Working capital: plain-English answers

Working capital is the money that keeps the doors open — payroll, inventory, rent. Here's how much you actually need, when to finance it, and which product fits which cash-flow shape.

What is working capital financing?

Short-term funding used to cover day-to-day operating expenses — payroll, inventory, rent — not long-term investments.

Working capital loan vs term loan: what's the difference?

Working capital is short (3–24 months) and covers operations. Term loans are longer and fund specific projects.

How much working capital does a small business actually need?

The standard rule: 3–6 months of operating expenses. Seasonal businesses need more; SaaS or subscription businesses often less.

What are the best working capital options?

LOC, MCA, invoice factoring, short-term loan — each fits a different cash-flow shape.

How do Amazon sellers fund inventory?

Amazon lending, payout advances, revenue-based funding, lines of credit and inventory financing compared, with a worked restock example.

How does trucking factoring work?

You sell delivered-load invoices for cash now. Advance, reserve, fees, recourse, and contract traps explained.

How to pick the right working capital option

Working capital covers the gap between paying your costs and getting paid. The right option depends on how long that gap lasts. Short, repeating gaps suit a line of credit. Waiting on invoices suits factoring. A one-off need with a clear payback suits a short-term loan.

Merchant cash advances are the easiest to get but usually the most expensive, so check the true cost first. Work out how much you actually need before applying; borrowing too much is one of the most common mistakes.

Through Outset Funding you need $10,000+ in monthly revenue and 6+ months in business. Rates, amounts and approval are set by the lender.