Having working capital available is essential for any business to succeed. Working capital loans offer companies a reliable way to finance operations and manage cash flow, allowing them to cover costs associated with running their business while also taking advantage of new opportunities that arise. With working capital loans, businesses can manage invoice delays, plan for long-term projects, and more.
TAB Bank offers working capital solutions tailored to the needs of each individual business—with competitive rates and flexible terms that make it easy for companies to access the funds they need when they need them.
Let’s discuss why working capital loans can be essential for businesses, what types are available from TAB Bank, how working capital loans can help with cash flow issues and operational costs, as well as other benefits you can take advantage of by using working capital solutions from TAB Bank.
What is a working capital loan?
A working capital is an accounting term referring to a company’s liquidity: a company’s ability to generate cash from assets or obtain loans in order to meet short-term liabilities and obligations.
A working capital loan is a type of financing used to cover the short-term operational costs of a business. The loan can be used to cover the gap between expected revenue and expenses. Working capital loans are crucial for companies that experience fluctuations in their cash flow, such as seasonal businesses or those undergoing a business restructure/turnaround. A working capital loan can also help improve a company’s working capital ratio, which measures a company’s financial health.
If a company has to wait 30, 60, or 90 days to get paid for invoices, working capital loans can help by giving them more cash flow in the meantime.
How are working capital loans used?
With working capital loans, a business can either sell its invoices to a third party at a discount in exchange for immediate cash or leverage them alongside other assets (such as equipment or inventory) as collateral to secure the loan. This allows businesses to access much-needed cash flow to meet short-term financial obligations and keep their operations running smoothly.
What types of working capital loans does my business need?
The working capital loan that’s right for your business depends on the size, industry, and immediate needs of your company. TAB Bank offers working capital solutions designed to meet the demand of a range of businesses—from small companies to large corporations.
Accounts Receivable Financing
Accounts receivable financing (A/R) allows businesses to use their unpaid invoices as collateral against a line of credit. TAB monitors your outstanding accounts payable to determine the appropriate line size for your business. As sales increase, so does the availability of funds for your company.
Asset-Based Lending
Asset-based lending (ABL) is also referred to as commercial finance or asset-based financing. ABL is a secured loan option where your business puts up collateral such as accounts receivable, equipment, and/or inventory. TAB Bank offers ABL services to businesses, not consumers, with lower interest rates due to collateral protection against default.
Factoring
Invoice factoring is a popular financial solution that quickly converts invoices into cash, eliminating the waiting period between when you invoice your customers and when their payments are received. TAB Bank offers invoice factoring services to B2B companies seeking an alternative to traditional business loans or lines of credit. This method allows you to sell your invoices at a discount to TAB which provides faster access to earned funds, which can be utilized to drive business growth and expansion.
How can working capital loans help my business?
Working capital loans can be a helpful solution for businesses struggling with cash flow, operational costs, and invoice delays. By providing easy access to funds, working capital loans enable companies to cover their expenses and keep their operations running smoothly. This can help alleviate the stress of waiting for customers to pay invoices or dealing with unexpected expenses. It also helps businesses maintain positive cash flow and avoid financial strain.
Additionally, working capital loans can provide flexibility in managing finances through seasonal fluctuations or other changes in demand or production. Overall, working capital loans can be a valuable tool for businesses looking to improve their cash flow management and address short-term financial needs.
Benefits of working capital loans
Working capital loans offer several benefits for businesses seeking immediate access to funds. One of the primary advantages is speed – once approved, working capital loans allow cash to be disbursed quickly, providing companies with the cash they need in a timely manner.
Additionally, these loans give business owners greater control over their finances by providing flexible repayment terms and allowing them to choose how and when the funds are used.
Another key benefit of working capital loans is that businesses don’t have to wait for cash – they can receive the funds they need right away, which can help them cover unexpected expenses, manage cash flow fluctuations, and pursue growth opportunities without delay.
Overall, working capital loans are a valuable resource for businesses looking to stay competitive and agile in today’s fast-paced economy.
Why should you choose TAB Bank for working capital loans?
TAB Bank is an excellent choice for businesses seeking working capital financing because we specialize in funding deals that many traditional banks can’t, providing companies with access to the capital they need to grow and thrive.
If your business has reached its credit limit or needs new financing, TAB Bank may be able to support you to keep moving forward. Our financing solutions are designed to help businesses of various sizes and industries to overcome financial challenges and achieve their goals, even when traditional lenders cannot provide the necessary funding.
At TAB Bank, we prioritize building strong relationships with our clients and take the time to truly understand your unique business needs. This enables us to provide tailored financing solutions and ongoing support to help you achieve your goals.
With nearly 25 years of banking experience, TAB Bank is committed to providing personalized care and customized financing options that meet each client’s needs. Our team of experienced professionals works closely with businesses to understand their specific goals and challenges, allowing us to provide tailored solutions that help them achieve success.
Let’s Find The Right Solution For You.
Wondering how we can help your business? Please fill out the form below to request more information and connect with one of our lending specialists.
This form is not an application for credit and you will not be asked to provide any confidential business or personal information (EIN, SSN, etc.) at this point in the process.
