What is a Working Capital Loan

As a business owner, you need to ensure that your business has enough cash on hand to pay your suppliers and employees. Sometimes circumstances such as seasonal downturn or an unexpected expense may mean that you need access to additional funds. Often as businesses grow, additional inventory or staff will be needed. A working capital loan can be used to help you out with these challenges and more.

What is it for?

Depending on the type of business you have, an Open for Business loan can be used for a variety of purposes. Some of the most common uses can be when your business is growing. Do you need to purchase additional stock to meet demand? Or hire additional people? Another common use is for day-to-day expenses or to cover payroll. If your cashflow fluctuates, having access to cash on hand to cover ongoing expenses can be invaluable. Or perhaps you’ve had an unexpected bill come in – things like repairs or IRD payments often can’t wait until you have cash on hand. A working capital loan can help you stay on top of your finances.

Secured or unsecured?

At Open for Business, we offer unsecured loans up to $100,000 and partially secured up to $250,000. Which option is right for you will depend on your situation and the business. A secured loan will generally offer a lower rate of interest, but means that the lender will look to repossess your collateral if you default on the loan to recover their costs. An unsecured loan means that there is less risk to you, the borrower, as you do not have to provide any collateral. This can be great way to keep things like your personal home separate from your business finances.

Need it now?

Were you relying on that customer to pay their invoice this week? Not expecting that large repair bill on your equipment, the same week as payroll? Quick access to funds is important to keep your business operating, your suppliers happy and your employees paid. With our online application system, you can apply in minutes and get a decision in seconds. We know that as a business owner, our time is precious. That’s why we have a quick and simple application process, available online. No more branches or waiting in queues.

When do I have to pay it back?

We want to create a loan that works for you, therefore our repayment terms vary. However, our unsecured loans have a maximum term of 60 months available. To find out more and to work out the best repayment schedule for you, contact one of our team.

Final note

Still not sure if a working capital loan is right for you? Get in touch with the Heartland Bank team to find out whether an Open for Business Working Capital Loan could help smooth out your cash flow.

Lending criteria, fees and charges apply.

This article was originally written for Heartland Bank and published here.