A Guide To Obtaining A Small Business Working Capital Loan

4 Mar 2020

Almost all companies have times when they need more cash than they have at hand. Things happen. They are not always expected and are not always pleasant. The equipment breaks down. A fire arises in the kitchen. There are economical declines for some reason. Money is needed to fix things and overcome these types of problems.

To increase cash on hand, many business owners use commercial or even personal credit cards, financing cash advances, or larger purchases with the intention of liquidating them after several months.

Are these Good Options?

Credit cards are best used for daily spending and with the intention to payoff the debt quickly. Carrying a large credit card balance month by month can be a very heavy burden in the long term, especially since most cards have a high-interest rate. In this situation, having other options could offer a financial advantage.

Working Capital Loan for Small Businesses.

Having a loan as working capital allows your company to take advantage of the funds to close cash flow gaps or expand the business by allowing you to take advantage of opportunity windows without emptying your savings.

Sometimes, requesting a line of credit before you really need it, gives you the flexibility to make better decisions for your business at an appropriate time.

Working capital loans are different from traditional “term” loans from a bank. The term loans provide one big sum of money for a specific long – term investment: buy real estate, purchase heavy equipment, etc. Because you are borrowing a lot of money, you have several years to pay, so the debt is long.

Working capital loans give small businesses alternatives to bank loans. It is easier to qualify for the loan. The application process is much simpler and faster; in fact, you can get the money you need within a few days.

Where can you get a Working Capital Loan from?

Online lenders like Affinity Beyond Capital, a brokerage firm based in Valley Stream, NYC offer short-term loans to small businesses. These types of lenders have helped many entrepreneurs achieve their business goals using loan products that support the needs of the business. Often businesses deal with the problem of lack of working capital, and this is where a lender like Affinity Beyond Capital’s flexible financing options can definitely help.

What are the requirements that are usually needed for loan approval?

  • A good credit history of the company requesting the loan, as well as its main shareholders and guarantees.
  • Specify the destination of the credit.
  • Quantitative and qualitative evaluation.

How long does a Credit Authorization Take?

Credits of this nature are granted to legal persons as working capital, and are usually resolved quickly, on average in about five business days.

What Documents does a Company usually need to request a Loan?

Depending on the institution where it is requested, the requirements may vary, but usually among the most recurring are the following:

  • Credit request
  • Authorization to consult your credit bureau.
  • Constitutive Act
  • Financial statements for the last two years
  • Organization chart

A small business loan can help a business owner expand or take advantage of an opportunity to develop the market. Sometimes extra money is needed to remodel, buy a new office, increase the number of people and/or supplies … and without the money at hand, the opportunity is lost.

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