Working Capital

Most small businesses will need help with working capital at various points in time. However, it’s difficult for many small businesses to qualify for working capital loans at traditional financial institutions. And, if a business does qualify, the funds are often needed more quickly than the application process allows.

In short, it is hard to find reliable quick funding options for working capital.  Excelsior Growth Fund (EGF) is available to help businesses acquire working capital, quickly.

What is working capital?

Working capital is a term that refers to a measure of business capability and short term financial health.  Working capital is calculated as a ratio by taking a business’ current assets and subtracting current liabilities or debts.

The calculation is a good indicator of how much an establishment has in liquid assets.  These assets are necessary to fund a business’s day to day financial needs and also invest in future growth.  A company with a positive working capital ratio is considered to be in good shape with cash flow that handles expenses. 

What is a good working capital ratio?

In ratio terms, if a company has a working capital ratio or 1.2 to 2.0 it is considered to have positive working capital and is in good shape. If working capital is above 2.0 it indicates that a business is not investing excess assets.  Failure to invest excess assets may simply be an oversight of the business owner, but failing to invest excess assets also shows lending agencies that the business owner isn’t investing in their companies’ future growth.

Companies that have a ratio of less than 1.0 are considered to have negative working capital.  Negative working capital can happen for many reasons such as bad investments, or unforeseen calamities that have an effect on a businesses’ ability to create income.  In this circumstance, help is needed to change the negative score to a more stable positive.

The Excelsior Growth Fund (EGF) SmartLoan™, affiliated SBA 7(a) and SBA Community Advantage loan programs are available for small businesses that might need some extra working capital.  The loan process is quick and much less confusing than many other loan applications.  

EGF is here to meet your small business’ working capital needs.


For more information about other uses for our loans, explore our alternative options.

Refinance your business debt purchase equipment and technology expand and improve your location