Working Capital Lending

When your small business needs to maximize cash flow, a working capital loan might be the solution.

How Much Working Capital Do You Need?

Calculating the amount of working capital your business needs comes down to a relatively simple formula. In general, working capital is the difference between current assets and current liabilities. However, that number likely changes each month as bills get paid.

A better way to gauge how much working capital your business needs is based on your operating cycle -- the amount of time it takes your business to create and sell a product.

For some businesses, like a restaurant, the cycle is very short. For others, like a clothing manufacturer, it’s much more seasonal. You’ll want to take into account your cash flow during each operating cycle to determine how much working capital you’ll need.

Sometimes, the unexpected happens. Kitchens have fires, equipment requires repairs, taxes must be paid. To solve these problems, we can have the money you need deposited into your account within 24 hours.

What kinds of working capital are available?

In general, there are three types of working capital financing. These include:

  • Term Loans: What you probably think of when you think of a loan -- it has a set term, interest rate and payoff schedule.
  • Business Line of Credit: These work a lot like a credit card, in that you have a line of credit limit and interest rate, and you must make a payment each month, but you can borrow and repay the loan as needed. And you can typically borrow much larger amounts than you would be able to finance with a credit card.
  • Merchant Cash Advance: This kind of loan treats your future revenue as collateral against your financing. That means you’ll be able to borrow against a certain percentage of monthly revenue generated by your business, and the lender will expect to be paid back when you’re paid. You can typically choose between a fixed payment, or one that fluctuates with monthly revenue.

What does it take to qualify for working capital financing?

Credit Score Typically, personal credit scores aren’t as important as other commercial credit factors. However, a good rule is that if your FICO score is over 500, you’re in the clear!
Time in Business We look for at least 6 months of time in business.
Revenue $10,000/month or $120,000 in annual sales with a minimum of three deposits/month.
Is US Citizenship required? Having US citizenship isn’t required. Credit Sharks only requires that the business owner be a legal resident.
Ownership Any owner can execute the contract regardless of their ownership percentage

Using Your Loan