Costs first, income later
Working capital is the day-to-day cash a business needs while it waits to be paid: payroll, fuel, rent, insurance, supplier invoices. When the money going out arrives before the money coming in, there is a gap. The gap does not mean the business is weak. A profitable carrier can be short for a few weeks while a large shipper pays on its own schedule.
Stockton's payment chain
Wikipedia describes a city that grew as a logistics and commercial hub on the San Joaquin River, supported by irrigation, railroad connections and the Port of Stockton from 1933, and that has diversified from agriculture into manufacturing and telecommunications. Money moves through a chain of subcontractors in a place like that:
- A carrier pays drivers and fuel weekly and is paid by the shipper in 30 to 45 days.
- A warehouse subcontractor pays labor and equipment rental before billing the larger operator.
- An ag-service business pays for parts and crews before harvest invoices clear.
- A trade contractor buys materials before a progress payment arrives.
Sizing your gap, for illustration
For illustration only: a Stockton hauler with $24,000 of weekly costs gets a new account invoiced at $75,000 net 45. By the time the first payment arrives, six and a half weeks of costs have gone out. Add what leaves each week, subtract what reliably arrives, and the lowest point of the running total is the gap to cover. Round numbers, not our terms.
Working capital next to the alternatives
| Situation | Consider |
|---|---|
| One lasting purchase | Equipment financing or a term loan |
| Swings in revenue by season or contract | Revenue-based financing |
| Advance payments already crowd the account | MCA relief |
Habits that keep a gap from growing
- Invoice the day work is done, not at month end.
- Ask large customers for partial payment up front on long jobs.
- Track your lowest balance each week, not only the ending one.
- Keep business and personal spending in separate accounts so statements are easy to read.
These do not replace funding when a gap is real, but they keep it from being larger than it has to be and make the file cleaner to review.
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 with a soft credit pull; sole proprietors can apply. See San Joaquin County business funding, or apply here and say what the money will cover.