Businesses that need cash have two options: taking out a loan on their assets or taking out a loan on their credit. But what if a business doesn’t have physical assets or credit for a loan? Many businesses that are just starting out may not be able to apply for traditional loans. Luckily, if they have revenue, they can consider applying for a working capital loan instead.
Small businesses need to have cash at hand. Without liquidity, even a successful business can falter. Cash is used for the purchasing of equipment and products, in addition to the payment of salaries — it doesn’t matter what a company’s assets are or how many clients they have if they cannot come up with working capital. A working capital loan can be used to:
Applying for a working capital loan only requires evidence of revenue, in the form of the last three bank statements for your business. Other loans often require that your business is in operation for several years or that you have excellent credit. If your business has not been in operation for some time and it does not have good credit, you can find yourself personally guaranteeing the loan. A personally guaranteed loan can consume your personal assets if it is not paid back.
But a working capital loan is based on your actual earning potential. You can also get loans for new equipment that is based on the value of that equipment. Both of these types of loan can be used even if your business is unable to produce credit statements. Once a working capital loan is authorized, it can be funded in as little as 24 hours. Money can be deposited into an account to be used, and payments will begin based on the loan agreement.
There are many reasons why you might need working capital — and you often need it fast. As long as your business has a bank account, you may be able to qualify for a loan from $1,000 to $2 million. Contact MY Company Funding with any of your working capital loan questions.