Working Capital Loan

Category: finance

A short-term loan used to finance a business’s everyday operational expenses rather than long-term investments.

Working capital loans bridge cash flow gaps, such as paying payroll during seasonal drops or purchasing inventory before peak sales periods. They are typically structured as short-term term loans or revolving lines of credit tied to accounts receivable cycles.

Common Examples

• Our roofing company client secured a working capital loan in March to hire crews and stock materials before the spring storm season hit.
• Using a high-interest working capital loan to purchase permanent long-term machinery is a critical structural error in capital allocation.