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What are Working Capital Loans?

There’s nothing more stressful for a business owner than not having enough cash to cover working expenses or other operational costs. Working capital loans are the perfect solution to the slow rigorous bureaucracy we call banks.

Most business owners find themselves in need of extra cash at some point in the company’s lifetime. Slow sales, new competition, a seasonal business model, unforeseen circumstances and unexpected opportunities are all factors that can cause cash flow problems.

Worst of all, these kinds of issues usually crop up when we least expect them to.

Everything is smooth sailing until it isn’t, and when these financial crunches occur in most businesses there’s little opportunity to correct course fast enough to avoid some pretty sticky financial situations.

Fortunately, there are working capital loans – just the thing your business needs when you’re in need of an immediate injection of capital. Financial packages like these can get you out of those sticky situations and actually position you for success at the same time.

Do I need working Capital Funding?

Whether you are having trouble paying your operating expenses, have an equipment breakdown or just a slow month, working capital loans are at your disposal (usually with just a click of a few buttons). These are the kinds of loans that can save your bacon before it hits the frying pan.

Working capital loans give you the ability to pay those working expenses and continue daily operations while generating the revenue necessary to run your business smoothly without sweating a temporary crunch. You’ll be able to keep rocking and rolling, striving for that positive cash flow you need as a business, without having to wonder where the next big financial crunch in your operation is going to come from with the help of working capital loans.

With the evolution of Fin-Tech, you’re not limited to a single type of business loan product. Excel now offers a variety of Working capital loan options all catered to your specific business needs.


Complete our online application and discover how much you can be approved for: Apply Now


In short working capital loans is any cash or credit usually delivered via a business line of credit or an unsecured business loan or any other type of financing which offers a solution to a business’ day-to-day operations and financial needs. The beautiful thing about acquiring working capital for your business is the fact that it can be used for virtually anything (as long as it pertains to the business itself). Here are the top five ways in which many business owners choose to use their working capital.

What is Working Capital

Working capital is any form of cash or funding that is used to operate a business. Most business owners look at working capital as the lifeblood of operations. It helps keep things running smoothly and efficiently. Without working capital, expenses can’t get paid and can be harmful to your business existence.  Working capital can be acquired or saved but it is the cash available to use on a day to day business to operate a business.

What Are the top 5 Uses of Working Capital?

We have helped deliver capital to thousands of business owners nationwide and have seen it all. We have put together what we see the most often.

Inventory and Equipment Purchases

Many business owners choose to use working capital to take advantage of bulk pricing on inventory and equipment. Similarly, equipment such as machines, computers, vehicles, and more can reach well into the thousands of dollars. Because many vendors require a large upfront payment for this type of pricing on inventory and equipment, working capital gives business owners the funds they need to purchase the items they need before it’s too late.


Once your business gets through the startup stage and figures out a regular routine, the best time is when there is just too much business to keep up with!

Many business owners find themselves needing to expand and grow to keep up with the demand. Working capital can be put to use to open a new location, build onto an existing location, add on additional parking, and much more!

The Net Working Capital Formula can also provide you with a chance to take advantage of hot opportunities that may not present themselves ever again, even if your cash and capital reserves on hand right now aren’t quite as viable as have like them to be.

These are the kinds of opportunities that can explode your business capacity, take you to the next level professionally, and open up a world of financial opportunity that simply wouldn’t have existed otherwise.

Unfortunately, no one really knows when these financial opportunities are going to start knocking at your door – but luckily, with the help of working capital loan packages and the Net Working Capita Formula you will be able to jump on board the chances for growth whenever and however they present themselves.

New Hires and Employee Training

Another form of expansion can be hiring new employees. Once your business starts to boom, you may need some extra help. Maybe you want to hire additional cashiers for your store. Maybe your restaurant needs additional wait staff. Maybe your doctor’s office needs another receptionist. Maybe you even need to hire a few accountants to help take care of your finances. Additionally, many of these employees will need adequate training. Working capital can be used for all of these things!

Unforeseen Problems

Unfortunately, with every business, problems do arise. Equipment fails, vehicles breakdown, natural disasters occur, employees, leave. The headaches are unforeseeable and can be expensive, but working capital can help to cover the costs in a matter of a few days.

Business Expenses

By acquiring working capital loans for your business, you will be able to pay for things that may have been unaffordable in the past. You may need office supplies, new computer software, or you may have a few bills to pay. These payments can all be made possible with working capital.

At the end of the day, the right working capital loans have the potential to help you build and grow the kind of business you’ve always dreamed of owning and running.

Before acquiring a working capital loan it is very important to understand the cash flow of your business and how a business capital loan can affect the bottom line. 

The working capital formula is crucial in understanding this.


What is the Net Working Capital Formula?

Before you jump into the Net Working Capital Formula you have to understand what is net working capital. Net working  capital is used to calculate the liquidity of a company by calculating its current assets that can be used to pay off its current liabilities. This calculation is very important as it’s used by company executives, vendors and other creditors to see how efficiently the company case use its assets and get a general idea of the company’s short-term liquidity.

The amount of current liabilities a company has in the current year is the primary focus of the Net Working Capital Formula which focuses account payable, any sort of debt from trades and also notes from other vendors.

On top of that, you’re also going to have to fundamentally understand the Four C’S Of Credit and how they are going to impact your ability to take full advantage of net working capital loans(as well as how they are going to impact your viability as an entrepreneur and business owner in general.

A lot of business owners and operators are under the impression that they’ll be able to utilize nothing more than their sales, revenue, and other business assets to take full advantage of financing packages from operations like net working capital.

And while that may be true to a point, at the end of the day the Four C’S Of Credit are always going to have an impact on your finances – and you have to be sure that you are doing everything you can to maximize those key criteria to leverage financing as often as possible to grow your business and accomplish the kind of financial future you’ve always dreamed of.

We’ll dig a little bit deeper into the working capital formula, the 4 C’S Of Credit, and how they all come together in the Net Working Capital Formula in just a moment.

To calculate the Net Working Capital Formula you have to all the current liabilities your company has from all the current assets of your company.

The assets that are put into consideration when calculating the Net Working Capital Formula are current cash, account receivable, all investments (short-term) and the current inventory the company has. These are the assets that have the most viability to financiers like net working capital, and they are the assets that are going to shine the brightest light on the financial health and wellness of your company on a regular basis.

It’s critical that you are able to produce information pertaining to these core assets before you get started looking to leverage the working capital formula. You’ll need to know exactly where you stand as a business financially before you start to dive deep into these opportunities, and only your own accounting will be able to provide you with those kinds of answers.

The current liabilities include account payable, taxes, all sorts of stacked investments, debt from trade and deposits from various customers. Liabilities should be kept to as much of a minimum as possible for smart and savvy business purposes, and companies that have a negative cash flow – as well as anything but solid 4 C’S Of Credit – are going to have a really tough time taking advantage of any financing packages.

At the same time, The Net working Capital Formula is always trying to help entrepreneurs and business owners across all industries and with a multitude of different financial outlooks. It’s still a good idea to reach out to our operations to see if you can take advantage of the working capital formula, even if your liabilities are a little bit higher than you expected or anticipated upon closer look.

A Better Understanding of the Four C’S Of Credit

Every financial lender out there is going to take four key criteria into account when they are trying to decide whether or not you qualify for working capital loans or financial packages, and those four key criteria make up the “4 C’s of Credit” that we’ve been talking about.

These criteria include:

  • Your character
  • Your collateral
  • Your credit score/credit history and
  • Your capacity to repay loans moving forward

Each of these four key criteria are big pieces of the credit puzzle, and it’s important that you do absolutely everything you can as an entrepreneur to maintain good character, to have collateral available to put up to secure the kinds of financing you need, to improve your credit score and bolster your credit history, and to prove your capacity to repay loans and financial packages with a positive cash flow.

As a nontraditional lender, net working capital has its own proprietary working capital formula to work off of when determining the worthiness of the applicants. But we can tell you that the Four C’S Of Credit are always going to play a role in this determination. It’s important that you do everything you can to improve those criteria, patch of any holes, and recover from any dings or dents that may have hit your credit in the past.

The Net Working Capital Formula has been designed to make it as easy as possible for qualified entrepreneurs to leverage cash and capital when they need it most, and while it relies on the Four C’S Of Credit for sure to boost and build your business there’s a lot more that goes into this formula man is immediately apparent on the surface.

To learn a little bit more about the working capital opportunities available, or to see if you qualify for these kinds of financial packages now, reach out at your earliest opportunity. We would be happy to talk a little more about how we might be able to build and grow your operation by working together!

Complete our online application and discover how much you can be approved for: Apply Now