Direct Capital has spilled a lot of digital ink about the benefits of working capital* in the past, so we’re not here to do that again today. What we want to do is talk about the best time to use a working capital loan.
As it turns out, there is no one ideal time. The best time to use a working capital loan is when you need one, regardless of whether that’s the middle of winter or the beginning of summer. Yet there are still specific situations where working capital makes a ton of sense.
Let’s run down a few scenarios:
- You need to preserve your cash flow. A working capital loan can help you stay ahead of any cash flow concerns by infusing your business with cash without taking it right out of your bank account. You can pay it back on terms you negotiate with Direct Capital.
- You have a need to tackle a major project. Working capital can help you by giving you a way to pay for primary and peripheral expenses
- You need to add financing to an equipment lease. “Bolt-on” working capital can supplement an equipment acquisition by offering effective additional capital to market your new addition or pay for additional needs. It’s a very versatile form of financing.
- You have a mission critical need. If something breaks down or a huge opportunity has come up that you can’t pass up, working capital can pay for it.
In these four scenarios, working capital can be invaluable. How has your business used working capital in the past?
*Working capital not available in the following states: AK, DE, ND, VT