amount you owe them. Even the most understanding of employees would be affected if you allow this to go on for more than a month.

    They have their own living expenditures to worry about just like you do. They, too, would be charged with interest and late surcharges if they are unable to pay off their loans in time and because of your delay with settling their salaries. They can't very well tell the bank that it's your fault and leave it at that, can they?

    It would be hard for your employees to remain inspired at work when they and their loved ones are sinking in debt and suffering in other ways because of the delay in their salaries.

  • Other productivity problems – Working capital is also used for repairing and maintaining equipment and machinery required by your company to manufacture products. If you do not, however, have the money to see to its regular maintenance, then there could be days that no work could be produced simply because your machines are out of order.

Contact Us Today for a Working Capital Cash Advance.

Just complete the application form we have provided here in our website and you can expect a call from one of our representatives within 24 hours.

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