14 Ways To Use Working Capital Financing

Working capital is the money made readily available for the day to day running of an enterprise. Adequate working capital and sufficient cash flow are critical even for companies with multi-million dollar assets. It is important to note that many financial institutions offer little or zero access to loans for small to mid-size businesses because of the perceived high risk. ViewRidge Funding is a great alternative to banks because they provide loans for small to medium-sized companies that need business financing with little paperwork. This financing helps small business owners to grow their business in numerous ways, from marketing to hiring new employees to purchasing inventory.

Below are fourteen ways business can use working capital financing.

1 – Manage Cash Flow

Working capital financing helps cover necessary operating finances during periods when your business experiences a cash flow crunch. Whether you need to meet payroll, keep the utility running, or pay your rent or mortgage, this capital helps cover the ebbs and flows.

2 – Bridge Payment Delays

Working capital funds can help to bridge the gap when customers are late in paying their account. Overdue account receivables especially, when over 30 days past due, can make it hard to stay current on payments. Small companies also struggle when they have to pay for seasonal inventory that may not be purchased for a few months.

3 Purchase Inventory

Having the capital can give a business owner the opportunity to take advantage of special pricing or discounts for early payment. Similarly, you need cash to be able to purchase a new product in business, restock inventory, and buy additional stock to fill future orders.

4 – Update Equipment

Working capital loans or equipment leasing can provide the funds needed to acquire a good deal of new equipment that will have long-term benefits for your business without impacting your present cash flow.

5 – Pay Seasonal Expenses

For everybody who is in a seasonal business, restocking products and employing short-term workers before the hectic season can be challenging. Working capital loans are ideal for covering these annual expenses as well as increasing your pre-season selling to bring in more income.

6 – Cover Seasonal Shortfalls

Seasonal small companies experience slowdowns in cashflow and when access to working capital is limited they can struggle to stay open. Finding a solution for business funding is a useful tool to make sure your cash flow continues during the off-season. A working capital loan enables your businesses to cover ongoing expenses such as rent, insurance, taxes, tax debt, utilities, and wages.

7 – Launch a Marketing Campaign

The old say – you have to spend money to make money rings true when it comes to marketing your business.  Working capital loans are used to cover other return on investment opportunities such as signage, direct marketing campaign, increasing business online presence, launch a new marketing campaign, or expand an existing one.

8 – Hiring and Employee Expenses

Sometimes businesses are in a catch 22 – they need more staff to grow but they need cash to pay the staff. Business owners can fund human resources expenses with cash from working capital loans and help propel their business to the next level.

9 – Expansions or Renovations

Some business owners use the working capital financing to fund their business growth. From an outdoor eating patio to remodel to another location in a neighboring city, you need cash to grow your business.

10 – Opportunities for Growth

As a small company owner, you can never tell when opportunities are going to occur. When you discover the ideal location to broaden your operation, get an offer to staff up a new business, or are unexpectedly contacted about acquiring out a competitor, access to quick financing will assure that you are in a position to jump on the opportunity before it slips away.

11 Taxes

Working capital financing is an alternative for funding property tax payment or bridging your cash flow during tax season.  

12 – Unexpected Expenses

Regardless how well small company owners strategize, unexpected problems such as equipment troubles, structural damage from fires or even floods, or a sudden change in the market can leave them short on cash. Working capital loans can represent the difference between keeping your company up and running or having to close down.

13 Leverage Expertise

Business owners use the working capital funding to access guidance and training from outside specialists. It could range from employing a consultant to help execute a new sales system to working with a software professional to accelerate your business strategies and reduced expenses.

14 – Hardware & Software

The difference between you and your competitors could be technology and access to data. To fund the computers and software systems you need to compete and grow, funds from a working capital loan can mean the difference for many small businesses.

ViewRidge Funding can provide the working capital financing you need to assist your business in attaining its full potential, whether you are small, large, local, or global businesses.