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3 Steps You Can Take to Understand Your Working Capital Needs

Working capital. We’ve all heard this term, but what does it really mean? To put it simply, working capital is a company’s liquid assets that fund its day-to-day operations. Business owners should use working capital as a metric to understand their company’s financial health.

To calculate your current working capital, just follow this 3-step process:

1. Calculate your current expenses, debts, liabilities.

This could include rent, power and water, accounts payable, payroll, payments to vendors, supplies/materials… the list goes on. It is important to be thorough when calculating your liabilities — you are the only one who fully understands your company’s outstanding and regular expenses.

2. Calculate your assets.

This could include your checking account, savings account, mutual funds, stocks, inventory, accounts receivable, paid-off assets and equipment, etc.

3. Subtract your liabilities from your assets to get your working capital.

Let’s say you have $500,000 in assets and $475,000 in liabilities. That means your working capital is $25,000.

When completing this 3-step process, many business owners realize that they are at, near, or below $0. This means that their liabilities are greater than their assets, and they have little to no working capital.

Having quick access to working capital is important for all businesses – it can help you cover regular business needs, purchase assets, expand your market share, and have wiggle room for unexpected emergencies. We’re finding that having working capital is especially important right now, as many business owners wait for their PPP applications to be accepted.

According to our recent survey, 94% of small business owners indicate that it is very important to have emergency funds for their business, yet only 35% are able to handle a major unexpected expense at the moment. This is where we come in.

Elevate Funding is a direct funder that specializes in Merchant Cash Advances (MCAs). An MCA is not a loan – it’s simply a way to get access to your future sales [liquid] immediately. The MCA application process is simple and quick, and we are able to fund companies in as little as 24 hours. Plus, there are no restrictions on how you use the funds.

More perks? We do NOT check credit (for our standard MCA product), we do NOT charge outrageous fees, and we do NOT require collateral.

When you select us as your funding provider, you are placing a safe bet on your financial future. We want to see you succeed, and we will do everything in our power to work with you on your specific needs.

If you need funding and wish to speak to someone now, please call us at 888-382-3945 or click here to send us an inquiry. One of our teammates will get back to you as soon as they are available.


Revenue-Based Finance is formerly and alternatively known as Merchant Cash Advance, or MCA.