Working Capital Financing
Shorter-term financing used to cover day-to-day operating needs rather than long-term assets.
Program overview
Working capital financing covers operating expenses such as payroll, inventory, and supplier payments. Structures and cost models vary considerably across providers.
How it works
- Funding is generally based on revenue and bank account activity.
- Repayment may be daily, weekly, or monthly depending on the product.
- Cost may be expressed as an interest rate, a factor, or total repayment.
Common uses
- Payroll
- Inventory
- Supplier payments
- Short-term operating gaps
Who may be a good fit
- Businesses with short-term, revenue-backed operating needs
What you may need
- Business bank statements
- Government-issued identification
- Voided business check
- Basic business details
Potential advantages
- Often faster than long-term financing
- Focused on revenue rather than fixed assets
Potential drawbacks
- Cost can be significantly higher than longer-term products
- Frequent payment schedules can affect cash flow
Application process
- Assess the size and duration of the gap
- Compare total repayment across offers, not just payment size
- Review the agreement, including fees and payment frequency
General qualification considerations
- Monthly revenue
- Deposit consistency
- Time in business
- Existing obligations
Alternatives to consider
Business Term LoansA lump sum repaid over a set period, commonly used for defined projects and one-time investments.Business Lines of CreditA revolving limit a business can draw from as needed, often used for short-term or recurring cash flow gaps.Invoice FinancingFinancing tied to outstanding customer invoices, commonly used by businesses that bill other businesses.
Frequently asked questions
How should I compare offers?
Compare the amount received, the total repayment, all fees, the payment frequency, and the term. Our Financing Cost Calculator can help you see those figures side by side.
This is preliminary information, not an eligibility determination, offer, or approval. Final eligibility, terms, rates and approval are determined by the applicable financing provider.