Also called: Cash flow funding
Working capital
Working capital is the money a business has available to fund day-to-day operations, usually measured as current assets less current liabilities. Working capital finance covers timing gaps between paying costs and receiving customer payments.
What is a working capital?
Working capital is the money a business has available to fund day-to-day operations, usually measured as current assets less current liabilities. Working capital finance covers timing gaps between paying costs and receiving customer payments.
Example
A business with $340,000 in debtors and stock and $210,000 in short-term liabilities has $130,000 of working capital.
Why it matters
Profitable businesses still fail on timing, which is why funding the gap matters as much as funding growth.
Where you will see it
Business line of credit, Business overdraft, Invoice finance