The Surprising Way That Debt Can Work in Your Favor

Working Capital Loans - 5 Min Read

“Debt” is a term that often conjures up emotionally charged associations with dependency and even failure. These associations are rooted in the unique role debt has played in history and religion.

Unfortunately, understanding debt from a purely negative point of view can cripple the ability of a business to grow and expand. That’s why it’s so important for rational decision-makers to take a more accurate view of debt. When the time is right, taking out a loan to support the expansion of your business can lead to a massive advantage over your more debt shy competitors. Leveraging someone else’s capital to grow your business is very different than taking on debt to buy a “toy” or a luxury that will never add to your net worth. 

Don’t Fear Debt – Use It as a Tool

Take a minute to clear away any fears or anxieties you may have about debt. Now look around at most successful businesses in the United States. One thing they have in common is that they have all learned how to strategically use debt to their advantage. As your business looks toward major opportunities on the horizon, it may be your turn to do the same.

After all, what is debt? In short, it’s an agreement in which a lender supplies a borrower with capital according to a set of terms that assigns certain responsibilities to both parties.

The borrower is responsible for paying back the lender the principal amount borrowed plus an agreed fee for the use of their money. The lender trusts that the borrower will invest the capital wisely, and the borrower pays for the lender’s trust and patience in the form of a fee.

This is obvioulsy an arrangement that serves both parties well. Debt is simply a bond of mutual benefit and obligation between two rational actors. If your business needs working capital to grow, it would be shortsighted not to investigate whether you can obtain capital from a reputable lending institution like Mulligan Funding.

Business Loans Provide Working Capital to Growing Businesses

Every business owner knows that if you don’t have enough cash on hand, you will hit a wall sooner or later. Whether you want to acquire new clients, hire new staff, invest in marketing, or strike great bargains with suppliers, you need working capital to move forward.

Working capital loans work very different than bank loans. For example, a working capital loan can be approved within hours if your business meets certain basic requirements, and there are no restrictions on the use of your funds when you receive the loan.

Successful business owners use working capital loans to seize on current opportunities and to position their business for future growth. Working capital loans can help you generate increased cash flow, save money on operating costs, and use leverage to expand the potential return on your investments.

Smart Strategies for Making the Most of Working Capital Loans

One of the beneficial features of a working capital loan is that you have total flexibility when it comes to how to use the money. This makes it even more important to strategically allocate the newly available capital to the right place at the right time.

Here are some proven approaches for using a working capital loan to maximum effectiveness:

  • One of the easiest ways to profit from a working capital loan is to take advantage of bulk pricing or a special sale offered by suppliers. If you receive a major discount on inventory by buying in larger amounts, than a working capital loan would allow you to take advantage of that savings opportunity.
  • If your business needs more physical space to thrive, or you want to remodel to provide a better customer experience, a working capital loan is a perfect way to fund your growth that will pay off big time over the long term.
  • If you want to attract new customers, refresh your brand, or increase your presence in specific marketplaces, you can use a working capital loan to launch a marketing campaign targeted to your expansion goals.
  • Upgrade or repair equipment: if your business relies on special equipment to succeed, it’s in your best interest to ensure that you keep it in good shape and upgrade when the time is right. A working capital loan allows you to make repairs and upgrades before a crisis occurs.
  • A working capital loan can smooth out transitions and provide a bridge to the next opportunity. If your business is seasonal or faces unforeseeable dangers like natural disasters or an IRS audit, access to working capital can help you solve problems on the fly.
  • Just as difficult problems can emerge from nowhere, so can unforeseen opportunities for growth. If you encounter an individual who would make a great addition to your team or receive a sudden offer to buy out your competitor, a working capital loan can ensure you have the cash on hand to avoid letting a game changing opportunity pass you by.

A Headache-Free Loan Approval Process

Maybe you’re thinking that a business loan sounds good, but the process of getting the loan will be time-consuming and onerous. If you’re not looking forward to spending an entire day signing documents only to be rejected months later, you’re not alone.

While traditional banks often make small business owners jump through hoops to qualify for their programs, alternative financial institutions like Mulligan Funding offer a much more straightforward process. First, consider whether you meet the following facts of a working capital loan:

  • You need to be in business for at least 12 months
  • Annual business revenue of at least $150,000 
  • Simple one page loan application
  • Loan approval and funding typically within 24-48 hours

Working with Mulligan Funding will give you access working capital much faster than you might expect.

In addition, you will have options when it comes to picking the length of the payback term on your loan. The majority of our loans have repayment terms that range from six to eighteen months, so the payments are managable but the debt is retired quickly.

And remember, unlike a bank loan, there are no restrictions on the use of your working capital loan funds. This type of debt gives you the flexibility you need to take advantage of opportunities in the marketplace as they come up. It’s a great option for businesses that may have been turned down by traditional banks in the past or don’t have the time to wait for a lengthy approval process.

Call Mulligan Funding at 855-326-3564 to discuss your financing options today!

The information shared is intended to be used for informational purposes only and you should independently research and verify.

Note: Prior to January 23, 2020, Mulligan Funding operated solely as a direct lender, originating all of its own loans and Merchant Cash Advance contracts. From that date onwards, the majority of funding offered by Mulligan Funding will be by Loans originated by FinWise Bank, a Utah-chartered Bank, pursuant to a Loan Program conducted jointly by Mulligan Funding and FinWise Bank.