Working capital is the fuel that keeps your business running day to day. When cash flow gets tight, the right funding solution can mean the difference between seizing an opportunity and watching it pass you by.
Working capital is simply the difference between your current assets and your current liabilities — in plain terms, it's the cash available to cover your day-to-day operating expenses. Payroll, inventory, rent, supplies: all of it runs on working capital.
Most businesses experience cash flow gaps at some point. A big client pays late. You need to stock up before your peak season. An unexpected expense hits. Working capital financing bridges those gaps so your operations don't skip a beat.
A general rule of thumb is to have enough working capital to cover three to six months of operating expenses. Most lenders look at your monthly revenue to determine what you qualify for — typically you can access somewhere between one and two times your average monthly revenue in working capital.
If your business does $30,000 per month in revenue, you might qualify for $30,000 to $60,000 in working capital. Businesses doing $100,000+ per month can often access $150,000 to $300,000 or more.
Revenue-based working capital advances funds based on your business's monthly deposit history rather than your credit score or collateral. Decisions typically come back within hours, and funds can be in your account in 24–48 hours. This is the fastest option for businesses that need capital quickly.
Best for: Businesses with $15,000+ in monthly revenue, 1+ years in business, and an immediate capital need.
SBA working capital loans and traditional bank lines of credit offer lower rates and longer repayment terms than revenue-based options. The trade-off is time — the application process is more involved and funding can take one to three weeks.
Best for: Established businesses with solid credit history that don't need capital urgently.
Working capital is flexible. Common uses include inventory purchases ahead of a busy season, covering payroll during a slow period, marketing and advertising spend, equipment repairs or upgrades, paying vendors and suppliers, hiring additional staff, and bridging the gap while waiting on client payments.
Requirements vary by product, but most working capital financing programs look at time in business (typically 1–2+ years), monthly revenue (usually $10,000–$15,000 minimum), business bank account deposit history, and credit score to varying degrees depending on the product.
Revenue-based programs are far more flexible on credit than traditional bank loans, making them accessible to more businesses.
Choose the funding path that fits your timeline and situation.