Fixed costs, floating sales
Rent, payroll, insurance and supplier bills are due on fixed dates. Sales are not. In Huntington Beach, sales follow summer visitors, weekends and weather, along with the foot traffic that shopping centers such as Bella Terra and Old World Village attract. Working capital is the money that fills the space between a fixed cost and a floating sale.
It is not only for businesses in trouble. A healthy business also needs working capital when it takes on a bigger order, stocks up ahead of summer or hires before the revenue arrives.
Three stories, three needs
- A shop owner must buy stock in spring for sales that arrive in summer. The need is inventory float.
- A contractor serving the industrial side of the city buys materials, pays a crew and waits on invoices. The need is payment-timing float.
- A restaurant owner faces a slow winter with the same rent as July. The need is a seasonal cushion.
Different needs point to different structures, which is why the application asks what the money is for.
Sizing the request
Take your weekly costs and multiply by the weeks you expect the gap to last. For illustration only, a Huntington Beach apparel shop with $7,000 a week in rent, payroll and insurance wants to cover ten slow weeks plus spring stock of $15,000: roughly $85,000. Compare that with the weakest months of deposits to make sure repayment is realistic. The figures are an example, not our terms.
If your request is far larger than the gap you can describe, something else is going on, and a different structure might fit better.
A simple monthly habit
Once a month, write down deposits, fixed costs and what is left. Add the dates of your next three large bills. If the cash on hand does not cover them without a good week of sales, you are a candidate for working capital before the problem shows up, rather than after. It is easier to plan funding in a calm month than in a crisis, and owners who do it tend to ask for a more sensible amount.
Applying
We fund $25,000 to $5,000,000, with funding in as little as 24 hours after approval. FICO 500+ is considered, about three months of business bank statements are needed and no tax returns are required. The five-minute application uses a soft credit pull; sole proprietors can apply. Apply to start.
For comparison, see a line of credit, merchant cash advance or revenue-based financing. For area context, see Orange County.