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What is Working Capital for a Business? (Video)

What is Working Capital for a Business? (Video)

Video Transcription:

Hey guys this is Sean Mory with LenCred again. Here to answer your questions. Just so everyone knows, my position here at LenCred if you do not know from my other videos, I am a Senior Financial Advisor. Today we have a question from Julia out of California.

Julia’s question specifically is what is working capital for a business?

Wonderful question Julia, I am happy to answer it.

First thing is I love this question because a lot of people ask me this and it is vary important to know first and foremost working capital is going to be different then financing for a company.

Working capital is going to be for things like Marketing, Advertising, Payroll, anything that can be used for credit as opposed to using your cash. Cash is king! But really, my principle is cash is only good for RUST. (R) Rent. U (Utilities). S (Salary).T (Taxes).

Outside of that use credit every time. Working capital is meant for short-term usage. That is why it is important to know the difference in the products that you borrow through.

Jeep’s are not meant to go on the drag strip. Ferrari’s are not meant to be taken off road.

So make sure you borrow the product correctly and with the intention to make sure it is going to be the most value to you. So Julia I hope that helps answer your question. Otherwise guys please give us a call at 1.888.783.1503 or visit us at www.lencred.com.

This is Sean Mory signing off.


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