Working capital pays suppliers, staff and operating costs while a business waits for customers to pay. Finance can help bridge a timing gap, but should not disguise a structural problem.
When gaps arise
Seasonal businesses may need stock and staff before a busy period. Other businesses may wait on debtor payments while supplier invoices fall due. Inventory, repairs and growth can also create pressure.
Common funding structures
An overdraft or line of credit may provide flexible access up to an approved limit. A term loan may suit a defined one-off need. Asset finance, debtor-related facilities or trade funding may also be considered, depending on the purpose and lender policy.
Assessment and risks
Lenders may review financial statements, tax information, bank statements, debtor days, supplier terms, inventory, seasonality, existing liabilities and how the facility will be repaid. Ongoing borrowing to pay ordinary expenses may indicate an operational problem that finance alone will not solve.