We’re firm believers in the benefits of working capital loans here at Direct Capital. There aren’t many other types of financing that offer such flexibility. Though we’ve talked about the major benefits once or twice, there are several other aspects of a working capital loan that might be surprising to those outside of the financial industry.
That’s why we’ve compiled this list – The top ten things you may not have known about working capital loans.* Hold on to your hats.
- They can be used for almost any expense – from marketing expenses, to hiring new employees, or even purchasing a new company mascot costume.
- They can help you turn over your inventory faster. Some companies utilize working capital loans to take advantage of bulk pricing or another large sale on inventory where a substantial upfront payment is needed in order to take advantage of special pricing.
- You can often pick the length of the payback on your working capital loan. With a longer term, your monthly payments will be fairly minimal which could mean less stress about payback. With a short term, you’ll wind up paying less interest overall, but your monthly payments will be slightly larger. Generally speaking, the terms range from 6 to 18 months.
- You’ll have the money in your hands in a matter of days, not weeks. So, you’re able to act on immediate needs if your ice cream machine is on the fritz or your delivery truck broke down.
- Working capital loans can usually go up to about $150,000.
- You can even use Working Capital to cover your 2012 tax payments.
- There are far fewer restrictions on working capital loans than a standard bank loan. If you’re financing through a traditional bank, be prepared to read a fair amount of fine print before you’re able to get your cash.
- There’s minimal paperwork. You won’t have to spend the entire day signing documents and hand over your first born child just to get a Working Capital loan. The entire process is a breeze.
- Working capital is a great option for those companies that might have been turned down, or deemed “too risky” by traditional lenders. Working capital has been used by many businesses with less than perfect credit or a shakier business history.
- Companies that offer working capital loans, like Direct Capital, are growing right now and are in high demand, so you can rest assured that finding a working capital loan when you need one won’t be a difficult task.
How have you used a working capital loan?
*Working capital not available in the following states: AK, DE, ND, VT