What is working capital?

Simply put, working capital is funds available to the business for day-to-day use. It is the excess of current assets over current liabilities. A positive working capital reflects the ability of a company to pay off short-term debt. Some businesses cannot cover their regular operations without additional working capital obtained through funding options.

Ways to build a good amount of working capital

A few lucky entrepreneurs are financially stable. They have savings and sales to cover their expenses. Others, however, will need some help to get the business running. The financial backing can come from a variety of courses.

Regardless of the situation, businesses may need to increase their capital during certain circumstances. Some companies will use working capital to expand their business by hiring new employees, increasing their inventory, or investing in technological advances. Others will use the loan to prepare for an upcoming busy season.

How strong is your working capital?

As Entrepreneur suggests, a company can calculate its operating cycle and use that information to analyse its financial needs. The time elapsed during the accounts receivable and the inventory cycle is compared to the length of the accounts payable cycle. A lower working capital during the first two cycles could prompt a business to look at financing options.

Does the Business Need a Loan or a Cash Advance?

Loans and cash advances are the two primary funding options. Each has its advantages and disadvantages, and each can be procured from several establishments. Below is a summary of each option.

Loans

• Legally binding
• May be dependent on credit history
• Possibility of low-interest rates
• Can be approved and funded quickly
• No hidden fees

Before signing for a loan, the business owner must be eligible for it. The requirements vary by lender, but they are essentially verifying that the owner will repay the loan on time.

Cash Advances

• Less regulated than loans
• Offered by non-banking corporations
• May be easier to obtain for new businesses
• Different payback system than loans
• May have high-interest rates
• Can be approved and funded quickly
• May have hidden fees

Look out for the funding options at Capital Float

The size of your company and eligibility

Capital Float will accept businesses that are as young as one year old, granted they have an annual turnover of 25,00,000 rupees and are based in India. Loans begin at 1,00,000 rupees, go to up to 1,00,00,000 rupees for online sellers, and are capped at 50,00,00,000 rupees for larger businesses. Interest rates can be as low as 18{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}, and funding can be approved in one week.

How much of your inventory can be financed?

Inventory financing is available for companies that have been running for two years with an annual turnover of 1,00,00,000 rupees. Up to 80{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of the invoice value can be loaned. The loan can be repaid in one payment, or over the course of up to 180 days.

Cash advance for your business needs

Additionally, cash advances are distributed to companies with annual turnovers of 20,00,000 rupees, when 12,00,000 of that is done by credit card. The loan can be between 50{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} and 150{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of the applicant’s monthly credit card volume, repayable in up to one year.

Managing the Cash Flow for Improved Sales

When sales are going well, and expenses are being covered, the business has a positive cash flow. This is the desired flow for a company. Having a negative cash flow means that the business is spending more than it can repay, and this is risky behaviour.

Factors affecting working capital

Working capital management is essential for the business to run smoothly. To properly manage the cash flow, factors like accounts receivable, inventory, and accounts payable need to be considered in addition to the profit or loss of the company. Generally speaking, a positive cash flow means the business is profitable. A low inventory level frees up working capital for other uses. Sending out invoices promptly will speed up customer payments.

Identify difficulties and resolve problems in time

Having a cash flow spreadsheet allows the owner to quickly identify challenges that may be faced, such as unexpected large orders, cancelled orders, or late payments. When the repercussions are shown with numerical values, plans can be made in anticipation of those events.

As business owners learn to control their cash flow, working capital will be more readily available, and funding options will not be required as often.

Primary keyword: Working capital

LSI keywords:

Variants: additional working capital, lower working capital, working capital management,  positive working capital

Antonyms and synonyms: cash flow, financing options, funding options,  financial backing,  regular operations, operating cycle,  financial needs, inventory financing

https://www.kabbage.com/blog/merchant-cash-advances/

https://www.entrepreneur.com/article/225658

http://www.investinganswers.com/financial-dictionary/financial-statement-analysis/working-capital-869

http://fitsmallbusiness.com/working-capital/

http://www.profitbooks.net/manage-cash-flow-small-business/

Unsecured business loans allow a small business to obtain funding without putting up collateral. This is a viable option for many businesses who may not have anything of ‘value’ to put up as collateral e.g. expensive equipment or property. It is also a viable option for companies that may not wish to borrow much in the way of cash.

As with other types of loan out there, you will find that there are many lenders to choose from. Some of these lenders may be perfect for your business. Other lenders may not be quite as advantageouss. As a small business owner, it is your job to select a lender who is right for the business that you are operating. This blog post will provide you with details on how to do this.

Benefits of Unsecured Business Loans

There are various benefits to unsecured small business loans. You will be able to see a quick round up of the advantages on Chron. It, essentially, boils down to the following:

• Easier to obtain than traditional loans as you will not have to supply collateral.
• In the event of bankruptcy, unsecured loans tend to be ‘discharged’ whereas secured loans are typically not.
• The lender will not be able to seize your possessions should you be unable to pay the loan back.

Steps to Obtaining a Small Business Loan

Obtaining an unsecured loan for your small business will rest strongly on the way in which you manage your business and your finances. Before you apply for a small unsecured business loan, you should read the article at Investopedia. It goes in depth on what is expected of you when you apply for a loan. It can be summarised as follows:

• Ensure that your cash flow predictions are accurate. This will have a significant impact on whether you can obtain a loan or not.
• Ensure that your credit score is accurate. Try to boost it if possible. An excellent guide to follow can be found on inc.com.
• Put together a solid business plan
• Research potential lenders. We will give you information on how to select a lender in the next section.

What should you look for in an unsecured small business loan provider?

Your small business is unique. This means the short-term financing that you obtain for your business should be unique too. Therefore, it is important that you select a loan provider who can offer flexible loans. Capital Float can provide you with the following:

• Customised loan products. This way you will be able to tailor the loan package to suit your specific business.
• Flexible financing options. This includes invoice financing and e-commerce finance.
• Term finance where you have the ability to set the length of the short term business loan.

Small business lending on both invoices and e-commerce values are a great way to boost your chances of being successful with your loan application. Invoice financing allows you to borrow capital against the number of outstanding invoices that you currently have. E-commerce financing allows you to borrow money for your small business against your average total sales for your online company.

Unsecured business loans without collateral tend to be a bit ‘riskier’ for a lender. Also, you may find it slightly more difficult to obtain a loan with competitive interest rates. However, if you look at various websites, you may not find a satisfactory interest rate. But we here at Capital Float, provide you with competitive interest rates as low as 1.33{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}. Low interest rates mean that your business will be paying back ‘less’. This means paying back the loan will have a lower financial impact on the firm.

Applying for the loan

Once you have found somewhere to provide you with your unsecured loan for your business, it is important that you get the application process right. This will increase your chances of being selected. At Capital Float, we will process your application and provide you with the money that your small business needs within just three days. However, to ensure this, you will need to make sure that you have all of your paperwork in order.

Primary keyword: Unsecured business loan

LSI keywords:

Variants:  unsecured small business loans, Small Business Loan, small business unsecured loan,  unsecured small business loan provider

Antonyms and synonyms:  collateral,  traditional loans,  secured loans, short term financing,  financing options, Term finance,  short term business loan

Sources:

http://smallbusiness.chron.com/advantages-disadvantages-unsecured-business-loan-34986.html

http://www.wahm.com/articles/the-pros-and-cons-of-unsecured-small-business-loans.html

http://www.investopedia.com/articles/personal-finance/082616/4-steps-getting-small-business-loan-without-collateral.asp

http://www.inc.com/rohit-arora/eight-ways-to-raise-your-business-credit-score.html

https://www.nationalfunding.com/unsecured-business-loans/

http://www.comcapfactoring.com/blog/what-is-invoice-financing/

https://www.fundingoptions.com/knowledge/finance-for-ecommerce/?utm_expid=52061910-29.EPoOv9CRSBeI-fZQil1s0A.0&utm_referrer=https:{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}2F{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}2Fwww.google.se{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}2F

https://safe.capitalfloat.com/cf/offers/businessLoan?utm_source=Social&utm_medium=Facebook_Post&utm_campaign=GIFF-UBL-Flash-Sale-5Aug_ARM

http://fitsmallbusiness.com/how-to-apply-for-an-sba-loan/

https://lendedu.com/blog/difference-between-secured-and-unsecured-loan/