The shortest explanation
Working capital is money to keep the business running while you wait for money owed to you. It pays wages, suppliers, rent and insurance. It is meant to be repaid out of the receivable or sale it is bridging.
Long Beach and the wait for payment
The Port of Long Beach, in Wikipedia's words, is the second busiest container port in the United States and among the world's largest shipping ports. Around a port there are many businesses that sell to other businesses: repair, packaging, staffing, printing, catering, security, cleaning, office supplies. They do not sell for cash. They invoice, and invoices run 30, 45 or 60 days.
Meanwhile the city of 466,742 supports its own consumer economy: restaurants and shops on and near the waterfront, services around California State University, Long Beach. Those owners are not waiting on invoices, but they are waiting on seasons.
Two examples, for illustration only
The invoice gap
A janitorial company invoices $40,000 on net-45 terms and pays $12,000 in wages and $3,000 in supplies each month. The first invoice has not paid by the second payroll. Working capital of about $15,000 closes the gap and is repaid when the invoice clears.
The seasonal ramp
A waterfront restaurant needs $20,000 for extra staff and inventory ahead of a busy stretch. Working capital pays for the buildup and the busy weeks repay it. Example numbers, not our terms.
How much to ask for
Size the request to the gap, not to the invoice. Add up the costs that fall before the money comes in: wages, materials, rent and anything else due in the window. Subtract the cash you already have that is not needed elsewhere. The remainder, with a small cushion, is the figure to discuss. Requesting too little leaves you short again in three weeks; requesting far too much means paying for money that sits idle.
What we ask for
Requests run from $25,000 to $5,000,000. We ask for about three months of business bank statements and a 5-minute application. FICO 500 and above is considered, tax returns are not required, and the credit pull is soft. Funding can arrive in as little as 24 hours after approval. Sole proprietors can apply. We do not publish rates or terms on this page; compare any offer in writing.
Check before you apply
- Is the problem timing, or is the business losing money? Working capital fixes timing.
- Will the receivable you are bridging actually pay within the expected window?
- If it is a recurring gap, would a line of credit be cheaper than repeat funding?
New to business? See startup business loans. Struggling with daily withdrawals? Read MCA relief. See also the Long Beach overview and apply here.