Working Capital Financing

When engaging in working capital financing it is important to understand that each borrowers need is a unique situation.  Borrowers have unique requirements, and their receivables and inventory (raw materials and finished goods) may have characteristics that improve or detract from their desirability as collateral.  As such, it is important to explain the need for working capital financing, the working capital cycle, the quality of receivables and inventory, the anticipated peek and minimum usage on the line, and the current borrowing base.

Working capital finance arrangements provide added flexibility for businesses in managing the ongoing cash flow requirements of corporate operations. Simply put, working capital is defined as the amount of liquid assets available to the company. Liquid assets consist of cash or financial resources that can readily be converted into cash for a wide range of business needs; these assets differ from fixed assets, which typically cannot be converted into cash readily. Fixed assets include real property, construction equipment, office furnishings and a number of other items necessary to ongoing business operations. Companies have a number of options when funding working capital for operational use; some of the most common forms of working capital finances include inventory loans, installment loans, accounts receivable loans and lines of credit. Each of these types of working capital finance arrangements provides significant benefits for companies in managing cash flow requirements and ensuring that all company obligations are met in a timely way. Lines of credit can be especially valuable in this regard. These revolving credit arrangements allow business owners to use only the amount of credit required to deal with current concerns while leaving the remainder available for use at a later date. As the business makes payments on its line of credit, available credit increases until the debt has been entirely repaid and the original credit limit is once again available to the business.

CNF Exchange offers assistance for small businesses and larger companies in acquiring working capital lending arrangements. By providing a venue where companies can upload their funding requests for free, CNF Exchange allows small businesses to connect directly with lenders interested in financing working capital requirements and providing funding for ongoing business needs. CNF Exchange makes it easy to apply for the business loans companies need to compete and succeed in the modern commercial and industrial marketplace.