Fast, Easy Working Capital Loans
Are you looking for working capital loans to fuel your business’ performance and explode its growth and increase profits? Sunwise Capital can help you qualify for a fast and easy business loan to invest in new technology or equipment, secure inventory at a greater discount, initiate a marketing or advertising programs, bring on new employees or just increase your daily revenue.
Flexible Working Capital and Business Loans:
$25,000 to $500,000
Working Capital Loans for Small Businesses
No restrictions for how to use capital.
We say “YES” to:
NO Application Fee
NO Prepayment Penalties
NO Hidden Charges
Most recent years’ annual business income at least $200,000
At least 1 of the last 2 years you must have business net income of minimally $0 or better
2 years in business minimum
Bankruptcies (OK over seven years) and NO criminal activity
No current tax liens or judgments
Working Capital Working to Build Your Business
What is “Working Capital?”
The text book definition of working capital is, “the capital of a business that is used in its day-to-day trading operations, calculated as the current assets minus the current liabilities.”
According to the SBA, you need working capital to continue your day to day operations. There is no question that lack of working capital limits your ability to maintain your business operations.
Technically, current assets are your most liquid assets. Typically, they include cash or any asset that can be liquidated quickly. Real estate, as an example is not considered a liquid asset.
On the flip side, current liabilities are those obligations that are due within a year.
What is left over after subtracting your current liabilities from your current assets is your “working capital.” This is the money that is used to pay your current debts. It also is your margin.
Your goal as a business owner is to make sure that your working capital exceeds your current liabilities. This surplus means your business can continue to meet its current liabilities and can operate. Naturally, the company that has challenges meeting its current liabilities runs a greater risk of financial hardship or even bankruptcy.
Business owners are always telling us they need “working capital.” We believe the term is one of those euphemisms that are used for other terms such as:
- Line of Credit
- Working Capital Loans
- Working Capital Financing
- Business Loans
- Business Working Capital Loans
- Bad Credit Working Capital Loans
- Business owners in over 700 industries realize that Sunwise Capital has multiple working capital loan options. This includes getting business working capital loans to fit your business, even working capital for an online business.
Are There Different Types of Working Capital Loans?
The short answer is, “Yes.”
Here are some examples:
Some banks offer a limited credit line, like a credit card giving you a spending limit. Either one gives you a bit of a safety cushion.
Here is how it works. The bank allows you to make purchases with your debit card or a check, even if you don’t have the funds in your account to cover the purchase. This is the overdraft protection and in effect, this is a short-term loan. The pros are that you have an emergency back-up. The cons are that it’s expensive.
B. Trade Credit is when a current supplier offers you a “trade facility.”
This “credit’ is when there is an arrangement between you (your business) and your vendor. The vendor allows you to buy either goods or services without making an immediate payment.
First, you typically need an established history with the vendor. They also want a business that historically takes large orders. The caveat here is that you can expect to undergo a thorough credit check both personally and in your business.
As your business grows, this becomes an essential tool to help you grow your business.
I can tell you personally that after I developed a strong relationship with one of my marketing and advertising companies I was able to extend my terms to net 90. What that means is that I could purchase advertising today and not pay for it for 90 days. That gave me an opportunity to recoup most if not all my funds invested in the marketing by generating the revenue quickly.
I then put the payment due on my American Express business credit card. This gave me another 30 days before the money was “technically” due. It was more than ample time to play the float and increase my cash flow. This in turn enabled me to invest even more into my marketing which helped take my monthly revenue from a few thousand a month to well over $1,000,000 a month.
The cost of trade credit can be expensive. I respectfully disagree if with those who make those claims. You will hear this argument. Your vendor extends you credit terms. They give you net 30. This means the money is due in 30 days. They also give you a three percent cash discount if you pay within three days.
The argument is that if you don’t take the cash discount, it will cost you an additional 3% per month. Multiplied over the course of a year this will cost you 36% more per annum.
I’d argue that if you have the free cash flow then get the discount. On the other hand, I’d probably work with my vendor over time to get that to net 45 or if you’re good net 60.
One client once told me that if he had another 15 days to make his payables that he’d be retired. It’s all about your cash flow.
C. Equity Investments will bring cash into the business.
This is a form of working capital. It can be funding from your personal resources like a 401K or IRA, a home equity loan or Home Line of Credit (HLOC). This funding includes investments from investors or family and friends. This type of funding is ideal for the newer business.
If you have poor personal credit and you are unable to get any other type of loan then getting an investor may be a good idea. Just remember that you will give up a percentage of your business in exchange for that investment of capital. It’s usually very expensive (think “Shark Tank” or Marcus Lemonis from “The Profit.”).
Anyone who makes an equity investment into your business is buying a percentage of the ownership. In exchange for shares in your business the investor provides working capital. The money typically can be spent on anything from capital expenditures used for expansion to hiring new employees, equipment or to buy out another owner.
The good news is that you get the money you need to keep things going. The challenges are that you will be giving up some control of your business. It will depend on what percentage you sell.
My personal experience is that your best negotiating position is before you launch your business. There are too many factors that will determine how much of your business you sell to cover them all in this discussion.
Suffice it to say that once you’re operating and you run out of money the investor will usually demand the greatest amount of equity. This is where the sharks enter the pool.
The best way for me to explain it is like this. You potentially are selling a 51% ownership in your company. You probably have forgotten more about your business than the investor will ever know. Once you lose control you are now an employee of the company and you have a new boss. As you can see I have a bias and this must be viewed properly. By no means should you let me dissuade you if this is the best or only option for your survival.
D. Accounts Receivables Loans: In its simplest terms the accounts receivables loans are a type of financing that uses assets, in this
In its simplest terms the accounts receivables loans are a type of financing that uses assets, in this case the company’s receivables to secure financing. Receivables are outstanding invoices or simply money owed by customers. These invoices are then used as collateral to secure the financing.
This type of financing or factoring has been around almost forever. You can find examples of this financing going back to the merchants in Egypt. The basic process is that the business owner will “sell” their receivables to the factor. The factor in this case is the company that lends the money.
Naturally there are some good and bad points to this type of financing. The good is that you receive your money immediately. This is fast cash! This enables you to free up working capital to work right away.
You’re spending less time collecting money from your customers, accelerating the time from sale to payment. Just think what reducing the amount of time it takes to get paid.
Your invoice becomes your collateral. There are no additional assets to use as collateral to secure the financing. You’re leveraging what assets you have. Perhaps most importantly is that you keep control of your business. You are not selling equity in your business and it provides an excellent opportunity to develop a long-term relationship with the lender.
You can think of it this way. It’s like your company selling its debt to a collection agency. You are no longer responsible for collecting the invoice or money owed. The customer now pays your lender. For some business owners relinquishing control over the invoices or the preserved “selling” of invoices carries a somewhat negative connotation. The stigma is that the business selling their invoices is a company that is cash strapped or potentially in a weak position. There is a bit of loss of control in one part of your business; the collection of invoices. Lastly there is a cost to do this type of financing that may or may not be more expensive than other types of working capital loans.
Other perceived negatives are the contract length that may extend for two to three years and the cost or rate is predicated on your client’s business credit rating. This means the riskier the lower the customers’ business credit rating, the more expensive it will be to you.
Finally, is the actual collections process. If your customer fails to pay your costs will increase and you may or may not be fully responsible for the repayment to the lender.
We are only covering the very basics here and there are more details to consider when contemplating this type of financing.
E. Factoring or Business Cash Advances:
Factoring is a loan based on future sales. This is slightly different than the accounts receivable loans. The difference is that with accounts receivables the sale is already made. The business cash advance is taking a snapshot of the past sales and then looking forward to getting an indication of anticipated revenue.
Factoring, simply mean a business sells it invoices or receivables to a third-party lender of financing company known as a “factor.” Some in the industry call it “accounts receivable financing.”
Technically, this is not a loan. You are selling your receivables at a discount. In exchange for this discount you are getting the cash today. Personally, I think the best way to look at it is like this: Imagine that you are a retailer. It doesn’t matter if it’s clothing, food or widgets. You normally sell your item wholesale for $1.00. Most of your customers pay you in 30 days if you are lucky. The bigger customers pay you in 40 odd days and if it’s a Walmart of Best Buy you’re lucky if you get paid in 60 days.
You decide that to get capital back quickly in your business you’ll offer a discount to anyone who pays in cash within 5 days. In fact, you’ll offer the same goods that you sell for one dollar to your fast paying customer for 96.5 cents. Essentially you are offering a 3.5% discount.
Now reverse the process. The factory will buy 100% of your future sales (receivables) at a discount. Make sense?
One type of factoring is the cash advance. The business cash advance is also known as the merchant cash advance or MCA. This type of loan is not based upon the business owner’s credit. As a result, it’s perfect for those that need working capital when you have bad credit.
However, it’s not just a bad credit business cash advance. Plenty of business owners with personal credit scores in the 600’s and even 700’s look toward the merchant cash advance for their working capital. It can be for the speed and convenience. Sometimes it’s because of the type of industry.
The pros are you get cash fast. Literally in a day or two. There is very little paperwork. The payments are not fixed. They are variable. There is also no fixed term for total repayment. What this means to you is that it reflects your cash flow and will not bind you to a fixed payment. This affords better cash management. The approval rates are high. Personal credit or assets are typically not considered. No collateral is necessary. These are unsecured loans (again not a loan but a cash advance).
The cons are higher rates and associated fees. Some will say the fact that it’s not a fixed payment with a fixed term is a disadvantage. You can consider a small business loan that provides the same amount of working capital to your business with no assets or collateral even with bad credit. You may find that the rates and terms are even better.
F. Debt Investments.
For most business owners, the “debt investment” is called a business loan. This is when one entity provides you with the requested capital in exchange for repayment of the principal along with interest.
Often, we are asked, “which is better; the equity or debt investment.” The only answer is; “it depends.”
For you the business owner you have a wide number of alternative type of lenders and loans. It can be SBA loans, term loans, merchant cash advances or unsecured loans with bad credit and more.
Unfortunately, business working capital and bad credit is a bit of a challenge. What’s not a challenge is getting a small business loan that is more forgiving, especially when it comes to your credit score.
If you’re ready to improve your business’ performance, jumpstart growth and increase profits, we’re here to help.
We work with business owners just like you every day to find the easiest and least expensive way for your business to access a working capital loan. Our trusted small business loans feature:
Top 10 Uses for Working Capital Loans
When a company is large enough, successful enough and well-established enough, working capital doesn’t tend to be an issue. Startups and small businesses, however, don’t have it that easy.
For many small businesses, revenue fluctuates throughout the year. Others have such small margins that a single unexpected event can throw them into financial crisis.
If you own a small business and are tired of living on the edge, working capital loans from Sunwise Capital may be the answer. We offer a fast, streamlined loan approval process that flies in the face of traditional business lending. Find out how we can help.
Forget Working Capital Loans from Banks
If you’re in a position where you need working capital, you’re highly unlikely to be approved for a loan from a bank or other traditional lender. They typically require substantial collateral and assets, and most require personal guarantees from owners. In other words, your personal credit goes on the line.
Your personal credit score is also factored in, so if you have bad credit, you will be denied. Getting business capital financing is far more straightforward with Sunwise Capital. All that we require is the completion of an online, one-page application and the most recent three months of your business bank statements.
Flexible Working Capital Business Loans
With traditional business loans, you are usually tightly constrained by strict terms. Many times, those terms don’t mesh well with the way in which your company operates. Sunwise Capital does not provide one-size-fits-all working capital loans.
Rather, we offer a vast array of loan solutions that are then customized to suit your needs. Depending on eligibility, you can choose from capital loans with terms ranging from one to five years and daily, weekly and monthly payment plans. Many members of our team are former small business owners, so we understand.
Business Capital Made Easy
Whether your need for extra working capital came on suddenly or gradually, knowing where to turn–and knowing that you’ll get financed–is incredibly reassuring. If you suddenly need some capital to cover bills, expenses or anything else, we offer same-day approval and next-day funding on loans of up to $150,000.
Unlike banks and other lenders, you don’t have to explain to use precisely why you need the money. Our goal is to get you your working capital fast, so we cut right to the chase. With our convenient working capital loans, keeping your business on the right track is a snap.
There is no cost or obligation when applying for working capital business loans from Sunwise Capital. Applying is free and easy. Most people complete the application in a handful of minutes. If you are approved, you will be presented with the available options. However, you are not obligated to take any of them.
Finally, if you track down the same loan with a better interest rate, we will beat the rate or pay you $500. With these perks, there’s no reason not to apply, so go ahead and apply today.
To help you simplify the whole process we recommend that you speak to one of our loan specialists who can step you through all your choices. Find out today what a working capital business loan from Sunwise Capital can do for you!