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What You Need to Know about Working Capital Funding

What You Need to Know about Working Capital Funding

If you are thinking about starting up a small business, chances are you have been planning your business model for years. In fact, the one thing that may be holding you back is not having enough working capital to fund the startup costs of your new adventure. Having enough finances to fund the day-to-day operation of a small business is essential for any new company to get off the ground. So, unless you are independently wealthy, it is likely that you will need some assistance in getting started. Fortunately, there are great services available that provide working capital funding in Kennesaw, GA.

What Is Working Capital?

Working capital is a business term that describes how many assets a company has after subtracting all of its liabilities. This typically factors in not only cash on hand, but other items that will be turned into cash within a year like accounts receivable and inventory. The most common problem small businesses face is not having enough cash on hand to cover day-to-day operations, even though in the long term, the business will be profitable once inventory sells or all accounts are collected. If you find yourself in this situation (and you probably will if your company is just getting off the ground) working capital loans in Kennesaw, GA, can help fill in the gaps.

How a Working Capital Loan Can Help

For most businesses, there is simply no way to turn assets into liquid capital fast enough to stay profitable and meet costs. Working capital loans can help. These types of loans can be used to pay everyday business expenses including rent, utilities, payroll or salary, taxes, and for more inventory, while the rest of your money is tied up somewhere else. These are very helpful loans if your business is seasonal, your business is just getting off the ground, or if there is a big opportunity that you feel would make your business money if only you had enough money available. The types of loans available include line of credit loans and short term financing options. Other loans, such as factoring services, which help turn accounts receivable or your invoices into hard cash, also are available.