Working capital: when the business needs breathing room

What is it for?

Payroll, inventory before a busy season, a slow month, or a big order you don't want to turn down. It's unsecured, short-term financing, from 6 to 36 months.

Its biggest advantage is speed: once approved, funds can arrive in 24 to 48 hours.

What does it take?

Under Lexington's general guidelines: at least 6 months in business, at least $100,000 a year in sales and your last 4 months of business bank statements. There's no minimum credit score, so it's also an option when your personal credit isn't at its best.

When does it make sense?

When the money will earn more than it costs, or when it prevents a bigger problem, like losing a key employee or a big customer. Before you sign, look at the total cost and the payment schedule, and make sure your sales can carry them.

The truth: fast money is usually the most expensive money. That's why it's for short-term needs, not for covering a problem that comes back every month.

The truth: if you need it every month, the problem isn't money, it's cash flow. Kevin will help you see whether another option, like a line of credit, fits better.

See the requirements for Working capital · All guides

These are Lexington Capital's general guidelines and can change. This guide is education, not an offer of credit.