Working capital finance is a business loan that can help you take care of your immediate and day-to-day costs
Like the name suggests, having this type of financing means you have the capital to cover vital operating costs like paying suppliers, covering wages or adding inventory to make the most of busier business periods.
Importantly, it also means you can have funds at hand when you need them to create growth and make the most of any opportunities when they happen.
One type of Working Capital Finance is an overdraft facility. It’s an approved amount of credit you can use if and when you need it, that’s usually attached to your business transaction account. Because it’s designed to be a day-to-day facility, and not for capital purchases or long-term financing, an overdraft may provide a permanent source of short term funding to meet your operational expenses.
Line of Credit
For access to larger amounts of finance, a Line of Credit is another option. Like the overdraft facility, it’s credit you can access when it’s needed, but usually secured against property and generally not attached to a transaction account.
Trade and Inventory Finance
For many businesses, keeping adequate stock levels on the floor is what keeps them running efficiently. Inventory Finance is a short-term loan that allows you to purchase stock in advance without using up all your cash reserves. The products you buy are the collateral, so you don’t have to use your assets to secure the loan. This type of finance is especially useful for overseas trade purchases when buyers and sellers aren’t known to each other.