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6 Places to Find Working Capital

Starting a business or keeping a small business running can be taxing. Often the most difficult part is ensuring you have capital left in the bank to keep employees paid, supplies purchased and orders flowing. If you’re just getting started, finding the working capital to get going is critical to becoming a successful business.

Working capital, the money in the bank to operate the business, is often the single most critical part of your business. Without cash or credit to purchase raw materials, it doesn’t matter how big the latest order was or how creative your new marketing campaign is. You won’t be able to execute it.

In order to grow your business, you need to have a solid plan in place to harness working capital. To help, we’ve put together a list of six types of capital that are available to help you get started or finance your working capital needs right away.

Business Credit Cards

Business credit cards are often the most accessible form of financing to get for a small business, especially if they’re based off of your existing credit with a bank. While they’re not the best long-term solution to finance your working capital needs, they can be used effectively early on, for small items or if you have short term emergencies.

SBA 7(a) Loans

SBA 7a loans are some of the most common Small Business Administration loans, specifically built to help small businesses that otherwise wouldn’t have enough credit to get a loan. The government helps guarantee some of the loan, lowering the risk for lenders, which makes it easier for qualified businesses to get a loan.

Factoring or Reverse Factoring

If you’ve already made sales, you can do a traditional accounts receivables factoring arrangement where you sell your A/R at a discount in exchange for a cash today. Sites like ReceivablesExchange make it easy to get started immediately and help make the process as painless as possible. However, you’ll want to be very careful since factoring can get addictive. As soon as you start moving your cashflow forward, it can be very difficult to stop without creating a large working capital gap.

Personal Consumer Loans

Often to get a company started, you can simply take out a personal business loan. While it may not be the safest route to starting your company, if the other options are unavailable and you have good credit, it could be the option you need to get started.

Peer to Peer Loans

Over the last few years, sites like LendingClub and Prosper have popped up as alternatives to bank lending. Rather than getting a loan from a banking institution, you receive a loan from groups of individuals at competitive rates. While the rates aren’t always better than a bank, you can often get loans with worse credit than possible with a bank.


When all else fails, pre-sell your idea through something like Kickstarter. A number of companies got their start through Kickstarter, like Pebble and Jellyfish Art. Backers pre-purchase different levels of your product because they are interested in your product, then if you cross a threshold that you pre-define, you create the product using the working capital that was raised.

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