Why Positive Working Capital is Important to Your Business

Why Positive Working Capital is Important to Your Business

Two financial metrics define the health of your business. The first is cash flow, or how much money your company has on hand in a specific period. The second is working capital.

What Is Working Capital?

To calculate this metric, you add up all of your company’s assets, including:

  • Cash
  • Accounts receivables
  • Inventory
  • Prepaid expenses
  • Marketable securities
  • Investments
  • Other receivables

Then, you subtract the liabilities of:

  • Wages
  • Taxes
  • Notes payable
  • Accounts payable
  • Principal and interest payments due on loans
  • Deferred revenue
  • Accrued expenses

The remaining balance is your working capital. This number generally ebbs and flows with seasonal sales cycles and significant one-time expenses. Your company’s balance sheet shows this information in detail for any period you set.

Why Is Positive Working Capital Important?

Managing your working capital ensures your business has the financial resources to cover operating expenses and money to fund growth opportunities. It also shows your business should be able to survive through unexpected business challenges and qualify for a loan, if necessary. A positive balance allows you to create excess inventory before your busy season and hire temporary workers to manage the increased business.

A negative balance indicates your company may have problems paying creditors, suppliers, and employees. As a result, your business cannot grow because no funds are available, and taking on additional debt is not a realistic option.

How Can My Company Increase Working Capital?

Perhaps you have an unexpected drop in sales or a considerable expense coming up you want to cover with cash. There are steps you can take to increase this metric. First, you can add to your current assets by automating your payment monitoring and accounts receivable to increase your cash flow and lessen the need to use working capital for your business operations. Another way to raise additional cash is by selling your liquid assets. A third option is securing a long-term debt to increase your cash without adding too much to your liabilities.

In tandem with increasing your assets, decreasing your liabilities also increases your working capital. Here you can implement all possible methods to reduce your operating expenses. For example, analyze your inventory management plan to prevent product overstocking that could lead to discount pricing or write-offs. Another option is refinancing your short-term debts to a longer-term so the payoff isn’t due within a year. 

Taking steps to ensure your company has positive working capital is essential for the health of your business. 

Seek Expert Assistance

At My Commercial Capital, we can provide your business with the working capital you need to grow. Our commercial finance solutions are structured to provide maximum benefits to borrowers. Contact us today to learn more!

Why Equipment Financing Is One of the Best Options for Small Businesses

Why Equipment Financing Is One of the Best Options for Small Businesses

Just because a company is considered a small business, it doesn’t mean the need for equipment is small as well. Many small business owners have a considerable need for large and costly equipment, from excavators to diagnostic systems.

How can these companies obtain the needed machinery with their lower overall revenue? The benefits of equipment financing can be amazing in this situation.

A Financing Option with Simple Requirements

If your small business doesn’t have the greatest credit score or the largest annual revenue, you may assume that getting a loan for equipment is impossible. Nothing could be further from the truth, at least in the case of equipment financing.

With this type of loan, the equipment acts as collateral. This reduces the requirements for qualification significantly. You don’t need great credit, a huge bank account, or a large down payment. Many small businesses can qualify without any problems.

Financing That Is Friendly for Your Cash Flow

Having a healthy cash flow is a constant concern for many small businesses. You want to have plenty of working capital available to deal with monthly overhead and emergency needs. Fortunately, equipment financing is relatively easy on your bank account.

The fact that down payments for equipment loans can be small — sometimes they even have no down payments — means you don’t have to use up all of your savings to buy equipment. You can keep your capital for other needs.

Monthly payments are also designed to be comfortable with your cash flow. The objective is to make it easy for your business to have high-quality equipment as soon as possible.

Flexible Loans

Unlike traditional lenders, which often have strict requirements and payment schedules, alternative lenders that provide equipment financing are flexible. Generally speaking, this type of loan is created on a per-business basis. All of the terms, from your down payment and interest rates to monthly payments and repayment schedule, are customized to the needs of your company. This can be a huge help for small businesses that have seasonal operations, such as construction companies, landscaping businesses, plumbers, and many other small businesses.

Freedom to Do Things Your Way

Last but not least, equipment loans are great for small businesses because they let you make the decisions about your equipment needs, not lenders. Most types of equipment are compatible, which means that you can get a high-quality, state-of-the-art piece of equipment for your industry and use it how you want.

Seek Expert Assistance

At My Commercial Capital, we can provide your business with the working capital you need to grow. Our commercial finance solutions are structured to provide maximum benefits to borrowers. We treat our borrowers very well, which is how they know they can trust us with all of their financing needs.

What Services Does a Digital Marketing Agency Offer?

What Services Does a Digital Marketing Agency Offer?

Digital marketing is a broad term that refers to advertising online. It can include many different avenues for attracting potential customers. A digital marketing agency is a business that specializes in many of these techniques.

What Services Can You Get From a Digital Marketing Agency?

This type of agency is like a one-stop shop for all your online advertising needs. Here are some of the services offered:

  • Search Engine Optimization: This refers to helping your company’s web pages rank higher when people perform searches on Google. For example, if you sell tennis shoes, you want your site to appear when potential customers search online for men’s and women’s tennis shoes.
  • Email Marketing: This is a type of marketing that sends email messages to potential customers to encourage them to visit your website. People may sign up for emails from one of your landing pages, perhaps to receive a free white page or infographic. Contact forms also help you connect with people via email.
  • Social Media Marketing: Many Americans use social media every day. If your company has a social media account on Facebook, Twitter, Instagram, Pinterest, or another site, you can connect with customers that use those platforms. Social media marketing helps you do exactly that with professional posts and ads.
  • Content Marketing: High-quality content can help your company attract visitors who are looking for information. This type of marketing revolves around company blog articles. These articles can provide tips, guides, solutions, and answers to the questions your target audience has.
  • Local SEO: When most of your customers live in your company’s surrounding area, SEO needs to adapt. Local search services design your web pages and blogs in a way that your customers can find you quickly.
  • Paid Search Advertising: If you have a lot of competition online, paid search ads can be a great way to attract attention. You can customize the audience for your ads, making sure the right people see what you’re offering.

Many digital marketing agencies also offer website creation services. They can build a new website for your company or improve your existing website.

Why Turn To a Digital Marketing Agency?

In the past, business owners often needed to coordinate different types of ads themselves: contacting the phone book to place ads in the business section, hiring a graphic designer for print advertising, visiting the local printer for newspaper ads, and similar methods. With digital advertising, things are far easier. You can coordinate your company’s entire marketing strategy from one place.

Seek Expert Assistance

Some advertising companies try to impress you with a bunch of tech jargon and big words that don’t mean a thing. At My Commercial Capital, we prefer to let the results speak for themselves. Like other small businesses, our main concern is to make our clients happy. We work hard, give you high-quality content, and produce digital marketing that has a great effect on your company’s online reputation.

What Is a Personal Line of Credit and How Does It Compare to Business Credit?

What Is a Personal Line of Credit and How Does It Compare to Business Credit?

Many company owners are familiar with unsecured lines of credit for business, but a personal line of credit may be less well known. What are the pros and cons of personal credit lines? When would business owners decide to use one?

What Personal Lines of Credit Are

If you’ve used business credit before, you can imagine the same thing, except backed by personal assets rather than a business credit score. If this is your first time hearing about credit lines, you need a bit more explanation.

Imagine a financing option that works like a credit card but has the advantages of a personal loan. That’s essentially what a line of credit is for. It gives you access to a set amount of funds, but unlike a loan, you only need to pay interest on the money when you use it to make a purchase.

A line of credit has a credit limit or maximum amount you can draw from. It also has revolving funds, which means that as you pay back the money, you can use it again for different purchases.

How a Line of Credit Compares to a Credit Card

For average consumers, a credit card may be enough for making purchases. For business owners, though, the terms aren’t good enough to be viable. Lines of credit provide a larger credit cap that can cover bigger business needs, along with lower interest rates that don’t skyrocket as much when you have to carry a balance over for several months.

What kinds of businesses can benefit? Any company that needs access to flexible, fast working capital. The way you use the funds can vary significantly, from taking care of lease payments to covering payroll. House flippers often use personal lines of credit to remodel properties.

The Differences Between an Unsecured Line of Credit and a Personal Line of Credit

Unsecured lines of credit for businesses generally provide larger funding amounts and don’t require collateral. For personal credit, it’s usually necessary to use your home as collateral, which is why this option is also known as a home equity line of credit or HELOC financing.

HELOC options can be easier to qualify for if your business is new or your revenue is still small. To get this type of line of credit, you need to have good personal credit. You can also use the funds for personal needs, not just business needs, including medical expenses or ongoing education.

Seek Expert Assistance

Don’t wait to secure the necessary financing for your business. Instead, call a member of our team to schedule a time to meet so we can go over your needs and develop a loan solution that will help your business grow. We’ll conduct a no-obligation business consultation so you know what financing is right for you and how much to request. Contact My Commercial Capital today!

The Right Way to Use Small Business Loans with Limited Working Capital

The Right Way to Use Small Business Loans with Limited Working Capital

If your business has plenty of working capital available and a strong source of revenue, congratulations! Those conditions make managing your operations much easier. Realistically, though, many companies fall outside that working capital utopia.

Some small businesses have to find ways to continue growing while balancing a tight monthly budget. You can have success, you just need to use finesse when it comes to small business loans and financing options. Follow these tips for greater success.

Organize Your Expenses

The first step in having a practical budget is knowing exactly where your money is going. That means keeping track of all of your outgoing funds during a month. Some expenses are unavoidable, such as taxes, rent, payroll, and similar operating expenses.

A common slipup is forgetting to record smaller purchases, such as gas for your company fleet, shipping costs, and other bills. Don’t forget to look at the cost of paying overtime to employees as well.


Next, organize your expenses by the most important items first. It’s rough because your business needs things other than core needs to stay healthy and grow, but you have to protect your finances first. Marketing is essential, but you can often adjust the type of marketing you use to reduce your costs if needed.

Know Your Revenue Patterns Well

In some industries, revenue is hard to accurately predict, but there are usually at least some indications of what you can expect from clients. For example, construction businesses can’t entirely know how many projects they will have during the year or how lucrative they will be, but there are patterns in times of greater activity and lower activity.

Once you have a target revenue for each month, you’re better prepared to know how much financing you need to make up the difference. You can also decide what type of payments you can afford in terms of leasing or loans.

Use Small Business Loans

Wherever possible, a small business owner should prioritize SBA loans for financing. These loans take longer to get approved for, but their low-interest rates can save you a huge amount of money compared to other options. By planning, you can reach your goals and save money at the same time.

Protect Your Cash Flow

You may also need supplementary financing, such as invoice factoring, to keep your cash flow healthy. Don’t overdo it, though. Focus on helping with gaps in financing, not relying on these options to fund your business operations.

Seek Expert Assistance

At My Commercial Capital, we can provide your business with the working capital you need to grow. Our commercial finance solutions are structured to provide maximum benefits to borrowers. We treat our borrowers very well, which is how they know they can trust us with all of their financing needs.