| Working capital is the amount of capital | | | | payments or fixed repayment terms. |
| required to carry on a business. It can be a | | | | |
| problem for businesses to obtain the | | | | Working capital can also be obtained by |
| necessary working capital, especially when | | | | selling your account receivables. There are |
| they are starting up, and that is why it is | | | | many advantages to this option including not |
| so important for businesses to know all that | | | | having to give up equity, you can purchase in |
| they can about obtaining the necessary | | | | volume from suppliers, you can eliminate bad |
| capital to build their business properly. | | | | debt, and there is no additional debt accrued |
| Whether a business is small or large the same | | | | because selling account receivables is not |
| programs are available to those seeking | | | | considered a loan. |
| financing. | | | | |
| | | | Business credit cards give you another option |
| Business micro loans are one source for | | | | for obtaining working capital, and they |
| getting working capital. These are smaller | | | | provide your business with a great amount of |
| loans, which are typically between $5,000 and | | | | flexibility. You can track employee expenses, |
| $35,000, and are targeted to startups and | | | | smooth out the process of cash advances, you |
| newly established small businesses. This | | | | can reduce some operating expenses, maximize |
| program is established by the Small Business | | | | the potential of cash flow, and they can also |
| Administration. Non-profit community lenders | | | | help businesses with their vendor |
| are given the money by the SBA, and they make | | | | relationships. Make sure that when you are |
| the decisions on who gets the loans. Micro | | | | looking at a business credit card that it |
| loans have terms of up to six years, and | | | | reports to the Small Business Financial |
| requirements by lenders vary. If you decide | | | | Exchange. This ensures that the card will |
| to get a micro loan be prepared with | | | | help build up your business credit scores so |
| collateral, and also be prepared to | | | | you can secure larger loans down the road. If |
| personally guarantee the loan. Specific | | | | the business credit card is not reporting, |
| training and business planning requirements | | | | you won't be gaining all of the benefits you |
| must be fulfilled before a micro loan will be | | | | can out of your business credit cards. |
| accepted as well. | | | | |
| | | | The equity loan allows businesses to obtain |
| Credit card receipt advances, also known as | | | | working capital through investment banks that |
| merchant advances, is a fairly new, but | | | | provide capital secured by the equity or |
| effective method for obtaining working | | | | ownership of shares in a company. Companies |
| capital. This method allows for an immediate | | | | that typically get this form of loans are in |
| cash injection because the lending source | | | | a market that is growing quickly, or they |
| will buy your future credit card receipts in | | | | have established a niche for themselves. An |
| the form of a cash advance. The great thing | | | | equity loan is typically between $1 Million |
| about this option is that you can apply with | | | | and $2 Million dollars initially with the |
| poor or under established personal or | | | | potential of the loan being more over the |
| business credit. The requirement is that your | | | | life of the loan. |
| business processes a minimum of $2,500 per | | | | |
| month. After meeting that requirement your | | | | There are many other options for financing a |
| business will be advanced up to $100,000. The | | | | business, and so it is recommended that you |
| amount that you can receive is established | | | | find a business capital search engine online |
| from current sales receipts. A small | | | | to make sure you find all of the financing |
| percentage will be deducted from your ongoing | | | | options for your business. |
| credit card receipts, and there are no fixed | | | | |