A calendar, not a concept
Working capital is easiest to understand as a calendar. Payroll leaves every week or two. Rent leaves on the first. Suppliers want payment in 30 days, sometimes sooner. Customers pay in 30, 45 or 60 days, sometimes later. Any week where the money leaving lands before the money arriving is a gap, and working capital is the cash that carries the business across it. It is not a project fund and it is not a sign of a weak business.
Where the gaps show up in the Valley
Wikipedia describes Santa Clarita as a city of 228,673 people (2020 census) with business parks and industrial centers, among them the Valencia Industrial Center, Saugus Station, Needham Ranch and Vista Canyon, and as home to companies including Princess Cruises, Honda Performance Development, Precision Dynamics and HASA. Firms like that buy from, and hire, a long tail of smaller businesses.
- A machine shop pays for metal and overtime this week and gets paid when the buyer's accounts-payable cycle completes.
- A contractor or installer carries labor and materials for a project before the draw comes in.
- A staffing or services firm meets weekly payroll long before the client's monthly invoice pays.
- A retail or food business pays for stock ahead of busy weekends and holidays.
Sizing the gap, for illustration
For illustration only: a contractor with $18,000 of weekly payroll and materials wins a job that pays $90,000 net 45. Over the six and a half weeks to collect, it will spend more than the full job's price on labor and materials for everything it is doing at once. The point is not that the work is unprofitable; it is that profit arrives after the cost. Add up what leaves each week, subtract what reliably arrives, and the lowest point of that running total is the gap to cover. These are round example numbers, not our terms.
Working capital versus the alternatives
| Situation | Consider |
|---|---|
| One lasting purchase | Equipment financing or a term loan |
| Draw as needed, repeatedly | Business line of credit |
| Deposits swing widely month to month | Revenue-based financing |
| Advance payments already crowd the account | MCA relief |
Getting started
We fund $25,000 to $5,000,000, with funding in as little as 24 hours once approved. We consider FICO 500 and above, ask for about three months of business bank statements, and do not require tax returns. The application takes about five minutes and uses a soft credit pull; sole proprietors can apply. Regional overview: Los Angeles County business funding. Apply here and say what the money will cover and when you expect to collect.