What are some examples of working capital?

Working capital is a term used to describe cash or other liquid assets held by a company to meet its short-term obligations. This money is typically used to pay for raw materials, supplies, and services needed to run the day-to-day operations of a business.

The working capital loan helps businesses stay afloat during slow periods, such as seasonal fluctuations. For example, if a business has a large inventory of goods in storage, it may need to raise additional funds to cover those costs until demand picks up.

If a business runs out of cash, it would likely go bankrupt. In order to ensure that they don't face financial trouble, companies often look into ways to increase their cash reserves.

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