Operations
Payroll and operating costs
Covering wages, rent and other regular expenses while revenue from work already completed is still on its way in.
Working capital financing.
Keep your business moving when the timing of expenses and incoming payments doesn't line up. Explore working capital options for everyday operating needs and short-term cash-flow pressures.
Quick Answer
What is working capital financing?
Working capital financing is a broad term for business funding used to support day-to-day operations. Businesses may seek it for payroll, suppliers, inventory-related expenses or temporary gaps between paying bills and collecting revenue. The actual funding structure, pricing and repayment schedule depend on the financing agreement; not every working capital offer is a traditional loan.
Common Uses
Common reasons businesses seek working capital
Suppliers
Supplier and stock payments
Paying suppliers or buying stock when the bill is due before the goods or materials have turned into sales.
Timing
Gaps between bills and collections
Bridging the period between paying for the work and collecting from customers who pay on longer terms.
Before You Apply
Cash-flow timing and repayment capacity
Working capital needs often arise when a business has sales or work underway but must pay expenses before the corresponding revenue arrives. Understanding when cash comes in, when obligations are due and how much room exists for repayment is an important first step.
Financing structures differ in how funds are provided, how costs are calculated and when repayment is required. The right comparison is not simply how much capital is available, but whether the overall financing cost and repayment obligations are manageable alongside the business's existing expenses.
Repayment capacity is one of several things a lender weighs. Our guide to business financing eligibility explains the others, including operating history, credit and existing debt.
How BGC reviews the need
Every business has a different reason for seeking working capital. Some need to cover operating expenses while awaiting customer payments. Others need purchasing capacity to support larger orders or seasonal demand.
BGC starts by understanding the financing need, the business's operating circumstances and the expected source of repayment. We then help identify and compare potentially suitable financing options through our funding partners. Each partner makes its own underwriting and approval decisions.
- We learn your business
- We find the right fit
- We help you compare financing options
- We guide you through the process
Total Cost
Questions to ask about total cost and repayment
Before accepting an offer, ask the funding partner to set out the full cost and repayment terms in writing. Useful questions include:
- What is the total amount I will repay, including all fees?
- How often are payments made, and is the amount fixed or variable?
- Are there origination, administration or other upfront fees?
- Is collateral or a personal guarantee required?
- What happens if I repay early, or if a payment is missed?
- What type of financing agreement am I entering into, and how are the total cost and repayment obligations calculated?
Related Options
Other financing options to compare
Business line of credit. A line of credit provides access to a set limit that, depending on the agreement, can be drawn, repaid and drawn again. It can suit recurring timing gaps better than a single lump sum.
Business term loans. A term loan provides a defined amount that is repaid over an agreed period. It can suit a specific, planned investment where the repayment fits projected cash flow.
Inventory financing. Inventory financing is tied to buying or carrying stock. If most of the pressure comes from purchasing inventory ahead of sales, it may be worth comparing.
FAQ
Working capital financing questions
What can working capital financing cover?
It is generally used for day-to-day business costs such as payroll, rent, supplier payments, inventory-related expenses and short-term gaps before customer payments arrive. Each funding partner decides which uses it will accept, and some agreements restrict how the funds can be used.
How is working capital financing different from a line of credit?
Working capital financing describes funding for operating needs in general. A business line of credit is one specific structure: a credit limit that can be drawn, repaid and potentially drawn again. Other working capital structures provide a single amount with a set repayment schedule.
What affects the cost?
Cost depends on the funding partner, the structure, the amount, the repayment period, any fees and the partner's assessment of the business. A quoted rate may not show the full cost, so compare the total amount repayable and every fee before accepting an offer.
Is collateral always needed?
Not always. Some structures are secured by business assets, and some may require a personal guarantee. Requirements depend on the funding partner and the agreement, so confirm them before you sign.
Can financing support seasonal cash-flow gaps?
It can, if the repayment schedule fits the seasonal pattern. A business that earns most of its revenue in a few months should check that payments falling due in slower months are manageable. Whether financing is available, and on what terms, depends on the funding partner's review.
Ready to talk?
Let us learn about your business and show you what is possible.