A working capital loan is a type of loan that businesses can use to cover day-to-day expenses. This type of loan is typically unsecured, which means that the lender doesn’t require the business to put up any assets as collateral. Working capital loans can be used for a variety of purposes, including
• cover the costs of inventory
• pay for marketing and advertising expenses
• cover the cost of employee salaries
• cover the cost of rent or utilities
• cover the cost of research and development expenses.
Working capital loans can be a great way for businesses to access the funds they need to keep their operations running smoothly. However, it’s important to remember that these loans typically come with high-interest rates, so businesses should only borrow what they absolutely need.
The Working Capital Loan in Action: ABC Company
ABC Company recently opened a new store and is experiencing a surge in sales. However, the company’s current working capital is not sufficient to cover the increased costs associated with the new store. ABC Company applies for and receives a working capital loan from its local bank. With the extra funds from the working capital loan, ABC Company is able to purchase more inventory, hire additional employees, and cover the cost of rent and other operational expenses. Thanks to the working capital loan, ABC Company is able to keep its new store open and running smoothly.
Pros and Cons of Working Capital Loans
• The pros of working capital loans are that they can help businesses keep their cash flow positive during tough times, they can help businesses secure needed inventory or supplies, and they can help businesses meet payroll and other expenses.
• The cons of working capital loans are that they can be expensive, they can put a business into debt, and they can limit a business’s ability to take on new debt in the future.
Here at WHW Capital, we’ve got the experts on finance and business to help you with any related endeavor – from working capital loans to real estate. Give us a call at any time and reach out via webform.
Buying into a franchise has several advantages. For example, you won’t have to build your business model from scratch. However, it can still be costly, and you may need to obtain financing. Just as with building your own business from the ground up, there are many loan options that can help you get your franchise off the ground.
Things to Consider When Choosing Franchise Funding
Before you get started on your journey as a franchisee, you must consider some of the costs associated with this- above and beyond the standard costs associated with starting a business. In most cases, you’ll need thousands of dollars for each step and if you don’t already have the cash on hand, you’ll need to secure funding of some sort.
Here are a few of the costs associated with opening a franchise:
• Legal fees for an attorney to review the franchise agreement before you sign
• Real estate/build-out costs for your location
• Franchise fees, ranging between $20,000 to $50,000
• Additional costs, such as inventory, day-to-day operations, and supplies
When you are choosing franchise funding, you must make sure that it will be enough to cover at least a portion, if not all, of these costs. There are some lenders that put restrictions on what the funds can be used for, so check their rules before applying.
Just like with other types of loans, you must consider several things before starting the application process. When it comes to franchise funding, figure out how much you need, what the interest rate is, and how long the repayment terms are. These factors can help you determine your minimum monthly payment and how long you will be making those payments.
Some of the other things to consider are collateral requirements, how detailed the application process is, and how long it will take to receive funds once approved.
Options for Franchise Funding
When you decide that you’re interested in buying into a franchise, you should start to research some of your franchise funding options. While you may end up taking out a loan, there are some other ways to get the funding you need, including:
• Franchisor financing
• Friends & family loans
• Commercial bank loans
• SBA loans
• Alternative lending options
Steps for Getting Approved for Franchise Funding
Now that you know the various types of franchise funding that are available, you’re probably wondering how you can apply and be approved. Ultimately, all funding and lenders are different and will have different requirements for approval. Therefore, you’ll need to ask each lender for their specifics. However, there are a few general requirements to get you started.
• Have a business plan
• Work on your credit score
• Be prepared with a down payment
• Have collateral ready to pledge
If you are considering opening a franchise, you will need funding to get you started. There are several options for franchise funding. You must take the time to research your options and determine which is right for you. If you need help, contact WHW Capital. We can explain your options and help you get started with the application process.
When you’re running a business, your most important goal should be wanting to generate leads in order to boost your sales. This can be harder than it sounds, however, when you take into account all of the different tactics other companies are using to try and persuade consumer traffic to their website. If you want to stand out and look like a pro in the lead generation game, here are some creative, proven methods for boosting your marketing strategy and receiving the best results.
Minimize the Available Options
For a customer visiting your website, it can be much easier to simply see one call-to-action and follow it, as opposed to seeing a variety of choices for how to proceed and inevitably getting confused enough to not take action on any of them at all. This is what makes offering fewer choices so successful. Simplify the route you want your customer to take on your brand website, and present a clear path with which to make your sale. Adding in excess variables only hinders your ability to acquire your customers’ purchases, so why make it difficult when it doesn’t have to be?
Offer Explainer Videos for Transparency
Trying to sell your product or service to a new consumer relies on being straightforward with your approach. If your potential customer reaches your website, peruses your content, and he or she is still confused by what you’re selling, then you’re less likely to gain the customer’s business. Be as direct and informative as possible with your content for greater lead generation. Offer a clear and transparent explainer video for your brand that’s easily understandable and easily shareable to others across social media. This not only creates less confusion and wariness with your potential consumers, but it also shows that your brand is willing to be upfront and accessible to their needs without any insincere, sales gimmicks.
Clarify Your Brand’s Message Through Your About Page
New customers are looking to understand what your business sells, who you are, and why you’re selling what you’re offering them. In order to maintain the same goal for transparency, improving the state of your company’s “About” page can go a long way in expressing your mission, defining your values and principles as a brand, and enticing consumers to trust in what you’re selling to them.
Lead generation doesn’t have to be a tricky prospect. It simply requires reconsidering your marketing strategy and learning how to advertise your brand with methods like these that are both simple and effective at attracting incoming consumers. Contact WHW Capital to learn more about generating leads through digital marketing.
A bridge loan is used to cover gaps in financing. These gaps are typically due to timing issues. As a business owner, you know that timing is critical when it comes to business financing.
If you do decide to get a bridge loan, you would be getting short-term funding that will mature once your long-term financing comes in. this gives you access to funds to start your project while you’re waiting on permanent financing. Once the permanent financing comes in, you use the proceeds to pay off the bridge loan.
In this blog, we’ll explain what you need to know about bridge loans to determine if it is a good funding option for your business.
What is a Bridge Loan?
A bridge loan is also known as a swing loan, bridge financing, or bridging loan. It is a short-term option until long-term financing comes in.
Terms and application processes vary depending on the borrower and the lender. For example, if you are a developer in residential real estate, you may plan to apply for a construction loan but need financing to pay for the land. This is where a bridge loan comes in. You would work with a lender that specializes in bridge loans for land.
Some lenders offer bridge loans for startups that need cash while waiting on their next round of funding.
In both of these circumstances, the lenders will have specific terms and requirements for their applications. As a general rule, these loans have a higher interest rate, shorter terms, and strict collateral requirements.
The process is similar to that of a traditional loan and you’ll be expected to provide the following:
• Credit score
• Past business experience
• Proof of down payment
• Financial capacity
Finally, the way you repay a bridge loan depends on what you are using it for. In most cases, there is a balloon payment at the end of the term. That being said, if you are using it for a real estate transaction, it is often structured so that you can use the proceeds of the sale to pay it off.
When Does a Bridge Loan Work Best?
Bridge loans are potentially a good option when you need funding to get started on a project while waiting on permanent financing. There are two circumstances where bridge loans are a great fit:
• Real estate purchases
• Startups between funding milestones
No formula will show you whether a bridge loan is the best option to fund your business. Just like any other type of funding, there are advantages and disadvantages.
Even if it seems like the numbers line up, bridge loans are not necessarily the best option for your business. Typically, it’s expensive and since it’s only a short-term solution, there is little to no room for error.
The pressure of a bridge loan is due can cause some business owners to be too cautious. However, it’s important to note that bridge loans can be used to overcome cash flow issues. So, if you do have long-term financing coming in or a large sale pending that you can use the proceeds to pay off the loan, it might be worth it.
If you’re interested in business funding, contact WHW Capital. We can help you understand your options and get you moving in the right direction.
If you need more resources to grow a new business, you may consider a line of credit from a bank or financial institution. Applying is easy- though it does require you to have your financial ducks in a row, that is, have documentation and information to provide to lenders.
Grow your new business with a line of credit! Here’s how:
Many lenders are allowing prospective borrowers to apply online for loans or lines of credit. This removes the added stress of a face-to-face with the bank. Be ready and willing to provide the lender with a thorough view of your business and how you operate when asking for funding.
Some documents that most lenders will want to see include, but are not exclusive to, these:
• Personal and business tax returns
• Financial statements from your business checking account
• Business registration documents
• Credit approval
• Annual revenues
• Business plan
If you are just starting, it is even more important to provide thorough financial information to potential lenders when asking for a line of credit. You want the lender to see and feel confident that you will responsibly make your payments on time.
If new businesses are concerned about their application for a line of credit being weak, there may be an option to put up some collateral on the loan. This secures the line of credit, making lenders more willing to work with new or underqualified applicants. When you consider collateral, don’t only think of big-ticket items, like your car or house, but you may be able to use invoice financing on your accounts receivables to secure the funding you need.
Talk to various lenders about a line of credit to find the one that best meets your expectations and needs. To learn more, talk to the professionals at WHW Capital today about growing your business with a line of credit.