Empower Your Business With Working Capital Loans

In Layman’s terms, net working capital (NWC) is the difference between a company’s current assets and liabilities on its balance sheet. Simply put, this is a measurement of a company’s liquidity and its ability to meet short-term obligations as well as funding the operation needs of a business.
A working-capital loan covers the business’s day-to-day operational expenses. It provides the necessary funds to manage the cash flow, payment of wages, payment to suppliers, purchase of inventories, and other short-term financial obligations of a business.
Typically, a well-capitalized business would not need a working capital loan, and the only rationale for needing such a loan could be delayed payment from a big customer, suppliers requiring changing sudden terms for payment, and employees walking away from the business unless they receive an immediate significant pay rise.
Given that a working capital loan is purely for short-term requirements, it is typically funded by an overdraft or an unsecured term debt over a short-term period.
These loan facilities are typically unsecured, meaning they don’t require collateral. Lenders evaluate the business’s creditworthiness, financial statements, and cash flow to determine if they qualify for the loan. Recently, banks and lenders have started offering Trade Finance and Invoice Finance facilities to assist with the working capital of a business.

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Business Working Capital Loans: Navigate Your Cash Flow Challenges

Invoice Finance

The invoice finance facility allows your business to access funding up to 80% of the value of the unpaid invoices you must send to your customers. If you are a supplier or manufacturer, you may have given terms to your customers, i.e., 60 days or 90 days payment after you have delivered goods to their premises.
These terms may have been given after you have been engaging with a particular customer for a long time or were negotiated as part of an agreement for them to engage your service.
Rather than waiting for 60 or 90 days until your customer pays, which may negatively impact the cash flow of your business, a business can access funding up to 80% of the value of unpaid invoices upfront by effectively selling unpaid invoices to the financier.

Lease Doc Loans: Get Approved Fast and Easily

All business owners should be aware of what the cash conversion days are for their business, which is effectively after knowing (from the days that the cash is utilized for production, i.e.,
Having to be deployed to paying a particular supplier), once the goods are finished (how many days it will sit in the warehouse/logistic channel), and finally receiving cash once the buyer pays for the goods.
As debtor increases or customers’ orders increase, this negatively impacts working capital as increase funding is required for such orders. Remember, a working capital loan should be used strategically to support and grow your business. It’s essential to have a solid plan in place to utilize the funds and ensure timely repayment effectively. If you have any specific questions or need further assistance, feel free to ask!

Trade Finance

This is a short-term facility, where the maximum can typically go up to 180 days, especially when used to pay suppliers.

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Domestic trade finance is suited to a large retail, wholesale, or manufacturing business that needs short-term finance to help fund the payment of outstanding invoices issued by domestic suppliers.

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Import Trade finance is suitable for business customers who need short-term finance to fund their import transactions. This is prevalent for wholesalers who import goods from overseas, especially when the supplier does not offer payment terms.

Empower Your Business With Working Capital Loans

Home Loans

We’re committed to finding the perfect home loan for you. Let us help you achieve your homeownership dreams.

Borrowing money for ventures such as buying your first home, purchasing an investment property or building a new home can be more complex than many people imagine.

With a huge range of lenders and products on the market currently, it can be a daunting process knowing which loan is the right loan for you. Our job is simple! It’s to sit down with you, the customer, listen to what your financial plans are, and to offer solutions that best suit your needs now and into the future.