What Are Some Examples of Working Capital Loans?

What Are Some Examples of Working Capital Loans?

There are many companies which provide the best working capital loans for small business clients in the US. Working capital loans provide small business owners with alternatives to traditional bank loans. It is easier to qualify for a working capital loan than most other types.

Some examples of loans include the following. What is best for one company may not be suitable for another, though.

Merchant Cash Advance (MCA): If a business does considerable credit business on an everyday basis, then it can borrow cash against that income. That means if it gets money now, it has to pay back a set percentage of that amount from each future credit card transaction.

Short-Term Loans: These types of loans are smaller in terms of length than traditional term loans. These are typically unsecured loans, and a business will have up to 20 months or so to pay it back.

Accounts Receivable Factoring: When a business has substantial receivables, it can sell those to a third-party known as a “factor”. The third-party then assumes control of the task of collecting AR. Businesses at times factor receivable or outstanding assets to meet both the existing and immediate cash requirements.

Aside from these, you can find financing to buy equipment or inventory. These are not working capital loans; although the company does get capital, it can use that for specific business purposes.

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