Glossary
The money a business uses to cover day-to-day costs between paying and getting paid.
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The money a business uses to cover day-to-day costs between paying and getting paid.
It is current assets minus current liabilities. In practice it is the cushion that keeps payroll and suppliers paid.
It is the most common reason businesses seek funding.
$80,000 of current assets and $50,000 of current liabilities is $30,000 of working capital.
Growth often consumes working capital before it adds profit.
Reviewers estimate working capital by looking at the gap between deposits and the main outflows: payroll, rent, suppliers. A business with healthy profit but a 45-day collection cycle shows a persistent gap that a funder reads as a financing need rather than a performance problem.
Positive working capital on paper does not always mean cash in hand. A large receivable balance may not convert quickly.
Not always. Timing matters as much as the total.
See the related guides and the comparison pages, or apply and ask.
No. It is educational information, and agreements vary.
Educational information only. It is not legal, tax or accounting advice.
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