Working Capital Loan

Need funds to keep your small business or franchise running smoothly? A working capital loan provides the cash flow to cover daily operational expenses, ensuring your business thrives. Whether managing payroll, purchasing inventory, or bridging seasonal gaps, this financing solution offers flexibility and support. LoanBox simplifies the process, connecting you with lenders tailored to your needs.

What Is a Working Capital Loan?

A working capital loan provides short- or medium-term financing to cover everyday business expenses, ensuring operational continuity without tapping into personal or long-term capital.

Purpose: Fund operational needs like payroll, rent, utilities, inventory, marketing, or seasonal fluctuations.

Use Cases:

  • Pay staff during a slow season.

  • Purchase inventory for a busy period.

  • Cover unexpected expenses like repairs.

    Benefits:

    • Cash Flow Stability: Maintain operations without disrupting revenue.

    • Quick Access: Fast approvals for urgent needs, especially with SBA Express loans.

    • Flexible Use: Apply funds to any operational expense, unlike equipment-specific loans.

Loan Uses & Purposes

Can be a single purpose loan or is also added to other loan purposes like purchasing a business or in a debt refinance loan.

  • Payroll

  • Inventory

  • Marketing

  • Advertising

  • Operational Expenses

  • Technology Upgrades

  • Renovations

  • Growth and Expansion

Frequently Asked Questions (FAQ)

Q: What expenses can a working capital loan cover?
A: You can use funds for operational costs like payroll, rent, utilities, inventory, marketing, or seasonal expenses. SBA loans restrict funds to business purposes, excluding personal or speculative uses.

Q: How much can I borrow for working capital?
A: SBA 7(a) loans offer up to $5 million, Express loans up to $500,000, and Microloans up to $50,000. Conventional loans vary. Borrowing depends on your financials (e.g., DSCR 1.15+, credit) and cash flow needs. LoanBox maximizes your capacity.

Q: Do I need a down payment for a working capital loan?
A: No.

Q: Will I need to pledge my home as collateral?
A: For SBA loans over $350,000, business assets are primary, but personal real estate with 25%+ equity may be required if assets are insufficient. Express loans ($50,000 or less) and Microloans may skip collateral. A HELOC can avoid home liens. Conventional loans may have similar requirements. LoanBox optimizes collateral strategies.