Working Capital Finance is business finance that is created for the purpose of extra capital available to a business. It is often used for particular growth projects, such as investing in a new market or perhaps even taking on a bigger contract.
Capital Finance can be used for a variety of reasons, but the primary goal is to use Working Capital Finance to free up cash for investment in the business, which will then be recouped in the near future..
If you have a business that accepts payments from customers using card terminals, then a Merchant Cash Advance is a useful way to increase your working capital. This product is literally a cash advance for merchants, businesses such as pubs, retailers, restaurants, cafes are all suitable.
The amount you are advanced is often a percentage of your average monthly card revenue, for example 120% of an average month, and repayments are taken as a percentage of future card revenue too. Meaning that the repayments will feel less painful because they are taken from the source.
Overdrafts have always been a very useful way of acquiring working capital finance for many businesses, but they are becoming harder to get with a business bank these days. The Alternative Finance market offers flexible business overdrafts, which are a great way to get the money you need fast.
Overdrafts tend to have low credit limits, which could limit your future plans. In essence,they are a form of unsecured lending, so even if you do get one, the limit is most likely going to be low.
Working Capital Loans tend to be over a short or medium term, for the purpose of boosting cash into the business in order to fund new projects. How much you can borrow will depend on many facets of your business profile.
Secured working Capital Loans will require you to use assets as security, so the amount you would like to borrow will be restricted by the assets you have available. With an Unsecured Business Loan, you can get up to £250,000 to help with working capital, however these loans will need to have an impeccable credit rating, and you might even have to give a personal guarantee.
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