Working capital loan

Working Capital Loans – A Great Way to Manage Business Cashflow

Few ‘vital signs’ of a business reveal more about the growth than the health of cashflow. Meticulous management of cashflow is essential to the success of every business. If you are running a business, especially a small or medium sized one, there’s usually not a lot of room for error when it comes to managing the working capital. It’s difficult enough raising the working capital as it is, and unforeseen expenses as well as unexpected opportunities don’t make things any easier.
A working capital loan has all the potential to help your business tidy up the cashflow in such cases.

What is a Working Capital Loan?

A working capital loan is a business loan that aims to solve the problems of cash shortfall. In this sense, such loans are quite similar to bridging loans.

No business is immune to cash crunches. Any number of reasons, or combinations thereof, can lead to your incomings falling short of your outgoings. You can’t, however, let the day-to-day operations of your business take a hit because of such cash crunches. A working capital loan not only provides the cashflow cover in situations like these, but it also lets you have enough time at your disposal before you have to repay.

Are Working Capital Loans the Same as Business Cash Advances?

It’s true that working capital loans and business cash advances serve the same purpose of making more cash available to the borrower. However, it is not quite correct that both these business loan products are one and the same.

The most prominent difference between the two is the fact that you will have to settle a working capital loan like any other loan. On the other hand, a business cash advance settles itself through a sales portal, for example credit card sales.

Features of Working Capital Loans

Working capital loans are, at their core, business loans. So, they bring with them all the major features that other business loans do. In addition, there are some specific features that make working capital loans an attractive proposition for businesses.

Ease of Access

It’s much easier to secure a working capital loan than, say, a generic business loan. Applications for working capital loans are usually screened by lenders on the basis of credit history and business profitability. So, if your business has good standing on these fronts, you can find many matching loan offers.

Loan Term Flexibility

It needs to be understood that working capital loans are essentially short-term loans. So, the flexibility of tenure associated with them is relatively lower. A typical working capital loan is termed over 6-18 months.

Size of the Loan

Working capital loans are not meant to help your business acquire properties or purchase expensive assets. Hence, the loan amount you’ll get as temporary working capital will be correspondingly smaller. Our diverse range of lenders can help you get a working capital loan of typically up to £300,000.

Convenient Repayment Options

Unlike other small business loans, a working capital loan can be settled in a number of ways. From the age-old direct debit method to selling the receivables to the lender in advance, these options provide the advantage of convenience to the borrower as well as the lender.

Why Businesses Need Working Capital Loans

The reasons to get a working capital loan vary widely from one business to another, but the most common are:

• Settling personnel costs
• Funding smaller purchases
• Fulfilling orders
• Arranging for the deposits to secure newer business contracts
• Securing market opportunities
• Financing growth-oriented projects
• Tidying up cash accounts

A Working Capital Loan That Best Fits Your Requirements is Right Here!

Choosing the best financing tool for your business can be quite a task. Negotiating with the banks or other lenders makes things even more challenging – especially for smaller businesses. If you find yourself in this position, Commercial Finance Network has you covered. Our working capital loan solutions have helped countless businesses like yours deal successfully with cashflow problems. We collect the most affordable business loan quotes from the best lenders across the UK, so that you never have to get into an unfair loan agreement. Contact us today to speak to our Business Loan Experts, or request a call back!