Financing Everyday Business: The Working Capital Loan & You

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March 24, 2015 at 8:01 pm  •  Posted in Construction, Product Highlight  •  2 Comments

Sometimes, in business and life, we find ourselves a little short on cash. In tough times, money doesn’t exactly grow on trees. (Unless you’re Donald Trump.)

Whether you need funds to expand business, secure additional inventory, or to carry your business through a seasonal lull, the banks don’t exactly part with their cash easily. And without a healthy cash flow, business could screech to a grinding halt.

What’s a Working Capital Loan?   

This type of loan—typically approved in just a few days—is an unsecured debt that doesn’t require the collateral needed to lock down a bank loan.

Because of this set-up, your likelihood of securing capital is much higher. If you can’t land a bank operating loan, or if you don’t have time to wait for the bank’s approval, a working capital loan could be a good option for your business.

What’s a Working Capital Loan Used For?

In short: anything you want, as long as it’s for your business. There are no restrictions on how you use the funds in your business. (We don’t recommend buying a boat with the cash, but that’s your call.) From payroll to taxes, working capital loans fund the short-term necessities of business.

Here are a few scenarios where a working capital loan could come in handy:

1. Winning More Business

When you’re bidding for a new project—like a government job or construction on a large commercial building—the last thing you need is for budget limitations to derail your proposal. Because your typical jobs aren’t as big, you might not have the capital outright to successfully bid on, and win, a job of this size.

To win customers’ confidence, you need to be ready to fund materials and labor upfront. (Because your customer can’t exactly bankroll you.) If you can’t cough up the cash to get the job done, you could lose out. This is a situation where a working capital loan could come in handy.

2. Boosting Cash Flow

In many industries, especially construction, business is cyclical. When work’s coming in steadily, you clear payroll and overhead with money to spare. But employees may be left twiddling their thumbs when work slows down. And without a steady flow of projects, payroll funds could dry up. If you’re overdrawn when payday rolls around, employees may jump ship in search of greener pastures. Between projects, a working capital loan can help you secure the funds needed to retain talent and keep your business moving.

Obtaining a Working Capital Loan  

To address common cash flow challenges, Graybar provides financial solutions for communications and data, energy-efficiency, and security projects. Graybar Financial Services can help you provide your business with a working capital loan ranging from $5,000 to $250,000.

Here are some of the benefits:

  • Approval ratio of 75% to 80%
  • No hidden fees or long-term commitment
  • Flexible terms ranging from 6-24 months
  • Cash received in as few as five days
  • Flexibility for additional capital
  • No restrictions on how you use the loan for your business

To learn more about Graybar Financial, call 1.800.241.7408, email us, or fill out a credit application here. 

Over To You 

Join the conversation by leaving a comment below, or connecting with us on Twitter @GraybarESP or on Facebook.

 

dawnAbout The Author
Dawn Woods, Manager, Graybar Financial Services

With over 17 years of experience in the financial services industry, Dawn helps Graybar customers secure the funds needed to drive business growth. Hailing from St. Louis, Missouri, Dawn has a solid understanding of business and finance, with a bachelor’s degree in business administration from St. Louis University and an MBA from the University of Missouri.

2 Comments

  1. Jerry D. Hill, CFO / April 14, 2015 at 1:11 pm / Reply

    After 30 years of going from job to job as they came in on their own from word of mouth, we have stepped up to now soliciting jobs using several lead sources, like BlueBook. We have at this time a project in Allen (200,000), 12 Condo’s in FT. Worth (99,000) each, Chicken Express (120,000, in addition to a bunch where we are in negotiations with the contractor. All of this could fall through, and we could wind up with only a part. Even so we are on tract to climb from 178,000 in sales last year to a million dollars this year. We need some growth capital and an experienced consultant to guide us into and through this first year of growth.

    Is this an interesting situation for your group?

    • Jackie Parsons / April 15, 2015 at 3:07 pm / Reply

      Hi Jerry – Thank you for the comment. We will be reaching out to you via email. Thank you!

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