WORKING CAPITAL IS THE LIFE BLOOD OF YOUR BUSINESS
Determining the path of your growth, working capital will predict whether or not your company can in fact grow.
With loans terms ranging from 3 months to 3 years, working capital finance is ideal for maintaining and expanding your business. Generally used for short term investments, it may be the solution you need.
ABOUT WORKING CAPITAL
Your working capital is your short term current assets less your short term current liabilities. Current is anything that will convert to cash within 12 months. For assets, this usually includes inventory, cash on hand, and money owed to you by customers. Liabilities are any short-term debt, money owed to your suppliers, along with any other upcoming expenses.
WHEN SHOULD YOU APPLY FOR WORKING CAPITAL FINANCE?
Working capital finance provides additional money in order for you to best maximise your business’s opportunities over the next 6-18 months.
If you consider how working capital can help meet your business needs, you will discover that the importance of having access to such financing. Whether purchasing extra stock or inventory, fitting out offices or retail outlets, opening a new office, expanding an existing division or setting up a new one, you are going to require capital. Without it, you simply cannot grow.
TYPES OF WORKING CAPITAL FINANCE:
Working capital finance is for medium-term investments with loan terms from 3 months to 3 years.
LINE OF CREDIT
What is a line of credit?
A line of credit is a loan with a redraw option. Given that the credit is revolving, which you can re-draw up to your agreed limit as and when you need it as long as you are making repayments.
A line of credit can be an excellent boost to both cash flow and working capital. It ensures that you always have funds available to cover unexpected expenses or to invest in growing your business.
What do I need to get this type of finance?
- Assets as security
- Good credit rating
What are the benefits?
- Flexibility to draw funds as and when you need them like a bank overdraft
- Only pay interest on the amount you use
- Gives you the ability to take on larger orders without reducing cash flow
- Funds are always available
UNSECURED BUSINESS LOANS
We make finding the right business loan a stress-free and easy process!
What is an Unsecured Business Loan?
Rather than use your assets as security, an unsecured business loan will you use your business’s future cash flow and in this way can be processed more quickly than other types of loans.
Although the interest rate may be higher, unsecured loans can actually produce better financial outcomes.
What do you need to get this type of finance?
- Good recent business history, cash flow and sales
- Good sales income
What are the benefits of an unsecured loan?
- Fast access to funds — usually less than 3 days
- Loans assessed on revenue and strength of cash flow
- No risks to your assets
- Quick and easy application process
STANDARD SECURED BANK LOAN
What is a standard secured bank loan?
A standard business loan is secured against real assets, for instance, your vehicle, house, land, commercial premises, or other business acquisitions. Because the security on this loan acts as a guarantee for the bank, interest rates are generally lower.
A standard secured bank loan can be great for raising working capital, purchasing commercial property, expanding, re-financing, or any other types of financing solutions your business may require.
What do I need to get this type of finance?
- Property or other business assets are needed as security
- Good credit history
- Deposit for assets as required
- Good trading history relative to the amount borrowed
What are the benefits of a standard bank loan?
- Borrow more than with an unsecured loan
- Lower interest rates
- Options to pay interest only for part of the repayment term (or a variation of this)
- Fixed payment amounts and frequency, so you know exactly what you owe and when
