An essential part of the day-to-day running of many businesses, a working capital loan is a financial tool that is used to finance your ongoing work. This can involve payment for assets, suppliers, or anything that requires the deployment of short-term capital to respond to immediate business needs.
Obtaining one allows you to circumvent issues around immediate liquidity, empowering you to remain flexible to change and seize opportunities as they arrive. However, these often come with high rates of interest and negotiating your way through the market to find one that works for you can be challenging.
What are the different types of working capital loans?
When it comes to finding the right loan for your business, you will be looking at a secured or unsecured working capital loan. A secured capital loan will have an asset set against it as collateral. Depending on the size of the loan this can be set against property, stock, or a tangible asset such as cars or other machinery. While these are ostensibly business related, they will commonly be set against a unique individual. Failure to keep up with regular repayments or other business issues can negatively affect your rating and cause personal as well as professional issues.
One of the most useful types of working capital loan is an unsecured loan. This does not require your business to put forward any capital or secure the loan against collateral. However, this is only available to certain businesses and can potentially be difficult to obtain.
How to get a working capital loan for a small business?
Speaking with your chosen provider or financial institution can allow you to access a range of options – letting you find the best interest and repayment options for your current working situation.
However, it is important to remember that obtaining working capital loans for small business can be uniquely challenging for many professionals. Due to the influence of your previous debt and repayment actions ‘bad’ credit can quickly see you shuttered off from a range of options. This can severely limit your choices and often force your hand into accepting poor quality secured loans that may put your credit rating at further risk.
If you are seeking out a working capital loan with bad credit, it’s helpful to find a provider that specialises in securing business loans. This will involve looking at their track record and being walked through the process, allowing you to make the most of a potentially difficult situation.
If you want to learn more about working capital loans, our team at Capital Raise have you covered. With a comprehensive range professional experience, our team will work with you to make your application process simple and find the right product for your unique business needs.