Working capital loans are an attractive way for businesses to generate capital to finance everyday operations or to fund future business growth.
According to the U.S. Small Business Administration, having positive working capital is necessary for any company to meet its ongoing operational needs. The availability of working capital impacts the company’s ability to meet its trade and short-term debt obligations, as well as to remain financially operable.
Working capital loans are specialized loan types that are granted to businesses and developed to meet the everyday financial needs of running a business. Unlike traditional business loans, working capital loans do not require the business owner to submit the loan’s purpose to the lender during the application process. Instead, working capital loans can be used for a variety of purposes (purchase inventory, finance new equipment, covering payroll) and usually do not require collateral.
In today’s economy, it’s almost impossible for most small businesses to get the working capital they need from banks and other traditional lenders. Many business owners have turned to alternative lenders in order to acquire the working capital their business needs. In June, alternative lenders approved 61% of small-business loan applications, while large banks approved only 22% of small-business funding requests
Bizfi, an alternative lending marketplace, allows business owners to see real financing options from alternative lenders in minutes, simplifying the entire funding process.
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