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5 Types of Working Capital Loans for Your Business

Five Ways to Fund Working Capital Needs

5 Types of Working Capital LoansThe business organisation needs capital at various stages of production. It is difficult to the new business owner to fund everything from the pocket. Few business owners will be able to fund the start-up capital from the pocket when it comes to working capital, it turns to be a tough game. A business owner needs to search for different alternatives to raise funds for the business needs. Commercial loans are one good alternative that hits your brain when there is lack of funds to address your working capital needs. Apart from business loans, there are many other alternatives available. Explore all the available options before you take a final call.

Commercial loans

Business loans is a top choice for any owner who is address financial needs of the business. Your business should be operating at least for a period of two years to get qualified for this loan. As the lender is at higher risk while approving the business loan when compared other types of loan alternatives available for business.  You must adhere stringent eligibility requirements and you demonstrate the success of your business to convince the lender about your repayment capability. You also need to provide substantial down payment and pledge a collateral to avail a loan.

Equipment financing  

A start-up business may find it difficult to qualify for a business loan, equipment financing is a wonderful option in such scenarios. As evident by the name, these loans are sanctioned for the business owner to purchase machinery for the business organisation. Unlike business finance, these loans are easy to qualify. You will have a chance to get this equipment finance even for a start -up to a business or when you have a poor credit because the machinery itself serves as collateral here.

Business credit cards

When you just don’t want to go through the headaches of seeking approvals to arrange funds for your working capital needs, business credit cards seems to be a viable option. These credit cards are in fact an inexpensive way to funds your business needs. Some credit cards offer 0% interest rate for a limited period of time like 9-21 months. Choose to geo with the card that has a high-interest free period to benefit the most. You will be able to borrow free credit for working capital needs if you can repay the loan within interest-free period.

Invoice factoring

Invoice factoring allows small business to convert outstanding invoices into capital for a fee. This is most flexible and efficient way to fund working capital needs of the business. You will quickly get short term credit for working capital needs of your business. You can factor all the invoices that are due for 90 days or less. Most of the business owners try this as last option to fund their business because they don’t want their customers to know that they are factoring invoices.


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