Two different problems with the same symptom
Both a startup burning through cash and a profitable small company waiting on invoices can look the same on a bank statement: the balance is falling. But they are different problems. In the first, spending exceeds revenue by design, and the plan depends on a future raise or breakeven. In the second, the business earns money but the money arrives later than the bills.
This matters because the tools do not swap. Equity and other investor-funded routes are built for the first problem. Short-term working capital is built for the second.
The setting
Wikipedia describes Silicon Valley as the high-tech hub of the San Francisco Bay Area, home to the headquarters of more than 30 businesses in the Fortune 1000 and thousands of startup companies, and says the Bay Area accounts for one-third of venture capital investment in the United States. It also says that as of 2023 the tech ecosystem had become more geographically dispersed. For a founder in or near that world, outside investment is a familiar path, and runway is a familiar word.
But plenty of businesses in the region are not the kind that raise investor money: agencies, consultancies, service firms, hardware and parts suppliers, restaurants feeding the offices, and contractors. They have customers and revenue, and their cash problems are the ordinary ones.
A comparison you can use
| Question | Runway problem | Working-capital problem |
|---|---|---|
| Does revenue cover costs over a typical quarter? | No | Yes, with timing gaps |
| What closes the gap? | A raise or reaching breakeven | A short-term bridge repaid from revenue |
| What does the funder study? | The plan and the team | Bank statements and deposits |
| What is the risk if the plan slips? | You run out of months | You carry a repayment against revenue |
Counting runway honestly
For illustration only: a company with $240,000 in the bank and net monthly burn of $30,000 has eight months of runway. If burn rises to $40,000 because of a hire, it has six. Founders often update the plan and forget to update the calculation. Run the numbers monthly and decide in advance what level of runway triggers a decision, rather than discovering it at two months.
If, on the other hand, a business is breaking even or better but is short because of timing, a runway number is the wrong lens. A receivables list and a calendar of due dates tell you more.
Where working capital fits and where it does not
Working capital fits when revenue exists and a specific need, such as inventory, a hire tied to a signed contract or equipment, will return its cost through sales. It does not fit as a way to stretch a runway for a business whose model has not yet shown it can earn. A repayment tied to revenue adds pressure to a business that is not yet generating enough. Be honest about which category you are in.
We look at about three months of business bank statements, with no tax returns required, a soft credit pull and a FICO of 500 or above considered. Sole proprietors can apply.
The application takes about five minutes. You will need roughly three months of business bank statements; no tax returns are required, the credit check is a soft pull, and a FICO of 500 or above is considered. Funding runs from $25,000 to $5,000,000 and can arrive in as little as 24 hours once everything is in. Start at the application page.