A working capital loan is used to meet a company's short-term financial needs, such as payroll payments, short-term operations, bill payments, and trade credit. Bank overdrafts or lines of credit, short-term secured loans, and trade credit are all examples of working capital loans available on the market. A working capital loan is intended to supplement temporary working capital constraints with outside financing. Working capital loans can be used for many items, like tactical positioning of the business.
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