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What is Working Capital?

Working Capital

In simple terms, working capital is cash available for a business to run. Working Capital is essential for any business to pay liabilities and trading operations on a day to day basis. It is the funds that allows a business to function by providing cash to keep operations smooth which is also known as operating liquidity. SME’s can suffer from a lack of working capital, and this is due to long payment terms, Clear Funding are a fantastic solution to this problem. Working Capital can also commonly be known as, Working Capital Finance, Current Ratio and Cash Flow.

Why is working capital important?

We are aware that Working Capital is a crucial measurement to every business as it is an indication to see how companies cope efficiently to cover daily costs and operations. A shortage of working capital could lead to a number of serious glitches and will certainly cause alarm bells to ring – this is due to outgoing expenditure that cannot be met. Whereas positive working capital indicates that a company pays off its liabilities almost immediately.

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Clear Funding is a trading name of Clear Funding Ltd (registration number 09474073) and Clear Funding Financial Services Ltd (registration number 09998904), which are incorporated in England & Wales with their registered offices at 4 Bentinck St, Marylebone, London W1U 2EF

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