Working capital is the DNA of your business
It determines your path of growth, and if growth is indeed possible.
Positive working capital is important to be able to maintain and grow your business. Working capital finance is used for short term investments with loan terms of 3 months to 2 years.
Working capital determines your business’ ability to invest in and grow your business. No capital = no growth.
What is working capital?
Your working capital is your short term (current) assets less your short term (current) liabilities. Current means anything that will convert to cash within 12 months. For assets this includes inventory, actual cash and money owed to you by your customers. For liabilities — any short term debt, money you owe to your suppliers and other upcoming expenses.
When would you want working capital finance?
Working capital finance provides additional money for you to best maximise your business’s opportunities over the next 6-12 months.
It’s important to have positive working capital to maintain and grow your business. Purchasing extra stock or inventory, fitting out offices or retail outlets, opening a new office, expanding an existing business division or setting up a new one all require working capital to make it happen (if you don’t have the money you can’t invest in growth).
Types of Working Capital Finance available:
Working capital finance is for medium-term investments with loan terms of 3 months to 2 years.
Line of Credit
A line of credit is a loan with a redraw option. The credit is revolving, meaning that even though you make repayments you can re-draw up to your agreed limit, as and when you need it.
Short Term Unsecured Loan
This is a business loan that is processed quickly and uses your business’s future cash flow as security.
Standard Bank Loan
A traditional bank loan that is secured against real assets (vehicle, house, land, commercial premises, or other business assets). As the security on this loan acts as a guarantee for the bank, interest rates are lower.