Working Capital Loans

Working Capital Loans

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Working capital loans can provide businesses with funds to cover everyday expenses such as payroll, rent, and other operational costs. These funds can be used for any short-term projects as they have flexible repayment terms. Business owners can use it to cover cash flow gaps during a slow season.

What is a Working Capital Loan?

A working capital loan is a financing loan option taken by business owners to cover short-term expenses. This type of loan is considered a variation as a short-term financing option as the repayment duration is considerably less than a term loan. Businesses opting for a working capital loan utilize the funds to cover operational expenses.

When you apply for a working capital loan, you will receive the amount needed to cover your expenses. Working capital loans are generally smaller than a term loan and are often determined through the company's balance sheet. The balance sheet is an overview of the company's assets, liabilities, and shareholder equity at the time of the inquiry.

This loan option is excellent for seasonal slowdowns as well. Retailers, resorts, and other relevant seasonal businesses often turn to these financing options to keep their businesses flourishing during their off-season.

How Can You Use a Working Capital Loan?

Banks, credit unions, and certified online lenders like First Union Lending can issue working capital loans. While banks and credit unions offer reasonable rates and terms, their prolonged application process and slower funding do not make them the ideal choice in the moment of urgency. Certified online lenders offer greater flexibility and faster funding times and will work with you to receive just the right funding option.

Working capital loans can come in collateralized and unsecured forms depending on your needs, credit qualifications, and what will work best for your company.

How to Apply for a Working Capital Loan: Requirements and Getting Started

If you're a growing business needing revenue for your business initiatives, First Union Lending is here to help! You can apply by submitting your basic information in the form below. Our Funding Specialists will analyze your qualifications and will reach out to walk you through the following steps.

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During the application process, most lenders will ask for the following general information:

  • Basic personal and business information, including a driver's license, voided business check, proof of ownership, business license, etc.
  • Personal and business bank statements
  • Financial statements such as your balance sheet and profit and loss statement
  • Personal and business credit score
  • Individual and business tax returns
  • Individual and business tax returns

Lenders typically require borrowers to have a strong credit history and documentation to prove a business's creditworthiness.

Moreover, many lenders will require that you sign a personal guarantee for your loan, whereas others will take out a UCC lien on your business's assets. Before signing an agreement, therefore, you'll want to thoroughly review all the details to ensure you understand the terms, fees, and liabilities.

If you have any questions in regards to how to proceed with a working capital loan, feel free to give us a call: 863-825-5626

Advantages of a Working Capital Business Loan

Advantages of a Working Capital Business Loan

The benefits of a short-term working capital loan vary per business need. A working capital loan provides immediate cash to help businesses cover any emergency expenses or downturn in the industry. It works well for seasonal businesses and covers gaps in cash flow. They offer flexible repayment plans, so you don't have to pay for five years.

Types of Working Capital Loans

Several options are offered to assist businesses as they scale, grow, and create newer marketing enhanced strategies. Below is a common type of working capital loan or financing option made for small and growing businesses:

SBA Working Capital Loans: Partly guaranteed by the U.S. Small Business Administration (SBA), SBA loans have tighter lending standards and requirements. They offer incredibly flexible rates and terms, making them the better choice to finance your business. These loans can provide up to $5 million for working capital, expansion, or equipment purchases.

Business Line of Credit: Lines of credit can be used to help manage cash flow and other working capital expenses. Repayment terms for lines of credit differ from other traditional loans because borrowers are not charged for interest on the whole awarded amount. They only pay on what they spend - similar to credit cards.

Short-Term Loans: Specifically, short-term loans can be highly beneficial during a growth period, fluctuating cash flow times, or a need for seasonal purchasing. The application process requires proof of business ownership, financial statements, and a copy of your driver's license. Lenders will check your business and personal credit. Once approved, companies can obtain their funds within 1-2 business days.

Choose First Union Lending As Your Premier Lender

Choose First Union Lending As Your Premier Lender

At First Union Lending, we unwavering believe small and medium-sized businesses deserve the right to access the capital they need to succeed.

Our goal is to build long-term, lasting relationships by providing business owners with the funds they need when they need them. We pride ourselves on being educated, knowledgable, and caring about conducting business. We have voluntarily acquired much of the same licensing traditional banks require to cement our fiduciary responsibility to our clients and work culture.

Our goal is to build long-term, lasting relationships by providing business owners with the funds they need when they need them. We pride ourselves on being educated, knowledgable, and caring about conducting business. We have voluntarily acquired much of the same licensing traditional banks require to cement our fiduciary responsibility to our clients and work culture.

We are here to consult, help you save, and guide you and your business to success.

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