How to Secure a Fast Working Capital Loan in 7 Steps

A fast working capital loan can be a life-saver when it comes to meeting your urgent needs – it provides quick access to funds to cover your day-to-day operations and ensures that your business stays in operation without disruptions.

But what are some of the steps that you will need to take if you are looking to secure a fast working capital loan? In this comprehensive guide, National Business Capital will take you through the whole process step by step. So, let’s get right into it:

What Are the Use Cases for a Fast Working Capital Loan?

Working capital loans are a great short-term solution if you need cash to cover your operational expenses in periods of lower business activity. Here are some of the most common use cases:

• Seasonal Fluctuations – If your business often experiences seasonal highs and lows, a working capital loan can provide you with the quick funds you need to cover expenses during off-peak periods.
• Delayed Payments – If you are waiting on delayed payments from clients, a fast working capital loan can bridge the gap and ensure that you are able to meet your obligations.
• Equipment Repairs – No matter how well you maintain it, equipment can suddenly break down, disrupting your operations. If you don’t have the cash to make urgent repairs, this type of financing can come in handy.
• Emergency Situations – Unexpected events, such as theft, natural disasters, or health crises, like that created by the COVID pandemic, can also create urgent financial needs that require immediate funding.
• Bulk Discounts – Purchasing in bulk can lead to reduced costs for your business, but it requires upfront capital which you may not have. A fast working capital loan can provide the necessary funds you need to make large inventory purchases.
• Seasonal Stocking – If you are running a seasonal business, such as a Halloween or a Christmas decorations shop, you will often find that preparing for it can strain your cash flow. Quick access to working capital can help you prepare.
• Business Expansion – Another great use of a fast working capital loan is seizing opportunities to expand your business. For example, this could be opening a new location or launching a new product line. 
• Operational Expenses – The most common use of a working capital loan are operational expenses, including payroll, rent, and utilities, as well as other overhead needs which run regardless of revenue fluctuations.
• Marketing Campaigns – A working capital loan can provide you with the funds you need to launch a new Marketing campaign to boost sales or brand awareness. Quick financing can support these efforts without disrupting other operations.

7 Steps to Secure a Working Capital Loan

So, what are some of the key steps you’ll need to take if you are looking to secure a fast working capital loan? Let’s take a look:

1. Calculate the Loan Amount

The first step you’ll need to take in order to secure a working capital loan is to prepare your application. This includes two key components – determining your needs, including the amount and purpose of the loan, and collecting your financial documents.

To determine how much capital you are going to need, consider the purpose of the loan. For example, if you are taking out a working capital loan for inventory purchases, you should make an estimation of the amount of products you are going to buy, and whether your supplier is providing you with any discounts.

On the other hand, if you are looking for financing to cover payroll, make sure to determine the payroll period (a month, quarter, year), calculate all payroll components (including salary, bonuses, overtime, etc.), and add a 10-20% buffer on top of that. 

Scenario

Let’s say you are a small manufacturing business looking for a fast working capital loan to cover payroll for 3 months. Your costs for that period may include:

• Salaries and wages – $50,000
• Benefits – $10,000
• Payroll taxes – $5,000

In that case, the total monthly payroll cost would be $65,000 per month, or $195,000 in total for the 3 months. If you add a contingency of 10%, that would bring the total payroll cost to $214,500. 

This approach ensures you have enough funds to meet your payroll obligations and handle any unexpected variations in expenses.

2. Gather Your Financial Documents

In order to secure a fast working capital loan, the next step that you will need to take is to gather your financial documents. They are necessary for the application of any business loan, regardless of the type or the lender.

Here is a list of the most important ones:

• Bank Statements (6-12 months)
• Tax Returns (2-3 years)
• Profit and Loss Statement (Income Statement)
• Balance Sheet
• Cash Flow Statement
• Accounts Receivable
• Payable Aging Reports
• Business Licenses and Permits
• Detailed Business Plan
• Articles of Incorporation
• Business Agreements

The exact documents may vary by lender, so make sure to double-check with the financial institution that you are applying with. 

3. Check Your Credit Score

The next step to secure a fast working capital loan is to check your credit score. While lenders will check the score for you during the application process, we recommend that you also do it yourself so you can get a better understanding of your creditworthiness.

Your credit score will determine your eligibility for a loan – a higher score means a higher likelihood for approval and more favorable terms, while a lower score can mean rejection or less favorable terms and rates. 

In addition, checking your credit score will help you identify inaccuracies or issues that may negatively impact your application process. This gives you the chance to address the issues before applying so you can improve your chances.

You can check your credit score with one of the major credit card bureaus, including:

• Experian
• Equifax
• TransUnion

You can request a credit report from each of the three bureaus once a year.

4. Research Lenders

One of the most important steps in securing a fast working capital loan is to research lenders. 

This step is key because not all financial institutions can actually provide you with quick access to funds – in fact, traditional lenders such as banks may take weeks and even months to review your application and deliver the funds you need.

However, other institutions – such as Specialty Finance Group National Business Capital – can get your application reviewed and approved within days, and you can see the funds in your account as fast as 24 hours! 

We are also a diverse lender platform that gives you access to dozens of offers so you don’t have to spend hours of your time doing research to find what fits your needs best.

5. Choose The Right Loan Type

In order to secure a fast working capital loan, you will also have to choose the right loan type that adjusts to your needs and goals in the best way possible. The most common types of working capital loans include:

• Business Line of Credit – A financing option that allows you to draw funds up to a certain limit, pay, and re-draw again as needed.
• Term Loans – With a business term loan, you can get a lump sum of money for any business purpose, on flexible repayment terms.
• Accounts Receivable Financing – With accounts receivable financing, you can transform delayed customer invoices into liquidity. 
• Revenue-Based Financing – Another type of working capital loan is revenue-based financing, which allows you to leverage your business’ cash flow.

6. Complete The Application

Now that you have done your research and prepared accordingly, it’s time to complete the application process. The exact steps will vary by financial institution, so keep that in mind before applying. 

National Business Capital offers a fast and streamlined application process online – you can apply securely within minutes, upload your documents with zero risk, and get dozens of offers to select from to your convenience. 

We can move your status for a fast working capital loan from application to funding in just 24 hours!

7. Review And Accept an Offer

If you’ve been approved for a fast working capital loan, the last step will be to review and accept the offer. Take the time to thoroughly review the details, including the repayment terms, interest rates, and whether the loan amount meets your needs.

Depending on the lender, you may even have room for negotiation when it comes to getting more favorable terms and rates.

Qualifying for a Working Capital Loan With NBC

If you want to qualify for a working capital loan, look no further than National Business Capital. With $2+ billion financed since 2007, multiple awards, and an experienced team of Business Finance Advisors, we have everything you need to find the best financing options for your project.

Are you ready to get started? Apply here.