Using Working Capital Loans for Inventory Purchases

Using Working Capital Loans for Inventory Purchases

As a new, emerging or growing business, it is important to have an open channel to the financing you need to operate. A critical aspect of your business operation is the management of cash flow — you need to have an adequate amount of funds to be able to keep your inventory purchases in balance with the demands of your customers for your products.

Whether your business has near perfect credit or a business credit score that is in the 500s, MY Company Funding has a way to work with you to locate reasonable financing options. Understand how working capital is determined and why it is important to your business can help you locate the resources you need to ensure that you are operating at the right level of financing or if you need to seek working capital loans.

How to Determine Your Working Capital Needs

In the strictest of accounting terms, your working capital is the amount of current assets posted on your company’s balance sheet that exceeds your current liabilities. This measurement may not, however, give you the most accurate picture of your situation. Your inventories, accounts payable and accounts receivable are also factors that need to be taken into consideration regarding working capital. If it takes you longer to collect on your accounts outstanding than it does to pay for your inventories, you may be experiencing a problem. Your inability to pay bills and get paid to replenish your stock and sell more can create a cash flow crunch critical to your business success.

If it takes you longer to collect on our accounts outstanding than it does to pay for your inventories, you may be experiencing a problem.

What are Working Capital Loans?

Working capital loans provide you with the cash on hand you need in order to meet your obligations. They help create positive cash flow, which in turn takes away the concern you may have with slow paying accounts. This form of business financing provides you with cash today, based on your inventories, allowing you the freedom and flexibility to expand into new markets, invest in technology, pay and reward staff and keep the lights on in your business.

The terms of working capital loans can be structured to be as flexible as you need them to be for your company’s needs. You can seek terms of 30, 60 and even 90 days, depending on the type of business your run and your needs.

Working with MY Company Funding

For more information about working capital loans and how they can improve your cash flow, call on the professionals at MY Company Funding. We are located in Columbus, Ohio, and offer short-term working capital loans for credit scores all the way down to 500! You can find the financing you need for your inventory purchases. Simply provide an application and bank statements. Have questions about working capital or other financing options? Call us at 740-917-4960 or visit us online to talk to one of our funding professionals.