Importance of Working Capital To A Business

Working capital is crucial to the survival of any business, be it big or small. It is the amount that is left over when you subtract the liabilities you have from your assets. The greater this amount, the more successful and stronger is your business.

Working capital is used to expand the business and increase its growth potential. Working capital can be used to manufacture new products or to add to the products of a retailer. It could also be used to purchase machinery and inventory.

The company hires more personnel using this money or uses it for employee training. It can also be used to meet unexpected expenses. Thus the working capital of a company is used to run the daily operations of a business organization.

If the working capital corpus is low, or there are expansion plans, companies borrow money from lenders such as Mantis Funding to ensure they can stay on the growth path.

Looking To Quick Cash Advances from Financial Lenders

The working capital of a company covers costs such as the rent for the premises, the payroll, and any repayment of debts, payment of taxes, and all other overhead costs. This is why it is so important to maintain sufficient working capital in any company.

If this corpus dips too much, it could result in bankruptcy with your company closing down. It could also lead to an inability to attract investment in your company by other investors.

It could stifle the growth of your business and also result in increased cost of inventory as suppliers will be unwilling to give trade discounts to those who do not pay on time. That is why finance managers quickly look for lenders such as Mantis Funding who responds to financing requests with minimum delay. They also provide flexible repayment opportunities giving the business an opportunity to stabilize itself.

Business Funds versus Cash Advances

Mantis funding cash advance is different from business funds obtained from traditional banks as the future sales of the business are offered as collateral for the cash advance. This merchant cash advance is given on the basis of future revenue.

In banks, the entire amount is handed over to the business owner and the interest rate applies as long as the fund is pending. The cost & term rates vary depending on the duration of the term.

In cash advances, however, the cost & term rate is agreed upon at the very beginning and the borrower is expected to work towards paying off the entire amount. The greater the sales for the day, the greater will be your payment. There is no fixed payment that has to be made on a monthly basis and this flexibility ensures less stress on the business owners when business is slow.

Easy Tracking Of Cash Advance Repayment

Merchant cash advances by Mantis Funding is easy to track as payments are made by customers using a card machine. The lender and the payments provider work in unison to ensure the percentage agreed upon reaches the lender during each transaction.

The lender is also able to keep track of the total sales for the month. The merchant is able to factor in his costs including the repayment costs right from the beginning.

Each payment brings down the total debt amount, which can be quite comforting. There is also no money to be put aside as the percentage due to the lender goes out with each transaction. Cash advances are usually taken when the working capital dips and there is no other avenue of credit.

The cost and term rates can be rather high which is a deterrent but the lack of the need for collaterals makes this way of cash generation rather attractive.

3 thoughts on “Importance of Working Capital To A Business”

  1. A wow experience! Mantis funding, an exceptional fund providing company offers merchant cash in advance when you are in need. I could achieve my dream just because of the efforts that this company made. They supported my business with financial assistance and provided quick capital solutions.

  2. I was facing a slow season last year, and the fact that cash was hard to come by and I was running out of stocks as well created a bit of pressure on me to find a trustworthy funder for a short period. Mantis Funding is the funder I was looking for. They had the best and hassle-free registration service which I loved, seeing the fact of how hard the other funders make in order to get funds. Moreover, they not only made sure I was well equipped with funds but also never pressured me to pay them back before the deadline I signed with them. They helped me in growing my firm in a slow season. So, for me, they deserve a five-star rating!

  3. After my experience with Mantis Capital, I have restructured my business cash flow. I now keep my cash to manage on-going expenses and use small doses of cash advances to invest in expansion plans. A piece of equipment, marketing campaign, store remodeling, etc. have all been paid for by cash advances. I now no longer invest big chunks of my cash in these things but instead strategically plan and get funding for growth. Trust me, this is a more logical – and stress-free – way of managing a business!

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