Working Capital for Small Business

A small business would have its day-to-day operations as well as its expenses – it’s not all about the daily profit or the monthly revenue you earn. These expenses and costs can be anything from regular company bills and financial obligations, to the salary of your employees.

In the industry, there will be a time when you’d need help in terms of raising working capital for your small business. To tell you, this is all normal, in fact 59% of entrepreneurs applied for loans for business expansion, and this included funding the business to continue operations.

Confused yet? Are you not sure what a working capital is? If you’re new to the scene, then you might find some of the terms mind-boggling, but don’t worry – we’ll discuss that!

Defining Working Capital

In technicality, the working capital is considered to be the difference between the current assets you have and the current liabilities. It’s technically the money you have that doesn’t do anything- it’s stagnant.

Simply, it is the money used by businesses for everyday expenses like payroll funding, supply purchasing, rental payments, and even the emergency fund that your business has.

Why a Working Capital for Small Business is Important

The working capital of small businesses is essential – it’s what keeps the business going; it’s what makes the business run and operate. Without it, the business can tip and fall, leading to the business closing and failing.

When a business does not have the necessary and the sufficient funds for the working capital, they have a couple of options to choose from to finance their business capital they need. These options often boil down into two (2) categories: borrowing money or looking for investors.

The Idea of Loans

Meeting the working capital of small businesses is an integral part of business growth. A business owner or an entrepreneur needs to be determined in finding enough sources for running their small businesses.

One of the most common things entrepreneurs do when they’re short in their small business’s working capital is they apply for loans. These could be loans from credit unions, business funding companies, lending companies, banks, and sometimes, even the SBA.

This idea is loved and admired by many because of the fact that the repayment would dwell on the business owner making interest payments without the fear of losing a slice of the share of the company.

Investors

Seeking help from investors, on the other hand, could run the risk of losing a bit of your company’s ownership to investors. This leads to a reduced power over the control of the business. If you’re looking for investors, you can look into the options of:

• Angel Investors
• Crowdfunding Campaigns
• Venture Capitalists (VCs)

One main advantage this does is that these people or investors can help and assist you on how you can or should run your business. Most of the time, these businessmen and investors have enough experience to help you with some the problems that can jeopardize your business.

So out of all the options, what do you think is the best choice to raise the working capital for a small business? If you’re confused, don’t worry, we here at SoFlo Funding can help you with all the funding you need.

What Businesses We Support

SoFlo Funing is the company dedicated to helping all types of business in different industries. We assist and support startup businesses, new businesses, new entrepreneurs, and even existing businesses with a heap of problems.

We believe in the power small businesses have in the community – they can produce more jobs and they can help in the employment rate. That’s why when a small business approaches us seeking help to raise working capital, we’ll gladly help.

The options we have for working capital loans for small business includes lines of credit, traditional business loans, merchant cash advances, and many more.