Friday, 12 May 2017

WHAT ARE CAPITAL LOANS, AND WHY ARE THEY IMPORTANT?

Working capital is the money that’s used to finance a company’s day-to-day operations. Small businesses rely on working capital to pay their bills, cover payroll, buy inventory, invest in tools and technologies, and support marketing initiatives, among other things.
As every small-business owner knows, running a company is hard work. When money’s tight, it can be quite difficult to keep the doors open and the lights on while continuing to run things smoothly. For this reason, 53 percent of small-business owners have sought outside financing over the last five years.
Once a small-business owner decides to look to outside sources for financing, it quickly becomes apparent that there are a number of options to choose from. Many small-business owners end up taking out working capital loans, because they favor debt financing instead of having to sell equity to an investor and therefore losing control over their company in the process. Working capital loans are often quite easy to obtain.
Working capital loans come in all shapes and sizes. You can find lenders that will offer you secured working capital loans that require you to put up collateral to obtain. You can also find lenders that offer unsecured capital loans that require no such collateral—which means that in the event you’re unable to repay the loan and your business goes under, you won’t have to worry about losing your personal property in the process. Depending on the lender that your small business chooses to partner with, you may be able to secure a capital loan worth up to $1 million.


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