I want to know about working capital financing.
I am thinking of taking a working capital loan for my business. Can you tell me something on working capital financing?
Working capital financing refers to the capital which is needed for the day-to-day operations of the business.
Sources of working capital financing include, working capital loans, overdrafts, revolving credit facilities, invoice financing, asset refinancing, merchant cash advances, and tax bill funding.
Working capital loans help to boost cash in the business which is looking for growth opportunities.
Overdrafts generally can be used a s a backup for any unexpected expenditures.
Revolving credit facilities is where the customer/borrower pays a certain fee and is allowed to use the funds when needed.
Invoice financing is a way to borrow money because of the amounts due from customers.
Asset refinancing allows a business to refinance the asset which is already owned to free up the additional working capital.
Merchant cash advances provide cash advance on any future credits.
Tax bill funding is when a tax bill is affecting the working capital, there is a funding option which is available to pay the taxes.