Working Capital Loans
This type of loan has the purpose of financing the everyday operations of a company. It is used to cover accounts payable, wages, etc.
Working capital loans are ideal for short-term operational needs. Getting access to this type of loan is usually quick and it can be used to cover any gaps quickly.
There is no equity transaction required, which means that you can maintain full control of your company. You won’t have to give up any company equity in exchange for the loan. In most instances, working capital loans are unsecured, so there is no collateral required.
Many small businesses use the bank overdraft facility as a way to maintain a healthy cash flow. The borrower only pays for the interest applicable to the amount that has been overdrawn. This type of loan can be a handy way of getting capital loans.
The amended National Credit Act has made it easier for business owners to access cash. The growth of the micro lending sector has created more avenues for access to cash. Applying for micro loans means that business owners typically have up to 12 months to repay the loan. There are usually fixed interest rates and fixed repayment periods.
Some micro lenders may require collateral from small businesses, while many provide unsecured capital loans.
Business Credit Cards
Business credit cards can be quite useful for a business’ capital needs. Credit cards are essentially unsecured business loans. Loan limits are based on personal credit scores and not your time in business, so how much you qualify for is dependent on how well you pay your credit providers.
If you need to buy equipment in order to be able to run your business efficiently, business credit cards can be regarded as forms of capital loans.