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working capital Blog Posts

By First American Merchant

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Working Capital Can Help You Pay for Small Business Inventory

You can use working capital to restock your inventory, purchase new goods to sell in your business, or fill future orders. You, as a business owner, must never fail to keep up with your customer demands so to fight the competition in your industry. For this, you should closely monitor your small business inventory to guarantee only the best for your customers. 27% of businesses surveyed by the National Small Business Association (NSBA) reported that they weren’t able to receive the funding they needed. To get merchant funding without difficulty and at low rates, consider turning to First American Merchant, […]

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4 Key Differences Between Working Capital and Fixed Capital

Fixed and working capital differ when it comes to their usage in a business. One serves the long-term requirements of the business, while the other serves short-term requirements. To efficiently manage your business’ cash flow and overall financial health, it’s critical that you understand the difference between the two. Consider the following four, key differences between fixed and working capital. Meaning Fixed capital refers to the investment made in the long-term assets of a business. This capital is part of the business’ total capital that is not used for production. Rather, it is kept in the business for more than […]

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5 Truths about Working Capital and Small Businesses You Need to Know

Working capital is the lifeblood of every business, big or small. However, it isn’t always easy to know where to find it – or is it? Consider the following five truths about working capital. You might be pleasantly surprised to discover how simple it can be to find and secure working capital for your small business. Banks are not your only – or even best – solution Banks are rarely an effective solution for small businesses in need of financing. In reality, banks are routinely reducing the lines of credit they are willing to extend to small businesses. Even if […]

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Working Capital Solutions: 4 Financing Options for Small Businesses

The need for extra working capital often hits you when you least expect it. Unfortunately, securing funds is not always easy for the small business. Traditional lenders involve long wait times for funding and seemingly endless documentation requirements. If your business type or industry is categorized as “high-risk”, the bank might refuse to work with you before you even get started. Thankfully, there are more alternative financing options than ever before. The option you choose should cater to your specific needs; such as, your business’ unique situation, how much capital you need and how quickly you need it. If you […]

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The 3 Keys to Working Capital Optimization

Working capital management is often misunderstood. It is not a task that takes place once, or even once in a while. It needs to be a continuous process that is closely managed to maintain the financial health of your company. What is working capital? Your business’ working capital is the funds it has immediately available to cover day-to-day business expenses. Assessing the state of working capital can be done by pulling out your business’ balance sheet. Working capital is also used by investors to assess your business’ financial health and liquidity (how easily assets can be sold to generate cash […]

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Working Capital is Important To Business

What is working capital? And why should it matter to your business? Working capital is the funds your business has available to cover day-to-day expenses. Without it, your business could quickly find itself in a dangerous cash-flow situation. Or, worse case scenario, facing bankruptcy. It’s also important to keep an eye on working capital because it’s what investors consider when assessing your business’ financial health and liquidity; that is, how easily your business’ assets can be sold to generate cash on hand. Working capital can be found through the following, simple formula: Working capital = current assets – current liabilities […]

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Is It Difficult to Get an ACH Loan?

One of the more innovative products available in the alternative lending marketplace is an ACH loan (sometimes called an ACH advance or cash flow loan). ACH loans are a broad category of business loans that are specific in the way in which they are paid back. When you apply for an ACH loan, a prospective lender (like First American Merchant) will review your business’s checking account statements, typically going back several months. Why would they do this? Simply to get a sense of your average daily closing balance, which helps them determine how much of a loan to offer you, […]

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Why You Should Consider Working Capital to Finance Your Business

In the bustle of starting and running their small business, many entrepreneurs make the mistake of not planning ahead. Others are so wrapped up in day-to-day operations that they overlook the importance of cash-flow management. Still others are unsure where to find the working capital they need. What is Working Capital? Working capital is the capital a business uses in its day-to-day operations, and is calculated as the business’ current assets minus current liabilities. Its both a measure of the business’ efficiency and its financial health. The state of a business’ working capital determines whether it has enough short-term assets […]

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Three Ways Your Business Can Benefit From The Off-Season

Regardless of whether or not your business is seasonal, there comes a time in the year when sales are lower than normal. For brick-and-mortar retail stores, this period is typically the summer, when a significant number of customers is out vacationing out of town. On the other hand, hotel owners feel the cold more than the rest of us during the winter. If the health of your business is more or less tied to seasonality, then you probably already spend a portion of the year weighing your options for the off-season. With proper planning, time management, and financial oversight, the […]

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What You Should Know About a Working Capital Loan

A working capital loan can be defined as a type of loan that aims to finance your company’s everyday operations. It’s not meant for purchasing long-term assets or investments. A working capital is designed for covering accounts payable, wages, and more. Working Capital Loans Usually, a working capital loan is the right option for those businesses that feature cyclical sales or have high seasonality. A working capital loan can be of great help during periods with reduced business activity. You should consider applying for a working capital loan if you need financing to cover your company’s short-term operational costs. It […]

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