Working capital loans

Working capital loans

What is a working capital loan and how can it help your company?

Companies often need additional working capital to bridge liquidity bottlenecks. Teylor’s working capital loan gives you better conditions than overdrafts, meaning you can avoid high overdraft fees and high interest rates.

A working capital loan is an ideal solution to cover your ongoing business costs such as buying goods or paying invoices. It can take a while before you get the money back by selling your products. In such cases, a working capital loan can serve as a bridge. This borrowed capital gives your company more financial leeway to pay expenses. You can continue your business smoothly and grow your company. We offer you customised solutions that are precisely tailored to your needs.

In addition to a working capital loan, the Teylor business loan or our factoring offers can also provide you with liquidity to invest in equipment, pay salaries or cover other operating expenses while you wait for your customers to pay your invoices. Our financing experts will work with you to find the best solution for your needs.

What advantages do Teylor’s working capital loans offer?

A working capital loan from Teylor offers numerous advantages when you need liquidity quickly. We offer a fast, straightforward and personalised loan application process. We specialise in small and medium-sized enterprises (SMEs) and offer unsecured working capital loans with fixed interest rates between EUR 50,000 and EUR 1.5+ million that we can pay out within 48 hours.

Our experienced team will provide you with a free quote and assist you personally throughout the process. Your account manager is available by phone, email or video chat and will support you with any questions you may have about your working capital loan. Thanks to our customised product, you can be sure that we will solve your liquidity problems fast and effectively.

What is a working capital loan and how can you use it to cover your operating expenses?

A working capital loan is a type of company loan to finance current assets and ongoing business operations. This enables you to pre-finance orders or projects and benefit from discounts to increase your turnover and profit.

Another advantage of the working capital loan is that you can use it to bridge liquidity bottlenecks if your revenues fluctuate. This way, your company can continue to cover all operating costs, even if turnover is temporarily weaker than expected.

In contrast to investment loans, working capital loans are mainly used to cover operating expenses, such as personnel costs, material and services, goods, rent or marketing expenses. The term of a working capital loan is usually only a few weeks or months.

Teylor is a digital lending platform that offers you unsecured working capital loans with fixed interest rates from EUR 50,000 to EUR 1.5 million and more. Thanks to state-of-the-art credit scoring and solid industry knowledge, our experienced experts can create a customised loan offer for your company - free of charge and the money will be in your account in just two working days.

We emphasise personal connections and your account manager is available to you by phone or email. With Teylor, you can apply for working capital loans fast and easy to secure your liquidity and your ongoing business operations.

When to consider a working capital loan?

Working capital loans are particularly popular with small and medium-sized companies to realise short or medium-term financing. However, they are less suitable for long-term and large-scale projects such as investments.

Typically, a working capital loan is used to bridge the time between the purchase of goods or raw materials and the sale of products or services. In challenging times such as the COVID-crisis or in seasonal businesses, a working capital loan can help to cover ongoing costs so businesses can focus on stabilising their revenues.

Companies in manufacturing, services and catering sectors in particular benefit from working capital loans. However, working capital loans generally have higher interest rates than other financing instruments. You should therefore ensure that the monetary benefit is higher than the borrowing costs. Discuss with our team, we will find the best solution for your company.

How to find the right working capital loan?

There are three different types of working capital loans:

• Overdraft facility: One form of working capital loan is the overdraft facility. Here, a financial institution allows you to overdraw your business account up to a certain limit. This offers flexibility and allows you to pay invoices even if your account balance stands at zero. However, the costs for overdraft facilities are comparatively high. Short-term loans or factoring are often better alternatives to secure short-term liquidity.
• Government-backed working capital loans: Development banks such as KfW offer programmes in which working capital loans are offered with government grants. These loans are especially suitable for startups as young businesses rarely get a loan form a traditional financial institution.
• Short-term business loans: As overdraft facilities are generally very expensive, short-term loans are usually a better option. You take out a loan for a few weeks or months to bridge your liquidity gaps. The costs are manageable and you can easily plan your liquidity.

How to find the best offer for a working capital loan?

Borrowing conditions for working capital loans can vary greatly from provider to provider. The terms typically range from one to twelve months or from twelve to 60 months and there are differences in fees, commissions and interest rates. The offer usually depends on factors such as your credit rating, the loan amount and available collateral.

An important tip: You can deduct the interest from your company’s tax bill as operating expenses.