Working Capital Loans

Last year we placed $43 Million in businesses just like yours.

Working Capital: business's life blood.

Many businesses focus on the obvious parts of business to make more money but many of them fail to make money and even fail simply because they have not adequately managed their working capital. Working capital management is an important part of any business operation. You need to know what assets you have and what they are doing for you and how you can use them in different ways to produce more revenue. Assets that do nothing are probably only leeching funds from your accounts and assets that are not being utilized to their full extent is essentially being wasted.

Working capital is essentially the difference between the assets that you have available and the liabilities that you currently have. If this is a positive figure then you have available working capital that can be placed back in the business to help you make more money. Working capital does not just have to be liquid assets but can include inventory and equipment in the office. Even if you have working capital but you are not able to liquidate that capital into something useful then you also need to take a look at what you business is doing. Many businesses struggle with their working capital for a number of reasons.

One way to increase your working capital is by shortening your business' operation cycle. This means shortening the time between the moments you take money from your accounts to help a client and the moment that the client pays you. Invoice your clients as soon as possible to get the money that you are writing down as profit margin into your account so you can put it to good use. Closely linked to this is the collection of old debts and accounts. People always try to stretch out paying the bills as much as possible but for a business that is looking for more working capital this is not acceptable. If you have invoices that are more than 60 days old then you need to do something about it. Even 30-day-old invoices should already be in the process of being checked by staff to get the money owed to you into the account.

While it may seem cruel, keeping staff around that is not always necessary is not a good way to increase your working capital. In these cases it might be wiser to outsource what is necessary to another company. While you may have to pay a bit more to get the job done you save on compensation and insurance. The same applies to inventory. Inventory may be an asset that adds to your working capital but inventory that simply sits in the warehouse is simply eating away at the money in your account. If the inventory is not doing anything, get rid of it or make it do something!

Working capital can help a business succeed and lack thereof can make it fail. By plunging the working capital back into the business the business can grow and expand. By managing your working capital strategically you can ensure that your business will grow and will be able to survive and economic upheavals that may come your way.