Working capital being all the capital or stock assets you have at work that needs money to keep the machine churning everyday.  How do we do this and what are the fundamental principles involved?  Also, if my bank won’t fund my working capital needs, who else will?  How?

Basically, a co. needs to monetize their working capital accounts. How?  The most common solution is bank financing via an operating line of credit for A/R and inventory. Alternatively,  confidential invoice financing or discounting is an ideal cash flow solution. Discounting allows you to bill and collect your own receivables and turn your cash flow needs into a healthy cash machine…ready to handle all your growth in sales.  Take the guess out of your sales growth needs and unlock your short term assets by monetizing them today.

Another option, not limited to the above is a cash flow loan. A more sophisticated finance term for this loan is a mezzanine or ‘sub debt’ loan. For smaller and medium sized businesses these loans tend to go up to the $250k range and are offered by a specialty lender which is funded by the Government of Canada.  Larger cash flow and working capital loans tends to be in the $ Million range and are offered by non banks. These loans typically are unsecured, are used for working capital purposes, and have rates in the low to mid teens due to their unsecured nature.

Working capital means different things to different business owners. There are certain government programs that might meet your needs in the areas of term loans, leasehold improvements, etc. But true working capital is the financing of current assets such as receivables, inventory, and purchase orders.