Commercial Finance Education
Working capital financing is funding used to cover a business's short-term operational needs—payroll, inventory, rent, utilities, and other day-to-day expenses. It bridges the gap between when expenses are due and when revenue is collected.
Every business needs cash to operate. Revenue does not always arrive when bills are due. Working capital financing helps businesses cover payroll, inventory, rent, and other operational expenses during those gaps.
Working capital is the difference between current assets (cash, receivables, inventory) and current liabilities (payables, short-term debt). When that difference is negative or tight, businesses may seek financing to maintain operations. Unlike equipment or real estate financing, working capital funding is typically used for liquidity—not for purchasing a specific asset.
Brokers, vendors, and advisors often encounter clients who need working capital but were declined by a bank or primary lender. Those declined deals may be eligible for second look review through a referral partner network. No approval is promised; each deal is evaluated on its merits.
Working capital financing can take several forms depending on lender, structure, and borrower profile:
Seasonal businesses—retailers, landscapers, contractors—often face cash flow gaps when revenue is low. Manufacturers may need funds to purchase raw materials before fulfilling orders. Service companies may need to cover payroll before client payments arrive. Any business with uneven cash flow or growth that outpaces collections may consider working capital financing.
Eligibility varies by lender. Factors include revenue, credit profile, time in business, industry, and deal structure. Deals declined by one source may be evaluated differently elsewhere. Brokers and advisors with a signed referral agreement can send declined business loans for review.
Seasonal retailer. A retail business needs inventory financing before the holiday season. Revenue is strong in Q4 but weak in Q2. A short-term working capital facility may bridge the gap until sales ramp up.
Contractor between projects. A contractor has won a large project but must pay subcontractors and materials before receiving progress payments. Working capital financing may cover the interim period.
Manufacturer scaling up. A manufacturer has orders but needs to purchase raw materials and hire staff before fulfilling them. Working capital may fund the ramp-up until receivables are collected.
Declined by bank. A business owner applied for a bank line of credit and was declined. The CPA or broker refers the deal to a referral partner network for second look. Alternative structures may create options depending on the profile.
Brokers use referral networks when working capital deals fall outside their primary lender box. Vendors refer customers who need operating funds. CPAs and consultants refer clients who were declined elsewhere. The common thread: a need for a different evaluation than the first lender provided.
Second look is not a guarantee. It is an additional path to explore. Send declined business loans and hard-to-place working capital deals through the referral process. Review the referral agreement before submitting. See declined deals for more context on how these situations are handled.
Submit borrower and request details by email.
We evaluate the opportunity and identify possible funding paths based on multiple factors.
Partners stay informed throughout the process.
When a deal closes, partners may receive 35% revenue share per the agreement.
FAQ
Working capital financing is funding used to cover a business's short-term operational needs—payroll, inventory, rent, utilities, and other day-to-day expenses. It bridges gaps between when expenses are due and when revenue is collected.
Working capital financing is typically unsecured or lightly secured and used for operational cash flow. Equipment and real estate financing are secured by specific assets and used for purchases. Working capital addresses liquidity; asset financing addresses acquisition.
Seasonal businesses, contractors, retailers, manufacturers, and service companies often use working capital financing. Any business with uneven cash flow or growth that outpaces collections may consider it. Eligibility depends on revenue, credit, and structure.
Yes. Brokers, vendors, CPAs, and advisors with a signed referral agreement can submit declined working capital deals for second look review. The financing partner evaluates the opportunity; no approval is guaranteed.
Revenue, cash flow, credit profile, time in business, industry, and deal structure affect options. Different lenders have different criteria. Deals declined by one source may be evaluated differently elsewhere depending on these factors.
Referral partners can submit declined deals through the referral partner process. Review the referral agreement first, then send deal details. See send declined business loans and declined deals for more information.
Have a declined working capital deal?
Review the referral agreement, sign it, and submit opportunities for evaluation.
