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Does an Alternative Working Capital Product Make Sense For My Business?

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April 25, 2022

Whether you are a well-established business or a startup, having access to a working capital product is imperative to the health of your company. An alternative working capital product can be a superior option to a traditional business loan for funding your business.

What is alternative working capital?

An alternative working capital product is a unique funding solution that differs from a conventional business loan. Traditional funding can help a business manage a multitude of operational costs, expansions or larger purchases. Alternative working capital can do all that and more. At their core, alternative working capital solutions offer flexible funding to fit the needs of the business. You can turn to the creative solutions of alternative business funding when there’s no time to wait for application approvals, when credit history isn't strong, or when you simply don't have time for a lengthy analysis of assets and liabilities. 

Working capital for startups and small businesses

Businesses of all sizes and tenures can experience a fluctuation of cash flow at one time or another, but this is especially true for small and startup businesses. Small businesses that use alternative working capital depend on it for speed and flexibility. Alternative working capital offers the fast cash you need to jump ahead of customer and credit card payment cycles, liquidate accounts receivables, fund purchase orders, or upgrade outdated equipment. It is flexible funding that allows you to cover a sudden shortfall or quickly pivot when your needs change.

What to consider when you are evaluating working capital solutions for your business

Decide how much you need to borrow and for how long.

How much can you afford to repay each month? Or put another way, what percentage of your future sales would you be willing to sell in order to have cash on hand today? Review your company's balance sheet and liquidity position and evaluate your current assets, liabilities, and liquidity ratio.

Do your research.

Compare banks, credit unions, and online lenders based on funding options, pricing, repayment terms, and fees. Read customer reviews to get a sense of each company's reputation.

Pull together your documents.

Depending on the type of business funding company you want to work with, you might need 12 months of bank statements and tax returns for the past two years. You may also need a detailed business plan if you're a startup. Keep in mind, traditional lenders often ask for a great deal of documentation while online working capital providers, like Good Funding, simply request a short application and recent bank statements.

What are working capital funding requirements?

The types of working capital solutions offered by alternative lenders and business funding companies tend to be more flexible than the business loans of traditional banks. As such, online funding companies will have different requirements than a bank or credit union. For example, while banks place a heavy emphasis on personal credit score, Good Funding focuses on recent revenue and many other factors to determine eligibility. Our product is not one-size-fits-all, which is great news for business owners who have less-than-perfect credit or simply need working capital as fast as possible.

How do I get working capital?

Good Funding offers funding solutions up to $500,000 with a simple application process. Our funding specialists will discuss your unique business objectives to help find the best solution to meet your needs. You can begin your application process here.

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Ready to move your business foward?

Start your application today, and you could get funding in as little as one business day!
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