Posted by admin in Glossary
A working capital loan is a financing arrangement with an organization to pay for its day-to-day operations such as paying vendors and employee wages. Working capital loans can take one of several forms such as simple overdraft protection (where running a checking account balance below zero results in a loan) to formal loans secured by plant assets or accounts receivable. A common type of working capital loan is factoring. This allows an organization to leverage its accounts receivables without interrupting the day-to-day operations of the firm.
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