Commercial and Business Financing
"Our clients are the most important people to this company."
David Marcantonio, President
Action Funding, Inc.
61 Commercial Blvd.
Torrington, CT 06790
1-877-599-6906
Member of:
NAMB, CMBA, FSMB
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 | Working Capital
Working Capital Loans:
Having the right tools for the job
Working capital financing can be a valuable tool in assisting growing companies as well as those that are in transition. This type of financing is also known as "asset based financing," "working capital financing," or "commercial revolving lines of credit."
Why Working Capital Financing
Accounts receivable financing provides a company with a liquid source of funds, the best use of which is to promptly pay vendors, so that an ever-increasing amount of sales volume can be sustained.
Loan proceeds taken from the asset side of the working capital cycle of the business invested in fixed assets, for example, reduces the size of the cycle, and limits the more profitable use of our money.
Uses for Working Capital Financing
Working capital financing can be used to:
Take advantage of trade payable discounts;
Support the purchase of inventory necessary to fund continued growth in sales;
Bridge the timing gap between expense obligations (i.e. payroll, trade suppliers, fixed and variable expenses) and timing of collection of accounts receivable.
Types of Working Capital Lenders:
Bank Asset Based Lenders
Commercial Finance Companies
Factors
Each of these lenders has a specific risk profile and can fill a specific need of a borrower.
Care needs to be taken in matching the right lender to the right borrower and borrowing need. Banks tend to be risk averse while factors are willing to take on higher levels of risk. With this increase tolerance for risk there are typically higher costs, higher levels of scrutiny, more frequent reviews and more required ongoing documentation of collateral.
So remember, working capital financing can be a valuable tool in leveraging a company's short-term assets (i.e., accounts receivable and inventory) in order to assist them in meeting their short term and long term goals. The key is matching the right type of lender to the client's borrowing requirements.
Certain rules and restrictions apply.
Terms of program may change without notice.
Contact us today for more information.
Toll-free: 1-877-599-6906
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